A summary of the repayment calculation process

The main concern for many people looking into an IVA as a means of solving their debt problems is how much they will have to pay back each month.

It’s only natural to be anxious about this given the circumstances leading to you considering an IVA.

Who decides the amount and how?

Your IVA proposal has to be compiled by a Licensed Insolvency Practitioner (I.P.)

They will conduct a review of all your income and expenditure in order for them to calculate your disposable income.

In order for them to do this effectively, you will be expected to provide paperwork showing your salary and any other income as well as up-to-date statements of what you owe to all of your creditors and how much you’re paying them each month.

You’re allowed to include reasonable household expenses such as food, petrol etc but luxuries such as eating out, gym memberships and holidays can’t be included.

Once your Insolvency Practitioner has taken all these things into consideration they will arrive at a figure which reflects your disposable income and this is the figure you will be required to pay to your creditors.

In order for your IVA to work it’s crucial that the amount calculated is affordable. If the amount set is unrealistic or too high, then you should inform your I.P. straight away, letting them know the reasons why.

Budgeting

It’s important to bear in mind from the outset that your lifestyle may have to change in order to make your IVA a success.

You should also let your Insolvency Practitioner know immediately if your financial circumstances change.

For example if you’re made redundant then you may be able to negotiate a temporary break in payments. Equally, if you were to change jobs and receive a higher salary for example then you need to inform your I.P. so that they can adjust your repayments accordingly. Failure to do so violates the terms of your IVA agreement and could lead to you being made bankrupt.

Call now on 08000 43 43 47 to discover if an IVA could be the solution to your debt problems or complete our IVA Wizard and see if you qualify for an IVA