So how much do you pay with an IVA?
The payment into an IVA will always vary between IVA cases, so it is not quite so straight forward to work out as you might think.
Bottom line is though, that you should only ever be asked to pay into an IVA what you can afford.
If you try to overstretch yourself the chances are your IVA will fail to complete. You will suffer the typical symptoms of debtor’s fatigue, which will result in IVA failure.
So, how do we calculate how much you pay into an IVA?
Well firstly, we take a detailed list of all the household income. This will generally consist of wages, overtime, and any work bonuses or commissions. We add to that any other income that the house is receiving, such as Child Tax Credits, other benefits, allowances, bursaries and possibly even lodgers contributions of board where appropriate.
Once we are happy that we have a list of all incomes, we then list out all the outgoings for the family.
Every single expense is added to the list, starting with the big expenses such as mortgage payments, rent, council tax and so on, right through food and clothing expenditure, utility costs and all the way to family costs for haircuts and hobbies, with an amount set aside for sundries at the end.
Once we have taken account of everything, we are able to see the difference between the two numbers. This difference is called your Disposable Income.
Your disposable income is the amount that you will be able to offer to your creditors, because every other part of your income has be allocated against a monthly cost that you know you will need to pay out.
An IVA will only ever require you to offer your disposable income, this is because an IVAs repayments are always built on affordability.
So that’s how we work out how much you pay with an IVA…. simple really!!
If you would like to see if you have sufficient disposable income to enable you to apply for an IVA then you should call My IVA Adviser on 0800 088 7503 and ask for a ‘no obligation’ consultation.