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Spook Posted - 17 Jan 2019 : 05:03:33
I understand that 10% of extra income - bonuses and etc can be kept. What if company paid annual bonus in company shares? It would work out less than 5% at the time of payment, but through IVA period it might increase in value or even if remains the same at the end of 50 months it would be an equity...
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IVA Adviser Posted - 17 Jan 2019 : 15:57:21
Hi Spook.

You've mentioned you might have started an IVA already? If so, it's best to run these questions by your supervisor. It's their reading of your situation that will count.

If you're not yet signed up it might be worth getting a second opinion. Different firms might make slightly different judgments.

A cash bonus will be treated as income. Shares (which you may not be able to sell for some time) are more likely to be treated as an asset I think.

As you suggest, having some money set aside certainly seems prudent. This is especially the case if you're contracting.
Spook Posted - 17 Jan 2019 : 14:02:39
So when does it change from windfall to 10%?
Bonus in my case would be only once a year, depending on company performance. No guarantee of it. And definitely less than 10% of my annual take home.
Therefore I'd budget expenses without taking it into account and should be comfortable with it being put into "rainy day" fund.
1. am I better off spending it to avoid it being taken off?
2. Would I be asked to go 50/50?
3. Would it be included into my annual income prediction for the next 12 months?
4. Would it be taken as a lump sum 4 years down the line?
5. I'm working in contracting so there is real possibility to be "layed off" (complusory leave without pay) for couple of weeks a year - sure "the rainy day fund" is in creditor's interest too...
IVA Adviser Posted - 17 Jan 2019 : 12:09:10
Hi Spook,

If you've started an IVA, you should check this with the firm you have chosen.

They may be comfortable with it. They may feel that if you can save that much that you could afford to pay more each month. It's their judgment call.

If you haven't yet started an IVA, this is something you'd want to clarify before you go ahead with any particular firm. They might take slightly different views on this.
Spook Posted - 17 Jan 2019 : 11:33:56
Thanks for your reply
So if I get bonus in cash under 10% can I put it in a savings account?
In 5-6 years it would be over 5K though and I presume I'd be asked to pay it in.

Best regards
IVA Adviser Posted - 17 Jan 2019 : 10:05:46
Hi Spook,

Shares would be an asset.

It's possible that the IVA provider might expect you to realise the value of that asset (and pay it into the IVA) if it is possible to do that.

You should clarify with the IVA provider that you choose how they would view such shares and what your obligation will be. They're a little different to cash, so I'm not sure they'd be seen in the same way as an income increase.

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