www.iva.co.uk

I am coming up to my first annual review and my partner, who is not in an IVA but who’s income was taken into account at the start of the IVA has had a pay rise of about £100 per month. I know that I need to tell my IVA company about this. Will they expect all the £100 to be added to my payment or none of it or a percentage?
My partner is not very happy that all of the increase may go to the IVA payment as where is the incentive to earn extra money?
Our expenditure is similar to last year so there is nothing that will offset this increase in income.

If he is not in the IVA then his money is his own. Initially his income was needed to calculate the reasonable share of the expenses. As a broad assumption ... if you were earning roughly the same the expenses would be 50/50.

The IP might recalculate expenses shares again, based on his new income, some, having made the intial calculation assume the share stays much the same.

This will depend on your IP and it's best you have a quick word with them.

If you are both paying a fair share of the bills then his share will go up. Thus freeing up more of your income for the IVA.

Thanks for your responses. But what do you mean by share. My IVA payment was calculated by adding mine and my partners take home pay together then taking away our expenditure and the difference is my IVA payment. It wasn't based on a percentage of my take home pay and my partners take home pay.

As I understand it your IVA payments should be based upon your disposable income, not that of you and your husband.

Say you earn (for ease of maths) roughly the same amount. they should add up your household ( so joint) expenses, as you earn the same they would assume you contribute equally to those expenses, so half would be yours.

Then take your income (only yours) deduct your share of the expenses which would give you your disposable income.

Hopefully an expert will put me right if I am on the wrong track.

It sounds like your partner is already contributing towards your IVA which is wrong unless he agreed to this. You should have a review carried out because if what you say is correct your partner may have been unfairly treated. While it is admirable to help your IVA it is wrong to be mislead into thinking he had to.

Broke of London wrote:

If you are both paying a fair share of the bills then his share will go up. Thus freeing up more of your income for the IVA.

No,if a partner gets a payrise and shares the expenses fairly already any increase in their income doesn't equate to more for the iva pot!

Paul

I suppose it depends on how you define fairly. If a client has 10% of the income and pays 10% of the outgoings that is their fair share. If their income goes up and they then have 20% of the income it is only fair they pay 20% of the outgoings. This would free up some money for the partner's IVA pot.

However, if the partner is already paying 50% or more of the outgoings then I see no fairness in making them pay more as 50% is the maximum the OR can estimate in bankruptcy.

I think you misread my post. A fair share is based on splitting the bills as the % of income. When the % split of household income changes so will the share each partner contributes to the bills. So if the non iva partner earns more, their share of the bills goes up. If the iva partners income has remained constant their share goes down and thus more disposable for the iva. It doesn't apply in this case anyway.

That's definitely one way of looking at it. It may seem fairer at first glance, but it's also more fragile as your IVA would now depend on your partner's income.

Whichever way your IP chooses to split shared bills must be consistent, but unless defined in your proposal I'm sure there are several opinions on the matter, all of them valid.

Any couple where a single partner is in an iva should make sure they know well in advance what will happen with any pay rises that the solvent partner receive. That partner should not and cannot be punished by using their income to increase contributions to the pot!

Paul

Thanks for all your responses. I'll contact my IP to see what they say. I understand that as my partner will have benefited from my debts that he must pay towards them, it's just the amount I'm not sure of. My Chairman’s Report does state that 50% of additional income must be paid into the IVA but it doesn’t state if that’s just my income or my partner’s as well.

In this case it sounds like the solvent partner pays across all his disposable income...apparently something more and more creditors are wanting. Wonder how many good relationships that will ruin? I can't imagine my boyfriend being terribly pleased. x

I can understand it if the partner has benefited from the debts, but if you start a new relationship with someone who nothing to do with your financial problems then other than making sure they put their fair share across to the family finances then that should be it.

HI,

this is an interesting thread. I'm going through the process now, my partner currently doesn't work and we have children. However, she may well find some part time work in the future. So I guess that any income she would earn after any expenses i.e. childcare, would get completely eaten up by the IVA since she would start to contribute to the household expenses (quite rightly of course). So if this is correct it follows that in this instance there is not point in trying to get work as it would A) mean children in childcare and b) my partner would see none of her income ( I know this wouldn't be acceptable to her).
Again, if this is all true, is it worth trying to put a clause forward something along the lines of only 75% of partners earned income (after work expenses) is taken into condsideration for the IVA - so that at least a little of any earned income is kept by my partner

thanks