Your Annual IVA Review

IVA rules require that everyone within an Individual Voluntary Arrangement is subject to a review on or around the time of each anniversary of the start of the agreement.

An annual report will be issued to you and your creditors confirming the progress of your arrangement to date. Your IVA supervisor is required by law to issue this report to you and your creditors within two months of each anniversary of your arrangement.

In about 90% of cases, monthly IVA payments do not change as the result of an IVA yearly review.

This report will include details of all payments made by you, the level of fees charged by us and any distributions made. The report will also detail anything else which may have happened for example if you have been granted a payment break or had an IVA variation approved. It will also confirm the outcome of your financial review.

Financial Review

The financial review is simply a review of your current income and expenditure, using the same expenditure guidelines as when we made your IVA proposal. The review is to assess whether your current payment levels into your IVA remains a fair reflection of what you can reasonably afford. If your circumstances have improved significantly, we will discuss with you whether you can afford to contribute more. Other matters within your IVA proposal may also be considered. For example, you may have agreed to sell an asset or a hire purchase agreement may have finished.

Why Is A Review Required

As supervisor of your IVA, on behalf of your creditors, we have a duty to collect as much of the money owed to them over the duration of the IVA as you can reasonably afford.

Your creditors have agreed that you need not pay all that you owe to them and stop all interest on your debts and if your circumstances change to allow you to pay more, it’s only fair that you should. Conversely, if your situation changes for the worse - you may only be allowed to contribute less, but still complete your IVA.

Under What Circumstances Could My Payments Increase?

We may ask for an increase in the level of contribution if there has been a significant change in your circumstances such as a promotion, or a new job with a significant pay rise. We usually ask for increases in contributions in about 10% of cases, but only when there is a clear increase in the client's ability to pay.

The Annual Review Process

Around a month before each anniversary of your IVA, you will be sent a request for an up to date income and expenditure statement.

This will be accompanied by a copy of the most recent initial income and expenditure statement we have from you. You must to go through the form and provide details of any changes in your circumstances. You will need to complete this and return this to our office together with:-

• The last 12 months wage slips,
• Latest 3 months bank statements for all accounts held,
• Latest P60 and
• Any other documents that may be requested.

Once this information is received by our office, an assessment of your financial situation will be undertaken. This could result in contributions staying as they are, an increase in monthly contributions or a variation to the terms of your arrangement.

We may ask for an increase in the level of contribution if there has been a significant change in your circumstances such as a promotion, or a new job with a significant pay rise. In the majority of cases payments will remain the same and we will only ask for an increase in contributions when there is a clear increase in your ability to pay.

If your income has increased by more than 10% than that quoted on your original income and expenditure in your IVA proposal and there has not been a significant change in your expenditure then it is likely you will be asked to increase your contributions by 50% of the difference.

An example of how this is calculated is as follows:

The new IVA payment is calculated using the original IVA payment plus 50% of the surplus funds available.

Overtime and Bonus Payments

If during the term of the arrangement you receive any overtime, bonus, commission or similar, you must report this to your supervisor if it was not included in the original surplus calculation.

You should do this within 14 days of receipt and where the sum exceeds 10% of your take home pay 50% of the amount (over and above 10%) shall then be paid to the supervisor within 14 days of the disclosure.

If you fail to disclose any exceptional overtime, bonus, commission or similar this will be considered a breach of the arrangement.