IVA survival - making the most of income
How to maximise income before or during an IVA
To be honest, it’s difficult to increase income during an IVA without it affecting the IVA payment level. This payment level is based on affordability and increased income will lead to increased IVA payments. Unless of course our outgoings have increased making the current IVA payment level unsustainable. It is possible to reduce the IVA payment level, but for some the increased outgoings have meant there is little or no funds available for the IVA. Of course, this may mean the IVA has to fail and a bankruptcy solution sought. But for some it may be possible to increase income by taking a second part-time job, or taking in a lodger.
Assuming there is no significant increase in outgoings, those in an IVA understand that increased income needs to be declared to their IVA Company and is likely to lead to an increase in monthly payments to the IVA. It is the IVA Company’s responsibility to ensure that creditors receive as much as is affordable back on their debt. Promotion at work, any windfall, increased benefits and overtime or bonuses do need to be declared.
However for some, there is the opportunity to increase income by undertaking overtime. Exact terms may vary, but usually in an IVA, debtors are allowed to keep a proportion of overtime earned. Typically, the first 10% extra on wages can be kept. So someone receiving £1500/month net – could receive an extra £150 by way of overtime – without the need to make any further contribution to the IVA. And then half of overtime payments received over and above the first 10% can be kept. So someone receiving £1500/month net wage and earning ab extra £500 in overtime – would keep the first £150, and half of the rest i.e. £175 would be made available to the IVA. But the debtor in this example has earned an extra £325 this particular month.