If you are in an IVA, you will have to do an annual review each year. Your IVA company will ask you for information about your income and living expenses to see if your payments need to change.
Included in this article:
- What is an IVA Annual Review?
- The paperwork will you have to provide
- What if your income has increased?
- What if you can’t afford your payment?
Struggling with your IVA? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts.
What is an IVA Annual Review?
Once you have started an IVA you are not left alone. At least once a year, your IVA company will need to do a full review of your income and living expenses. This is called the annual review
They normally contact you a month or so before the end of each year of your agreement. You will have to complete and send in a new income and living expenses budget.
Your IVA company uses this information to decide whether your monthly payment should stay the same or whether it should change. Primarily they are looking to see whether you have earned more and whether or not your payment should increase.
Your annual review is not voluntary. It is a legal requirement of your IVA. If you refuse to do a review or give the information your IVA company asks for, your Arrangement could be terminated.
The paperwork you will have to provide at your review?
At every annual review you will need to give information about your income and living expenses for the past year. You will need to provide proof of this with supporting documents.
You will normally be asked to provide copies of your last 12 months bank statements and your last 12 months wage slips. Some IVA companies may ask for less, but the last 12 months is normal.
Your IVA company may have electronic access to your bank account. This allows them to immediately pick up any changes to your income. They will then adjust your payment accordingly. You will need to speak to them if you feel they have made a mistake.
You will have to provide your bank statements and wage slips at each annual review so your IVA company can check to see if your income has changed.
What if your income has increased?
IVA payments are not fixed. If your income goes up or you earn overtime, your payments can increase. This does not mean that your IVA will be paid off any quicker. You still have to make the same number of payments. You simply repay more of your debts.
That said any increase in your income may be offset by changes to your living expenses. For example if you have got different job you may have an increase in your travel expenses. When you do your annual review, make sure your IVA company is aware of anything like this. However they are unlikely to agree to increasing your expenses simply because the “cost of living” has gone up.
When you earn extra overtime or have a pay rise, don’t wait until the annual review before telling your IVA company. If you delay and your payments have to go up, you will be in arrears. You will then have to pay a lump sum to catch up or have your IVA extended.
If your income stays the same but your expenses go down, this can also result in your IVA payment being increased.
What if you can’t afford your payment?
A reduction in income is always a concern. If it happens you will probably be unable to afford your existing IVA payment. Were this happens speak to your IVA company immediately. Don’t wait for your annual review.
They may be able to reduce your payments to a more affordable level. Where your surplus income has fallen by 15% or less, they do this without getting agreement from creditors. If the decrease is larger than they would have to ask the creditors to accept a formal ‘variation’.
If you ask for a payment reduction you must expect the term of your IVA will be extended to compensate. The extension will normally be an extra 12 months but could be more.
If you are struggling to pay your IVA or have been asked for an increase you feel you can’t afford, speak to us. We can advise on your options and what you can do. Call 0800 077 6180 or complete the form below.