An IVA is built around one monthly payment that stays affordable for five years. That's straightforward when your salary is the same every month. When your wages depend on overtime, rotating shifts or production bonuses, it needs a little more thought.
How overtime and shift pay are treated
Car manufacturing has been one of the city's biggest employers since Nissan opened its plant here in the 1980s, and many local businesses supply it. Add in warehousing, contact centres and the NHS, and a lot of people in Sunderland are paid partly through enhancements that aren't guaranteed. An IVA can handle that, provided the figures are set up sensibly from the start.
Averaging a variable wage
Rather than using your best month, your Insolvency Practitioner will normally look at several months of payslips and use an average. If overtime has been regular for a long time, it may be included. If it's occasional, it may be left out of the calculation so you aren't committed to a payment that depends on extra hours you can't count on.
Bonuses and one-off payments
Most IVA proposals say that bonuses, or a share of them, must be paid into the IVA. Check exactly how your proposal words this before you agree, especially if your employer pays an annual bonus or a lump sum after a pay deal.
What if your hours are cut or you're laid off?
Manufacturing and logistics around Sunderland can be affected by changes in demand, and short-time working or redundancy can happen with little warning. If your income drops during an IVA:
- Tell your supervisor straight away rather than missing a payment.
- A short payment break can often be agreed while you find new work.
- If the drop is permanent, your payment can be reduced or the IVA varied with creditors' agreement.
- Redundancy pay may need to go partly into the IVA, but you can usually keep enough to cover essential costs while you look for work.
Our guide to what happens if an IVA fails explains these options in more detail.
Agency work and temporary contracts
A lot of people in Sunderland work through recruitment agencies, particularly in warehousing, food production and the automotive supply chain. Agency work can feel less secure than a permanent contract, but it doesn't rule out an IVA. What matters is the pattern of your income over time.
- If you've worked through the same agency or on the same site for a long stretch, your average earnings can usually be used.
- If you move between assignments with gaps in between, your budget may need to be based on a lower, more cautious figure.
- If you're offered a permanent role during your IVA, tell your supervisor. A higher, steadier wage may change your payment at the next annual review.
Be wary of any adviser who builds your budget around your best weeks. A payment you can only meet in a good month is the most common reason IVAs run into trouble.
Is my debt the right size for an IVA?
There's no legal minimum, but an IVA usually only makes sense if you owe around £7,000 to £10,000 or more to at least two creditors and have a steady surplus after essential costs. If your debts are smaller, or a good overtime year could clear them within a few years, a Debt Management Plan may be the better route. You can try your own numbers in our IVA calculator.
Renting in Sunderland during an IVA
Gentoo is the city's largest social landlord, and many other households rent privately. Either way, your rent is an essential cost that's protected in your budget. Social landlords don't usually run credit checks on existing tenants, so an IVA shouldn't affect your current home. If you're behind on rent, keep paying your rent itself in full and get advice about the arrears early, because they carry a risk of possession proceedings that most other debts don't.
Council tax and household bills
Council tax arrears owed to Sunderland City Council can usually be included in an IVA, but your current year's bill must still be paid. If your income is low, ask the council whether you qualify for council tax support before your budget is finalised. Sunderland City Council can also tell you about any other hardship help available to residents at the time.
Water, gas and electricity arrears can normally be included too. Your ongoing bills sit in your budget at realistic levels, so you aren't expected to cut heating or food to fund your IVA payment.
What about my car if I work shifts?
Early starts and late finishes can make public transport impractical, and many workplaces along the A19 corridor are hard to reach by bus at shift-change times. For many shift workers a car is essential. If you need a car for work, it's usually treated as a reasonable cost. Finance agreements such as hire purchase are normally kept outside the IVA, with the monthly payment included in your budget, provided the car isn't excessively expensive.
Starting an enquiry from Sunderland
We're based up the road in Newcastle and handle enquiries by phone and email, so you won't need to travel. Have a few recent payslips to hand when we speak, ideally covering a mix of high and low months, so we can talk realistically about what you could afford. Send the form at the top of this page and choose a time to be contacted that fits around your shifts.
Free advice is also available from local Citizens Advice services and MoneyHelper. If you want to understand the basics first, read what an IVA is and the pros and cons.
Quick answers for Wearside workers
Does a pay rise mean my IVA payment goes up?
Possibly. Your income is reviewed each year. Many proposals say that half of any significant increase in disposable income goes into the IVA, but the exact rule is set out in your proposal.
Can I pay into a workplace pension during my IVA?
Normal workplace pension contributions are usually accepted, and that applies whichever Sunderland employer you work for. Large voluntary contributions may be questioned by creditors.