IVA IP costs £360 is this normal?

Dodo_Donna

Hi,
I am considering using Churchwood for an IVA. I know that I am elible and I have considered all other options. The financial advisor has said that I will need to pay £360 which is non refundable for the proposal once I have filled out all paperwork etc. But he told me to cancel all my direct debits to my creditors starting this month and that I should then use that money then to pay the £360. Does that sound normal? It seems a bit wrong to cancel my payments to the creditors and quite risky in case something went wrong!

This is such a big scarey step for me I would really appreciate some advise although thanks to everyone who replied to my previous post as it was all really helpful.

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System

Hi,

No, this isnt normal. Most IVA companies will claim their 'fee' from the creditors direct and not from you. There are enough companies who offer a free service without paying £360. Your right to suspect this company, i would move on. If you are unsure who to use try CCCS, they are a debt charity and will offer you impartial advice.

Charco_2

I posted something about this recently (I didn't know that Churchwood were now charging an extra up front fee but there are other companies out there who are).

Your IP earns fees in two ways
1. Nominees - work carried out in producing an IVA for you and taking it through creditors meeting for acceptance.
2. Supervisors - your IP is then paid a small amount each year to monitor the IVA for the duration to make sure the client complies with all that they've agreed to.

The banks, your creditors, have been making it more and more difficult for IPs for earn their money and so some insolvency providers have been supplementing their income by taking in an extra payment in advance of the IVA - effectively turning a 60month IVA into a 61 month IVA... except you've paid month 1 before you know if your case has been accepted!

I'm not agreeing with what the companies are doing (our company doesn't do it), but i can see why they are doing it and why some companies feel forced to.

As the previous poster said, there are some companies out there who will provide an IVA without this extra payment but it's up to you whether you want to walk away from Churchwood and start the process again... it will take about a month for another company to put a creditors meeting in place for you!

As regards cancelling your payments to your creditors, this is perfectly normal - although not to pay your IP. All IPs will advise this at some stage of the process when it looks like you've reached a point of no return on your IVA.

Good luck

timberflake

I went into my IVA in 2005 and at the time, I was told to cancel all my DD to cover the £700 IP fee. My creditors would ring on a daily basis, but I just referred them to my IP. After 6 months, my proposal was completed and all contact stopped so it doesn't sound strange to me.

The only risk you run is your proposal being rejected and defaulting on your payments.

Charco_2

I'm glad that worked out for you Timberflake, it's nice to see people on here with something nice to say about the seervice provided by IPs

(but that's not technically how it's supposed to work)

Dodo_Donna

Thanks for all your advise!

I heard about the CCCS on this sites forum and so I phoned them today.
They said that the fees sounded normal to them.
Some companies arrange their fees that way now apparenty. And as I have already done some extensive number crunching with these guys I think that I am going to stick with it. Especially as I have been advised to cancel this months direct debits to the creditors then I will use that money to pay the IP and won't be out of pocket.....unless it all goes very wrong and my IVA gets turned down!!!! Which is the next great fear for me!

I got the paperwork through today and Churchwood uses a sister company called Kingsgate Insolvency for the IVA's. So it is them I am actually dealing with. I found them really helpful so far but I will keep you all posted on how it all goes with them!!

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timberflake

This is exactely how my IVA was arranged so I would say its standard practice, however, do bare in mind what you plan on doing if your proposal is turned down. Its in your best interests to give your creditors the best return possible and thus stand a better chance of it being accepted.

A word of advice, brace yourself for the influx of phone calls your going to receive once creditors realise they haven't received any money. Even though they will threaten sending people over, putting you in default etc, simply tell them to contact your IP. They will do anything to get money out of you before you go into the IVA and some will even ignore your comment about going to the IVA and still contact you. Just stay strong and the calls will evntually stop.

If you need any further advise, I'm happy for you to PM me.

Dodo_Donna

Thanks Timberflake!

I have already had numerous calls as a payment bounced last month!
Not looking forward to the onset of 4 companies harrassing me!! But I know I got to try to take some action as I have been treading water and getting nowhere for a very long time!!

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