www.iva.co.uk

Morning all

Looking for some advise re my IVA. I had to extend for 6 months due to a debt that was not included in the original IVA. August would of been my final payment. I work in sales and earn good a pay packet in certain months. My question involves the wind fall over £500.00 clause. My question is suppose I earn £10k in 2 months. that is say £12k after tax my IVA payments stand at still needing to pay
£9086 over the remaining 11 months. My understanding is I make the 2x payments of £826 as normal bringing the amount down to £7434. Then my limit on monthly earnings which including the £500 threshold which is £3200 so I multiply these figures by 2 = £6400 then half of remaining £5600 goes straight in to the IVA £2800. This does not effect any remaining payments however if I get to November I will in effect have the money available to make the final 3 payments thus completing 3 months early. If however I saved up due to earning just below the £500 threshold over the next 6 months that too would give me £3k at total of £5.8k available in August. Thus leaving me enough left to pay for the total payments. I would of met the set out rules and have enough to make a final settlement. However I could put this to one side and just let payments go through or should my creditors allow the completion to move forward early?[^]

Hi there. Slight problem in the way I am reading this ..... the money you are talking about doesn't fall within the definition of a windfall, but is actually exceptional earnings. So, unfortunately there is no £500 disregard.

However, you are correct in that any of the 50% you are allowed to retain can be saved and used to offer a F&F settlement. Having said that, it would take a few months to sort and so isn't really a viable option to knock just a few months off the term. Plus it would add to the fees as the variation meeting would need to be paid for.

Hi - your salary isn't a windfall and as such wouldn't be subject to that clause. It will be the additional income clause and either be split 10/50/50 or 50/50 depending on your proposal. Once you pay across the additional salary due to the creditors, you can do whatever you like with your share. A f&f could take two or three months to go through so it may not be worth your while for such a short time remaining. If yu have the savings to offset the payment, it will be painless anyway! I hope I answered your question... I'm nber dyslexic so struggled a bit with the question!!!

Thanks for your answers so as long as I pay the excess 50% each month over to the IVA. I would be free to put aside the remainder, pay the monthly payments and in effect complete as I have enough to meet the payments. Also save on a variation meeting?

I do agree that this will come under the overtime and extra earnings header.

It's also not worth putting a variation forward now as by the time it's sorted the IVA may well have finished anyway.

You can do what you like with your 50%. However, if you pay any of that across it won't shorten the term of the IVA, just means that your creditors will get more.

djroyale wrote:

Thanks for your answers so as long as I pay the excess 50% each month over to the IVA. I would be free to put aside the remainder, pay the monthly payments and in effect complete as I have enough to meet the payments. Also save on a variation meeting?

Yes, the excess 50% is basically a "bonus" to the dividend payable to creditors. For ease of maths, say you saved £3000 from your 50%'s, over a period of time, and your monthly repayment was £500. You will have ehe equivalent of 6 months payments sitting in your savings account. So, the last six month will come from that account, freeing your current earnings.

You will still be in the IVA, but the effect on your current account will be that it all feels paid off.

Of course, any exceptional earnings during these last 6 months will still need to be paid over.

Why not use your 50% share to pay off the IVA earlier?

Hi Melanie

I think that was my orignal point could I do this and it end sooner? Will check with my IP

Most definately - it is your money to do what you like with, and if it results in an early settlement everyone should gain.