When do I make my first IVA payment?
Now that you have completed the IVA application process and had your arrangement confirmed, it’s understandable if your thoughts turn to the most important thing – when IVA payments will start coming out of your bank account.
In this guide, we’ll examine IVA payments, including how your payments are taken, when your first payment will come off, and whether your IVA payments will change during the course of your arrangement.
How are my IVA payments taken?
We use the Recurring Card Payment (RCP) method to collect your payments each month/week. We store your debit card details into our system and a card payment will be taken for your contribution on its due date, much like how you pay for your Netflix each month.
It’s important to note that we can also take manual payments over the phone, or online. If you are in need for a payment to be made, we can set this to be taken automatically for you, even if it’s a one off.
When will my first IVA payment come off?
You would have gone through a verification call early in your application process where you spoke with an adviser and talked them through your personal and financial circumstances.
Your first IVA payment will be scheduled to come off within 30 days of your verification call, and will fall on the same day each month.
How much will my first IVA payment be?
How much your first IVA payment is depends entirely on your circumstances – the size of the monthly contribution is based on how much you can afford to pay.
If you’re just about to make your first contribution, you will already have gone through an expenditure check. This takes into account your total income and outgoings, which are then used to calculate your disposable income.
Your monthly contribution will be based on your disposable income. Whatever money you have left at the end of the month after essential costs will go towards your arrangement. This figure will already have been worked out for you, and should be included in your IVA proposal.
When do you start paying my creditors?
When you make a payment towards your IVA, we will deduct a portion of that payment as an administration fee and divide the rest between your creditors. These payments to your creditors are known as dividends.
As per your proposal, we’ll make the first dividend payment to your creditors within 90 days of the commencement of your IVA, or within 30 days of when we receive your third IVA payment, whichever comes later.
The only exception to this is if any of the creditors named in your IVA are having trouble with their payment method or haven’t yet submitted BACS details, in which case payment might be delayed until those issues are resolved.
Can my IVA payments change during my arrangement?
We understand that a person’s situation is not going to stay the same for five years, and if your situation changes during your arrangement, your IVA payments may change as well.
If your circumstances change whilst you are in your IVA, it’s very important to notify us. IVAs are based on your affordability, and we will never ask you to make payments you can’t afford.
We can review your finances and adjust your case to suit, re-calculating your income and expenditure in order to make your payments affordable.
If it is a temporary change, you also have the option to request a break from your payments until it is resolved. However, if you choose to go down this route, we will require evidence of the reason you are unable to pay.
