This page contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as a debt solution, please make sure you fully understand the risks involved. Please visit our website for more information.
An IVA can be an effective solution when you’re struggling with unsecured debts.
The secret to keeping on top of an IVA is to stick to your budget and keep a close eye on any overtime, or bonuses or increases in your salary.
Wages and IVA terms and conditions
We all love it when we get a pay rise or a bonus. Even small incremental rise can be cause for cheer; after all, as the supermarket chain says, every little helps!
Because you’re subject to an IVA you have certain responsibilities with any pay rise or bonus.
The standard terms and conditions of most IVAs state something like:
Where you are employed, you must report any overtime, bonus, commission or similar to the Supervisor if not included in the original surplus calculation, where the sum exceeds 10% of your normal take home pay. Disclosure to the Supervisor must be made within 14 days of receipt and 50% of the amount (over and above the 10%) shall be paid to the Supervisor within 14 days of the disclosure.
Let’s make this simpler…
I’m not good at maths!
You’re allowed to earn 10% more than we listed as your income in your IVA proposal.
Above the 10%, you’re allowed to keep 50% of whatever you earn on top of the first 10%. The rest has to be paid into the IVA.
What’s really important is that if you do get a pay rise or receive overtime, commission or a bonus that takes your wages above the 10% extra threshold you should contact us straight away. Many IVA proposals state that failure to disclose any such overtime, bonus, commission or similar by you will be considered a breach* of the IVA.
If you are unable to pay the additional income into the IVA and supply an acceptable explanation to remedy the breach your supervisor will convene a meeting of creditors to vary the terms of your IVA. If you do not respond to the notice of breach or you are unable to offer additional payments your IVA may be terminated.
The good part
The good part is that there is room and encouragement in your IVA to go for overtime (essentially even if you go over the 10% you still get to keep tidy amount of anything extra you earn). There is also a genuine reason to go after commission and hit your targets at work.
Creditors have agreed to write off some of your debt but you won’t be punished if you do overtime, work harder, or try your best. Just remember to tell your IVA caseworker if you get a wage packet that’s more than 10% larger.
*A notice of breach gives you one month to pay in the additional money you have earned and explain why you failed to disclose it. For more information on breach see part IV of the standard conditions to your IVA.