DFD failed iva but 7k taken in fee's???

brainy74

my wife and i have just failed an iva with DFD after paying in just over 7k over 14 months. i lost my job, we defered payment for 3 months (aproved by them) but still no perm job....so its now failed.....

but of the 7k we have paid them £0 have gone to our credittors!!!:mad:

we have just spoke to cccs and given then the same figures as we gave DFD over 2 years ago......this cant be right!!!???

has anyone else had this happen??? has anyone tried to fight this....

we are now forced either to go into a DMP for the next 10 years or go bankrupt and prob lose our home.....

tigerfeet2006

The fees to the IVA co. always get to be paid first before anything else and £7k is pretty normal for fees. You should have been told the fees before signing anything.

Why do you think you will lose the house if you go BR? Is there any equity in the house?

Deep_In_Debt

Perhaps a dmp may have been better for you in the first place, so you could maybe try that for a while until you decide what to do. Not all dmps last the time that you are quoted - I was told that mine would take 9 years last year but have managed to reduce the term to just under 5 years. And they are much more flexible than an IVA.

Anyway, IVA's do cost a lot to set up and the first few payments will go to your IP before creditors see a penny of it - I'm surprised DFD didn't mention this to you or at least put it in their paperwork - although, admittedly, I'm not familiar with IVA paperwork.

You won't necessarily lose your home if you go BR - depends whether you are in negative equity and there are many other things that the OR will consider - depends on individual circumstances, I guess.

Sorry, not really helped much.

serenity34_2

brainy74 wrote: »

my wife and i have just failed an iva with DFD after paying in just over 7k over 14 months. i lost my job, we defered payment for 3 months (aproved by them) but still no perm job....so its now failed.....

but of the 7k we have paid them £0 have gone to our credittors!!!:mad:

we have just spoke to cccs and given then the same figures as we gave DFD over 2 years ago......this cant be right!!!???

has anyone else had this happen??? has anyone tried to fight this....
The other responses are correct in that lots of IPs will take their fees upfront in tis way. Some don't - they split the monthly payments between themselves and the creditors but DFD don't - very likely you will find this is covered in the agreement you signed. You would only really have grounds to complain if this wasn't the case or you feel you were missold the IVA.

we are now forced either to go into a DMP for the next 10 years or go bankrupt and prob lose our home.....
There isn't anything 'forcing' you to do anything. Depending on your exact circumstances ie level and type of debt, equity, surplus income etc you will have options. A DMP is one option, bankruptcy may be another ( but your home may be at risk depending on the equity ). There's nothing stopping you negotiating direct with creditors yourself ( in writing, of course ).

It all comes down to what you feel is the best option for YOU and your circumstances. You may well benefit from speaking to an impartial debt advice charity like National Debtline on 0808 808 4000 although I see you have already spoken to CCCS who are also free and impartial

Good luck!

Trollfever

but of the 7k we have paid them £0 have gone to our credittors!!!

But it does pay for the TV advertising!

Charco_2

If you have paid £7k into an IVA for 14 months then it unlikely that all this has been eaten up in fees.

My understanding is that, although an IVA can cost in the region of £7k (but it does depend on monies recovered), the fees agreed with your creditors are split into two sections.
1. Nominees - work carried out by your provider/IP to get your proposal to the creditors meeting (this should be in the region of £1,500 - £2,500)
2. Supervision - work yet to be carried out by your provider/IP over the course of your IVA Proposal for which your company gets something in the region of £500-700 a year

Fees average out around £4,500 actually for an IVA and your provider has a duty to disperse the excess to your creditors.

Two things to remember: Your contributions seem to be in the region of £500 per month so your IP's fees would perhaps be higher than the average BUT for fourteen months, your provider would have earned their nominees fee and two years supervision fees, so not the full cost of the IVA if it had run it's full five years.

Check your proposal and see what it says your IPs fees were going to be, work out how much that equates to until now and don't rest until the remainder has been dispersed to your creditors.

brainy74

Thanks for all the replys...internets been playing up so couldnt get on...

we have aprox 8-9k equity in the house and cccs seam to think that would mean loosing it.....

letters have been flying in from debt collectors this week so need to get the ball rolling on a dmp....etc....

we can enter into a new iva if i get a job but not until then....

will look at or original iva terms closely but still hurts to think 7k up against a wall.......

tigerfeet2006

CCCS at the moment seem to be looking on the black side of houses and BR with that little equity you most likely wouldn't lose the house.

First of all get 3 estate agents round and get a valuation for a quick sale as you need to move quickly for a job , this will give you a good idea if there is any equity in the current climate. If there is you will be able to negotiate with the OR for some one to buy the interest from the OR. It doesn't have to be straight away, you will have time to sort it out.

Pop over to the Bankruptcy board and have a chat with the guys there. Also have a quick chat with National Debtline as well.

geoffky

bet if you get a realistic valuation for your house to sell quickly..that 9k will and can disappear.....look more into it...

Nick700

Would also be a good idea to check that there are no additional reasons why bankruptcy would be a bad idea - for example if your employment will be affected by bankruptcy. A good leaflet on bankruptcy is available on the insolvency service website under publications.

I know you have had your fingers burnt once, but there is also nothing stopping you proposing another IVA, but I naturally understand your reluctance to do this.

If a DMP will take 10 years to repay your debts, and that is assuming all interest and charges will frozen, when they may not be, then I don't think this is an option, unless it is only for a few months, while you decide on whether bankruptcy or another IVA is the long-term solution to your financial situation.

Nick700

Another general point to make is that if you are on the verge of not affording your contribtions in an IVA, contact your IP who may be able to propose a reduced payment variation for you - and give you the chance to carry on with your IVA - it is a shame to allow your IVA just to fail if you have already paid into it for 2-3 years.

Nick