It may be something that a creditor would factor in when deciding to accept a full and final settlement. A larger regular income [rather than bonuses, overtime or commission] would lead to an uplift in payments at the review time so it may be better for creditors to let the IVA run its course.
Any additional monthly payments such as overtime etc are not guaranteed and less likely to influence a decision on a full and fianl offer unless they are regular and substantial.
Hi - if this is a hypothetical pay rise then the 10% 50:50 rule may not apply and you may just have to increase your contributions anyway. The settlement would therefore increase accordingly as you would be basing it on your higher payments remaining.
Annual increases are dealt with at the annual review. A new I&E is done allowing for the increased costs of living and if your surplus is still larger, then the IVA payments are increased going forward by 50% of the additional surplus.
In reality this means that most pay rises are ignored and only promotions would be taken into account. However you are allowed to retain half of the extra money so there is an incentive to improve yourself.
Hi, apologies for jumping in here - I had a significant pay increase in May and my IVA payments were increased accordingly as I contacted my IVA company directly. Should I have waited until my annual review for this to be done? My IVA is being reviewed again now and the payments have jumped yet again since my May submission.
You have an obligation to notify your IP of any changes in circumstances and you cannot refuse any reasonable request. However the IVA is also a contract and if it is covered by the usual conditions then in my opinion you should not have had an uplift in May because of a payrise.
However, doing an early review and agreeing to an uplift also increases the threshold for the 10% 50/50 rule which can work in your favour. Your payments can only increase by half the additional surplus yet the threshold is the full amount of the income. We will do some reviews early with our clients when they receive payrises if there is no negative impact on them.
I cannot see how your payments have gone up again as the review in May would have been a total review. Unless your salary has shot up again this seems odd.
Many thanks Michael. No my salary now is the same as in May. The May review was a voluntary one - I informed my IP. This is the annual review.
Every time I question it, I get told "we just put the figures in and it tells us what you pay". This doesn't cover the fact that they are doing two full reviews in 1 year though. How do I word it so that they understand what I am trying to say?
It is not really good enough to try and blame a computer. If there was a review in May and there have been no changes to the I&E since then the payments must remain the same. To say any different means that the previous review was done incorrectly or whoever is dealing with the case does not understand what they are doing. Either way not very good.
When you alerted your IP to the changes in April they should have discussed whether to deal with the money by way of a full review or under the 10% 50/50 rule and it seems they went for the full review. To now try and amend the figures again based on exactly the same salary in April is bizarre.
Tell them you want to speak to the IP and get them to explain how a surplus income can change from May to October when the salary did not increase!
