IVA charges

ab123_2

Hi i first posted last week about starting a iva. have now had the proposal. They dont tell you at the start that they can increase the term of the iva if there is no equity in your house after 54 months.I CANT BELIVE THE CHARGES ARE £9000 if i make a arangement with my creditors paying £250.00 a month to cover all but 2 of my creditors (which i have a arangement already in place) i will have paid back my full debts in 51 months.But with iva they would only get a third back because the rest goes in charges.Surely i would be better makeing arrangements with creditors.payplan said i couldnt do a dmp because it would take to long to pay my debts.So recommend i do a IVA with their partership no wonder with charges like that.I am going to be brave and talk to creditors my self.Hope common sence prevales and they will freeze interests.I can but try hope im doing the right thing.

MIVAA

Hi AB123,

What's the total amount of debt that you have?

I can't believe that Payplan wouldn't have explained more clearly why they believed an IVA was in your best interests if that was what they really thought.

If they consider a DMP would take so long to repay your debt, is it that you do you not agree? It's quite an easy assessment to make for yourself, simply divide your debt by the amount you would be paying into the IVA, and you'll see the difference. The futher beyond 60 months the more attractive the IVA becomes and conversely, the closer to 60 months the less attractive.

If the case for an IVA is not obviously advantageous for you, then you really should look at the alternatives.

It maybe worth while getting a second opinion though, before you abandon the IVA option completely, as the advantage of an IVA over a DMP for your particular circumstances maybe more than just a lower term of repayment.

MIVAA

Charco_2

ab123 wrote: »

Hi i first posted last week about starting a iva. have now had the proposal. They dont tell you at the start that they can increase the term of the iva if there is no equity in your house after 54 months.I CANT BELIVE THE CHARGES ARE £9000 if i make a arangement with my creditors paying £250.00 a month to cover all but 2 of my creditors (which i have a arangement already in place) i will have paid back my full debts in 51 months.But with iva they would only get a third back because the rest goes in charges.Surely i would be better makeing arrangements with creditors.payplan said i couldnt do a dmp because it would take to long to pay my debts.So recommend i do a IVA with their partership no wonder with charges like that.I am going to be brave and talk to creditors my self.Hope common sence prevales and they will freeze interests.I can but try hope im doing the right thing.

Of course an IVA is going to cost money, you are asking a professional to look after your interests regarding your finances. (i'm not meaning to sound harsh although re-reading that sentence i may come across as a meanie :mad:).

If your proposal includes an intention to address the equity in any property then this will have to be realised at some stage during the course of the IVA. An IVA will run for 60 months but this CAN be increased to allow you to achieve a dividend that will be deemed as acceptable to your creditors - for instance if the equity in your property falls or you are unable to realise it (can't sell or whatever). The "54th month..." would be a FOURTH YEAR VALUATION to make sure the creditors are receiving their best acheivable outcome. (An IP must fairly represent the interests of both the DEBTOR and the CREDITOR)

The overall fees chargable will reflect the amount of work put in by your IP. This will be negotiated between your IP and the credit houses (or accountants representing your creditors - or the TIX Cartel :mad:). The important thing is that the fees negotiated will not become an extra burden on you the debtor... You will be asked to pay an affordable contribution each month for the duration of your proposal.

(£9,000 sounds excessive alright out of contributions of £15,000 and it would be unlikely that your creditors would accept this, the fees would end up being slashed - and hopefully wouldn't see your IVA being rejected)

One thing I WOULD be concerned about is WHY ARE THERE TWO CREDITORS NOT INCLUDED IN THE PROPOSAL... I assume they are secured creditors!?!?!?!?!?

As for a DMP v an IVA, the choice is yours, your IP has a duty to discuss ALL your options with you before letting you make such an important decision. An IVA has a definite date at which you will resolved your finances, a DMP can run indefinitely. A DMP is informal and can be good for getting the creditors off your back in the short-term, an IVA is formal and may require more commitment but at least you know it will finish at a set date.
(In the five years your IVA will run, you would pay £3,000 anyway to a DMP at the same contributions but you may not be any further down the road to resolving your debt problem)

PHEW... such a long post for a first-timer, just got a little carried away there!

ab123_2

Hi i thought this site was here to ,not make you feel worse than you already do ,what im trying to say is that payplan dont tell you how much of your of your hard to find payments go to expences, and not to your ceditors.They also said i cant do a dmp ,which is rubbish a couple of creditors have already excepted my payments rather than only getting a third back.I accept some expence accurred by them, just not to the tune of £9000.Just found out hubby will be made redundant next year so will pay all of debts off.

Charco_2

Sorry, the last thing i would want to do is make anyone feel worse, so genuinely i apologise.

ab123 wrote: »

Hi i first posted last week about starting a iva. have now had the proposal. They dont tell you at the start that they can increase the term of the iva if there is no equity in your house after 54 months. This is wrong - your IP or their company really should have explained all the possible outcomes of your proposal and also discussed all other debt solutions in detail to ensure YOU knew that YOU were making the right decision. The IVA provider cannot make this decision for you, only offer best advice and let you make your own mind up

I CANT BELIVE THE CHARGES ARE £9000 This is also surprising to me. I work in an insolvency company and know that fees average out considerably less than this.

if i make a arangement with my creditors paying £250.00 a month to cover all but 2 of my creditors (which i have a arangement already in place) i will have paid back my full debts in 51 months Including compound interest over the course of 51 months?

with iva they would only get a third back because the rest goes in charges.Surely i would be better makeing arrangements with creditors. Not necessarily, you should do what is best for you, not for your creditors. In a lot of instances, creditors should take some responsibility for the position debtors find themselves in.

payplan said i couldnt do a dmp because it would take to long to pay my debts. As i said above, the choice should always be yours, but obviously you'd like to trust any company to give you all the best advice

So recommend i do a IVA with their partership no wonder with charges like that.I am going to be brave and talk to creditors my self.Hope common sence prevales and they will freeze interests.I can but try hope im doing the right thing. I wish you all the best with this. be careful however because you are going down an informal route which creditors are able to change their minds on at any stage (DMPs are also informal but with reputable companies at least they'll take the flack for you and continue to fight your corner even after creditors lose their patience)

Again can i just say how sorry i am if i contributed to making you feel worse about this.

james32_uk

At the end of the day an IVA is about a solution for your debt. If it is accepted then it will be a fixed amount based on your income and necessary expenditure. Why should you care where the money goes to? You need to look after your own best interests and if IVA is right for you then you shouldnt let that put you off.

Good luck!

thecableguy12

as mentioned the voting proxies will slash the fees def, if the fees are to high then its a less of a divedend to creditors so once the meeting happens the fees will be slashed