A reader asked:
I’m worried about my first IVA annual review. How much detail will they go into? I’ve found the year tough with a few car problems. I switched gas and electric to try to save money but it hasn’t helped much.
This is one of the many IVA issues where I have to start by saying that there is no definitive answer for everyone. It depends on the terms of your IVA, your IVA firm, your own situation and on how much your situation has changed over the year.
If not much has changed
Unless your income has gone up or your expenses have changed a lot, the annual review is often pretty painless.
You will normally be asked for some bank statements (or, sometimes, direct access to your bank account), some payslips and any P60s/P45s. Some firms want you to complete a new Expenses form – you can use the one agreed at the start of your IVA or the previous year as the basis and then look at your recent bank statements to see how much has changed.
If the overall picture and the bigger items such as mortgage/rent, travel costs, utilities look much the same, not many lenders will go deeper. They don’t want to spend any more time on your annual review than they have to! You are very unlikely to be asked what you bought at John Lewis for £120 in September or challenged about £20 spent on bingo in May.
You have had extra income (or lower expenses)
Your income may have gone up because of a payrise, better job, bonus or overtime. Most IVAs are similar to the 2016 IVA protocol to cover this so what I am describing here follows those standard terms.
Increases in your pay will result in your future IVA monthly contributions being increased, unless your expenses have also increased, see below.
You should have reported overtime and bonuses to your IVA firm during the year if they exceeded 10% of your normal take-home pay. If you didn’t do this at the time, this will be looked at in the annual review and you may now owe some money for last year, typically 50% of the amount over the 10% you are allowed. If you had put that money aside, you can simply pay it. If not, your IVA term may be extended by some extra months to allow you to pay the extra.
If overall your expenses have gone down, this increases the amount of “surplus income” you have in the same way that a pay increase does.
This comes as an unpleasant surprise to some people who thought they just had to make the “agreed payments” for the five years of their IVA. It should have been explained to you before the IVA started – it probably was, but you may have thought it wasn’t important small print.
Your expenses have gone up
Although it may feel that IVA firm just wants to do the annual review to get extra money from you, increases in your expenses also need to be taken into account. It is to your advantage to make sure this is done!
Think about recent changes in particular. For example if your council tax or water rates have only just gone up, the annual total for last year may not be very different to the budget, but you now know that next year’s expenditure will be higher so this needs to be pointed out to your IVA firm.
If your income has gone up, increases in your expenses may mean that you don’t have to increase your IVA monthly payment.
When your income hasn’t increased but your expenses have, you may be starting to find it hard to manage. The annual review is a good point to talk to your IVA firm about this, before you hit a crisis and can’t make your monthly payment.
They have the discretion to reduce your payments by 15% from those originally set in your IVA. Larger reductions may be possible if your creditors agree. These reductions are more likely to be possible if you are paying £200 a month than if you are only paying £70, where there is little room to reduce the payments.
Dealing with the B team for Customer Service?
After being cherished and valued while you were in the process of signing up for an IVA, the annual IVA review process may feel very different. You get a curt email telling you to produce six pay slips and three bank statements and to fill in an Income & Expenditure form.
Even the most factory-like IVA company actually would rather your IVA succeded than failed, as it means less work and more fees for them. But many large IVA firms do not have a good reputation for customer communication. It’s hard to talk to anyone on the phone and emails sometimes seem to be ignored.
If this happens to you, don’t panic, it doesn’t mean your review is going to go badly.
But if you don’t agree with the proposed monthly payment at the end of the review, be prepared to keep restating your point. Start to do this in writing (email is fine) and insist on getting a reply if you think they are ignoring something important.
Overtime, new baby costs & an IVA
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How equity release works in an IVA
Tim Harness says
Once again a very good review from the Debt Camel!
Chris Johnson says
Also, if I may add, if you are with Creditfix you need not got through the pain of houshold bills or payslips.
They have a new (and very good) online system that searches your bank account and sorts all payments into catagories which you can alter if you disagree. It is extremely accurate and much less of a pain.
I will also give you a good example of payment increases. I am now only two payments away from completion but in November I was given a small pay rise and promotion. This only came to around £104 per month. I informed them 3 times including a wageslip. This all seemed to be ignored, at the review in November my payments were increased by £25pm which was absolutely fine by me.
Deciding_if_an_iva_is_the_answer? says
Do they complete credit checks again? And check your details that way? Or do they just look into the one account you give them?
I want to save some money in an account and don’t want it to be viewed by them.
Sara (Debt Camel) says
My guess is the system will spot you transferring money into the savings account… There is no reason why you shouldn’t save small amounts in an IVA – very few people are able to save large ones!
Franbrad says
I was with Mccambridge Duffy. During my IVA I only had to send pay slips and complete an expenditure form.
When I had unexpected expenses I was able to contact them easily and arrange a payment break.
Any letters received from my supervisor were, as you said curt, however overall, it was a positive process and I completed in full a year ago.
Ron Lake says
I was diagnosed with terminal cancer in Nov 2018. Suddenly my housing benefit was increased, lowering my rent. I also started to receive Attendance Allowance. These were said to be ‘legislative’ and none means tested. Can Aperture / DFD count these as extra income?
Sara (Debt Camel) says
Yes they can be counted as extra income BUT some IVA firms won’t do this AND for those that do, you should also be allowed to add any additional costs that you have because of your health problems. These could be extra heating, food, transport costs eg parking at hospital or taxis to get to appointments.
Have you talked to Aperture about this? If not, do so straight away, I would expect them to be sympathetic and reasonable given your situation.
How long until your IVA finishes? Are you managing the current payments OK or are they a struggle?
Ron Lake says
I never missed a payment from the start. The start date was June 18th 2014 and has to run for 72 months. It was a struggle until my condition caused the Housing Benefit increase and the Attendance Allowance to begin. It appears that they will allow me to keep 10% plus 50% of the remainder. These started in September 2018, but as I was told they could not be regarded as income, I didn’t report them to Aperture. They sent me papers around 18 Dec 2018 regarding a revue and demanding this was completed by 21st December, but these reviews are usually conducted in June of each year. That doesn’t sound very reasonable to me. We now have to use a computerised system to complete the review, which is something else I am expected to cope with. I wish I could find a telephone number for them, so that I can explain what happened, as it has still not been completed.
Sara (Debt Camel) says
No that doesn’t sound good unless they have allowed you to increase your expenses as well :( You need to put in a formal complaint and ask them to look at this.
Denise Ramadan says
Hi please can you help, we have finished our IVA and got our certificate of completion, but i can not seen to get it taken off or state settled on our credit file, we started this Iva back in march 2011 and finished in August last year, should it still be showing ?.
I keep calling Aperture and can not get though, any help please
Sara (Debt Camel) says
When did you get the certficate of completion?
KT says
My father wants to give me £1500. He inherited money when my grandmother died and wants to give some of it to me and my sister.
I told my IVA firm this to check it wasn’t an inheritance but they say it has to go to my IVA anyway as it’s over £500. What would happen if I asked dad to only give me £500? I don’t want to wait until the end as my IVA has 3 years to go and we really need some things in the house asap. But now they know it should be 1500 can they take the 500 because I’m trying to get round the rules or something?
Sara (Debt Camel) says
It won’t be a problem if you are only given 500 – this money doesn’t belong to you now, you have no legal right to it, it is entirely up to your dad when and how much he wants to give to you. If your IVA firms says anything about this, just tell them you explained about the IVA to your dad and he said he would only give you £500.
Your dad could then give you another £500 in 18 months time. If your partner doesn’t have an IVA, another option would be for your dad to give the £1500 to them, not to you. Or of course your dad could buy the new washing machine or whatever you need and let you use it. Lots of possible options if your dad is agreeable.
Lionel J says
Hello All,
Could you please advise. Last year our iva firm made me pay extra because I was over my allowable pay, for a few months of the year.
I understand this, you keep 10% and anything over that they ask for half and you keep half.
My question is … is this correct for seasonal work?
I’m busier in the summer months than the winter. So I save up any extra in the summer so I can survive in the winter when my pay is a lot less.
Also my partner’s pay is limited to £520 per month, before the above comes into action. Our son gets DLA and we receive carers allowance.
Is carers allowance classed as income? So should it be added to the £520 ? As what she can earn each month before half gets taken off her.
The carers allowance and DLA may be stopping.
Thanks for your help Sara,
Sara (Debt Camel) says
Can I ask if you have a mortgage or are you renting?
If you have pay that varies by season, this should have been discussed with your IVA firm befor eyour IVA was set up – was it? Who is the IVA firm?
What do you mean your partner pay is limited?
Lionel says
We have a mortgage. Its interest only. So nothing is getting paid off it at the moment. Approx 12 years to go on it.
The seasonal work started as the iva started. It was not discussed with McCambridge Duffy.
Our son at the time was 16/17 years young when we started. they did say if we didn’t include the DLA then you are unlikely to get the iva approval.
Sorry maybe a better word … Partner’s pay is ‘limited’ to £520 per month, before they take … 50% to the iva and 10% over that I believe she can keep and anything over that 50 % goes to the iva.
My pay is limited to £790 per month.
Winter time I can get as little as £550pm and summer £1000pm.
None of this is classed as overtime. I’m employed on a zero contract hours.
Sara (Debt Camel) says
So with those points where the “overtime” calculations start, do you think you can manage the IVA payments through the winter?
Your son’s DLA will be ending, has he applied for PIP? Will he carry on living with you? Was this discussed when your IVA was set up?
Lional says
That’s the whole point I can’t quite grasp. There is no overtime. I have simply saved up in the summer to manage in the winter.
Yet at last years review (April), I ended up paying £350 more to them. I did spread this out over my busier months.
My review is due now , so because this was not discussed at the beginning I guess I will have to pay an amount again as some months I have gone over the £790pm ?
Our son is in the process of applying for PIP. He does still live with us.
This was discussed at the beginning and they basically said we would not get the iva if the DLA was not included in our income.
Thanks again Sara
Sara (Debt Camel) says
I think you need to discuss this with your IVA firm in the review. Say you need to be able to save up more in the summer to get you through the winter, this isn’t “spare” money.
The PIP issue you can’t do anything about now, you just have to wait and see what happens.
Lional says
Thank you Sara.
Warren says
Hi
After reaching 5 yrs i was informed because of done equity i have to oay a 6th year. Not wanting to do this i offered to pay a lump dum of £7000 (i currently pay&491/month) this was from a loan, they held a meeting and agreed.
Do i still have to complete the review even though the IVA company have agreed this will end the IVA?
Also i used to do some scouting which we now receive expenses for the time we spend and also we are refunded the mileage , this is approximately
£350/month i spend around 20 hours per week. Are the IVA company entitled to all of this ? Some of it? Not the mileage ? Or none because its just expenses i have
Acrued?
Sara (Debt Camel) says
Yes there will still be a final review.
That is a lot of extra money if it was over many months, have you not mentioned this to your IVA firm before? If some of it relates to extra mileage, I wouldn’t have thought that would count as income. But “expenses for your time” does sound like it may be income.
Mike says
What is the maximum debt repayment by joining the IVA program? Is it 100% of my debt or you can taking as much as you want if my financial situation improves?
For example: I earned £ 1,500 a month and had expenses of £1,400 so I could pay IVA £100 per month. After a year, my financial situation has improved and I earn £ 2,800 and my expenses have not changed so I have £ 1400 left in my pocket, which I have to give 50 perceny of this extra £1400 to IVA which gives £ 700 per month.
My total debt is £ 12,000 and agreement from creditors to pay £ 6,000 over a 60 month which gives £ 100 a month. Now I have to pay £ 700 a month plus all the other bonuses they take away from me too! Which means that I pay over £ 30,000 for the next four years !!! Is it possible?
Regard Mike
Sara (Debt Camel) says
It is 100% of your debt plus the IVA fees plus (sometimes, not all IVAs have this clause) 8% per annum statutory interest on your debts. I suggest you ask your IVA firm if you carry on paying this much, when will your IVA be completed?
Mike says
Thank you very much for the answer but I have one more question. My new job is temporary so what will happen and I know that happen if one day I come back to my earlier earnings or even lower? I will have to wait until the next settlement? I will not be able to pay such a high amount during this time.
My IVA start last year so four more years left 🙄
Sara (Debt Camel) says
Your IVA payment can be reduced at any time if your income drops a lot, you don’t have to wait for the annual review. If you can save some money when you are getting paid more (the IVA shouldn’t take all your additional income) that will help you get through.
Ally says
I have received a small windfall from an insurance accident. I did not claim for loss of earning, just for pain and suffering. I’ve also tried contacting the Iva company to inform them about this but have not had any response from them.
Will I be able to keep the money or will this be taken off me?
Sara (Debt Camel) says
which IVA firm?
Ally says
It’s called Hanover
Faye says
I’ve been on my iva for the last 9 months now. I only ever had 140 pound left to myself after all the Bill’s, food and expenses but as I dont need to pay my partner much support payment anymore i have 400 pound left to myself monthly.
Will my iva take this off me or charge me more monthly or can i save it up in an isa so i can buy a new couch for my home or save the 400 extra monthly for a deposit on a home to mortgage when my iva finishes?
If I can save it up monthly will the iva take my savings off me if they reach into a high number like 10000?
Sara (Debt Camel) says
At your annual review, your IVA firm is likely to notice that your expenses have dropped a lot and ask you to increase your monthly payments into the IVA.
Of course if you have some other expenses which have increased, that will also be taken into account. But it is very unlikely that you will be able to save up large amounts of money each month.