v Will my IVA be affected if I change my job?

Will my IVA be affected if I change my job?

No, your IVA will not be automatically affected if you change your job.

Your IVA doesn't depend on you maintaining the same occupation for the duration of the IVA, but it does depend on you maintaining your IVA payment.

So, the affect of changing jobs itself isn't the issue, it's the difference the change makes on your income that matters.

Reassessment Of Income

When your IVA began, your IP assessed your monthly finances to establish your IVA payment.

So, if you change your job, your IP will need to re-evaluate how much you can afford to pay into your IVA.

Increase in income

If your new job generates an increase in income, there is a good chance that the amount you pay into the IVA will rise.

All IVA payments are based on affordability and if you can afford to pay more, creditors will want you to pay more, because the more you can repay during the IVA, the less they'll have to write off at the end of your IVA.

The re-evaluation will take note of any increases in expenditure incurred as a result of the change, for instances, increases in commuting costs or other work related expenses.

These changes will be used to offset some of your new income, thus reducing the increase.

Creditors will then expect your IVA contributions to increase by half of the net increase to your income.

Decrease in income

When a new job returns a lower income, your financial assessment will determine whether you still have sufficient financial resource necessary to maintain your IVA payments.

Your IP has the discretion to allow a drop in IVA payment of 15% without the need to seek creditor approval.

As a result, a small drop in income might not cause a significant problem.

But for larger drops in income, your IP may suggest a Variation Meeting be called, to provide your creditors with chance to vote on approving a reduction to your IVA payments.

Although the outcome to such a meeting is never guaranteed, it is the only way to continue with the IVA when affordability has fallen significantly.

Obviously, if the drop in income is so large as to completely remove the ability to afford future IVA payments, it's likely the IVA will be destined to fail.

Keeping to your IVA payment schedule

You also have to bear in mind that if you change jobs during your IVA, your IVA payments will still be expected on schedule. If this poses a problem to you, you should approach your IP for advice.

They may be prepared to introduce a temporary payment break, but this is not always the best option, so discuss your change in circumstances with your IP and explore the options with them.

They may be able to help you maintain your payments by amending them slightly instead, rather than taking a payment break straight off.

Communication is key

Experience tells us that the most important thing is to maintain good communications with your IP, especially if it becomes necessary to make any material alterations to your IVA.

And, so long as your IVA supervisor is kept abreast of any changes, everything should be straightforward.

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