HELP!! IVA firm owe me!!

simple..life_2

ok long story short...

my partner had a loan then got into abit of financial problems and couldn’t keep up his payment and the financial problem got bigger, he went to citizens advice and they advised him to set up a IVA and so he did, he paid this for 3 year with no breaks or problems. just after 3 years he wanted to know how much he had paid off as he was paying around £400 a month to this company, so he asked but to his horror the outstanding balance was the same!! in the 3 year no YES no money had gone to the credit companies!! not sure how they get away with this but they did and we paid them over 10k :mad:

We have now been bankrupt since January this year as it was the best thing after talking to citizen advice again. we worked out that he had already paid more that 1/2 what was owed in the first place to the iva firm

"what i want to know is can i get that money back?
Is there some loop whole or small print i can look into
I don’t under stand how this can happen and force more people into bigger financial problems"


HELP ME PLEASE close this problem for good on a positive note!!

:A

Nargleblast

You need to read the terms and conditions of the agreement he signed up to. It should tell you at what point during the term of the IVA the creditors start getting some money. With the company I use it was from the 6th month onwards, but I understand with some IVA firms it can be up to 2 years or more before creditors get anything.

Nick700

Good afternoon,

An IVA is a legally binding arrangement where you usually pay a set sum for a period of time(usually 5 years) and at the end of that time, providing you have done this, then your unsecured debts are written off. In order to set up an IVA, you need the services of an Insolvency Practitioner(IP), who is a highly qualified, licensed person who will set up and administer your IVA for you.

It is normal practice that a good proportion of the IPs fees are taken first before a distribution is made to creditors, as the IP normally does a lot of work setting it up and presenting your IVA to creditors, before receiving their fee.

Even though you paid in for 3 years and nothing was distributed to your creditors, if you had paid in for another 2 years(assuming your IVA was for 5 years), then all your unsecured debts would have been written off.

The IVA is basically a contract, and as you signed it, then there is no legal right to you receiving the money back you have paid the IP firm. However, your IP firm should have explained their fees to you when setting up the IVA, to help you make an informed decision on what you were entering into. However, if you feel you were misled, initially speak to your IP firm explaining your grievances, and they should deal with your complaint. If you are not satisfied after this, then ask the IP for the name of their authorising body, and then contact them regarding it.

If the fees were never discussed with you, then by following up your grievance in the above manner, may lead to some form of redress.

Hope that helps.

Nick

Charco_2

Nick is right, if you had continued to pay the remainder of the IVA then the debts would have been written off, you probably panicked about this and made a hasty decision to end the IVA. Perhaps it wasn't explained to you properly how it worked.

The only thing to add to Nick's post is that while IP's fees are generally dealt with first from the contriubtions you make, this does not mean that all the money you paid so far was eaten up in fees.

The fees are broken down as follows
1. Nominees fees: a sum of around £1500 that the IP earns for researching your situation and drafting your proposal, then monitoring it as far as the creditors meeting where the proposal is agreed or rejected.

2. Supervisors fees: a sum of around £400 per year for monitoring your case and dispersing funds as and when they become available.

The figures may vary depending on the complexities of the case but these are in general terms. Have a look at your proposal and see what the fees were in it, think about how much you paid in until now and speak to your IP about the balance. Your IP probably already had a duty to disperse the excess to your creditors when you IVA failed so there would be nothing there but it's worth checking up!

thecableguy12

the good old cab have just given you more years of adverse credit, if you stuck to the iva you would have been debt free sooner and had less adverse date on your credit file because as from jan you will have to wait anouther six years

simple..life_2

Nick700 wrote: »

Good afternoon,

An IVA is a legally binding arrangement where you usually pay a set sum for a period of time(usually 5 years) and at the end of that time, providing you have done this, then your unsecured debts are written off. In order to set up an IVA, you need the services of an Insolvency Practitioner(IP), who is a highly qualified, licensed person who will set up and administer your IVA for you.

It is normal practice that a good proportion of the IPs fees are taken first before a distribution is made to creditors, as the IP normally does a lot of work setting it up and presenting your IVA to creditors, before receiving their fee.

Even though you paid in for 3 years and nothing was distributed to your creditors, if you had paid in for another 2 years(assuming your IVA was for 5 years), then all your unsecured debts would have been written off.

The IVA is basically a contract, and as you signed it, then there is no legal right to you receiving the money back you have paid the IP firm. However, your IP firm should have explained their fees to you when setting up the IVA, to help you make an informed decision on what you were entering into. However, if you feel you were misled, initially speak to your IP firm explaining your grievances, and they should deal with your complaint. If you are not satisfied after this, then ask the IP for the name of their authorising body, and then contact them regarding it.

If the fees were never discussed with you, then by following up your grievance in the above manner, may lead to some form of redress.

Hope that helps.

Nick

so i need to read the small print then, what are the chances ??
it dont look very good now

Nick700

Well....if the fees were discussed fully with you when you set up the IVA, then you knew the fees before you entered into the IVA and therefore, the IP has done nothing wrong.

You should maybe question the CAB's advice as they could have advised you to stay on the IVA for 2 more years and then be debt free, without the need to go bankrupt.

Nick

fnc6810

Just a quick question to everyone I would have thought that the yearly review taken by the IP would have detailed all funds Paid into the IVA and All funds that have been paid out of the IVA. This would have included all amounts paid to the IP and any staff he has used any payments to creditors, which I assume wouldn't have accepted the IVA unless they knew they were going to get a return yearly no matter how small of the % of funds that had been paid in. And it would also include the interest on the total sum in the IVA pot which should i think be in a deposit account in the clients name...One thing is for sure for what ever reason the IVA finishes either failure, completion a windfall and other reasons your IP will take his fees before you have had your first fart in the morning......that is for sure