IVA's - What a Rip-off!

villabadger

Just recently discovered that my brother got himself lumbered with an IVA and I can't believe the costs associated with it!

Briefly, he had £30k of debts and agreed an IVA monthly payment of £525 which would settle the outstanding amount after 60 months. However, the costs of the IP are ridiculous - I'm in the wrong industry! The fee for the Nominee is £2.7K +VAT and the fee for the Supervisor over the term of the IVA is a maximum of £6k +VAT. AND the Nominee and Supervisor are the same person! What a con! Also guess how much has been listed as to be repaid during year 4?............Yep......£10k How the hell do the courts sanction this type of process when the people being kicked are already on their backsides?

Anyway, rant over. Many of you are probably already aware of this but for those of you who still have a choice, please speak to the free helplines before the leeches get hold of you!

The main reason for this post is that he has now been contacted by another leech (?) offering him the chance to go bankrupt for £1.5k with all debts cleared in 6 months - is this real? Any other surprises he could look forward to? I am getting him to speak to the free help first but can anyone offer some advice on here?

Thanks for your time.

crowman19

villabadger wrote: »

The main reason for this post is that he has now been contacted by another leech (?) offering him the chance to go bankrupt for £1.5k with all debts cleared in 6 months - is this real? Any other surprises he could look forward to? I am getting him to speak to the free help first but can anyone offer some advice on here?

He should call one of the debt charities which are listed in the stickies at the top of the forum listings. They will offer the best advice/

He can pay £510 and go BR himself with the debts cleared just the same as the company trying to charge £1.5k. The debts go into the hands of the OR when declared BR who deals with all the creditors and are cleared after 12 months on AD.

Tell him not to touch any company offering to take his money to help him go BR.

So_Sad_Angel

villabadger wrote: »

The main reason for this post is that he has now been contacted by another leech (?) offering him the chance to go bankrupt for £1.5k with all debts cleared in 6 months - is this real? Any other surprises he could look forward to? I am getting him to speak to the free help first but can anyone offer some advice on here?

Thanks for your time.

The true cost of applying for bankruptcy is £510. (this is the court cost which is reduced further if on certain benefits) The forms can be completed either by one of the debt charities ( at no cost!) or by the person going bankrupt.

There should be no reason to fall into the trap of any third party charging extortionate rates to `help` anyone to go BR.

I hope your brother gets the advice he needs asap. I can`t comment on IVAs as I have not done one but I gather the costs are very high as you say....best to be aware.

Anyone considering either route must learn as much as they can in order to make an `informed` decision.

Angiexx

Trying2StopBuying

Hi I have a DM plan but recently asked for a breakdown of how long it would take me to repay my debt of around £20,000 I'm looking at 12 years - I literally cried when I read this but don't want to destroy my credit rating any further and part of my DM involves a relative as they took a loan out in their name for me (originally to pay off debts) and I also do not want to make things any worse for them either. I'm genuinely trying to think of how to get rid of this as I know it is through my own doing but 12 years is just unthinkable?

property.advert

Trying2StopBuying wrote: »

Hi I have a DM plan but recently asked for a breakdown of how long it would take me to repay my debt of around £20,000 I'm looking at 12 years - I literally cried when I read this but don't want to destroy my credit rating any further and part of my DM involves a relative as they took a loan out in their name for me (originally to pay off debts) and I also do not want to make things any worse for them either. I'm genuinely trying to think of how to get rid of this as I know it is through my own doing but 12 years is just unthinkable?

12 years ? I'd go mad. If you've non interest accumulating, then you're only paying £1,667 a year off the debt or £138.89 a month off it. How much are you handing over each month ?

villabadger

Thankyou for your replies.

I have a few more questions on IVA's............

Is the IVA Supervisor supposed to issue an annual statement/report to inform you of the amounts still owed to each creditor at that point in time? If not, can you request it and is the Supervisor obliged to supply it?

If, for whatever reason, you default on the agreed IVA payments what happens? Can another IVA be agreed?

Thanks again.

villabadger

Hi,

I'd be grateful for any contributions regarding my questions.

Thanks.

CLAPTON

your post is not entirely clear

you say your brother is paying £525 per month for debts of 30k and paying for 5 years

you mention the level of fees... are these additional to the 525 or included.
if they are included why are you concerned?

could you explain year 4 a bit more clearly

does your brother own his own property?
does he have to remortgage in year 4 ?

If he defaults on the IVA then the IP can make him bankrupt
a second IVA is unlikely to be agreed.

Paulgonnabedebtfree

Trying2StopBuying wrote: »

Hi I have a DM plan but recently asked for a breakdown of how long it would take me to repay my debt of around £20,000 I'm looking at 12 years - I literally cried when I read this but don't want to destroy my credit rating any further and part of my DM involves a relative as they took a loan out in their name for me (originally to pay off debts) and I also do not want to make things any worse for them either. I'm genuinely trying to think of how to get rid of this as I know it is through my own doing but 12 years is just unthinkable?

Although it isn't appropriate in all situations, going BR can get you off the treadmill much sooner than 12 years. It seems a bit daft really. Someone on a DMP is making an effort to repay the debts (albeit hopefully without interest and charges). However, someone who goes BR has presumably given up hope of being able to repay (apart from any order made during the BR period). The system seems to encourage BR rather than to encourage someone to try to repay slowly over time.
It seems that you start comingf off any naughty boy/girl list about 6 years after completing what you need to do. In your case that would be about 18 years away whereas, if you went BR, it would probably be around 7.
Of course BR is sometimes a bad option if a homeowner with equity or if working in certain financial fields, politics, or police (and possibly some others).

doelani

villabadger wrote: »

Just recently discovered that my brother got himself lumbered with an IVA and I can't believe the costs associated with it!

Briefly, he had £30k of debts and agreed an IVA monthly payment of £525 which would settle the outstanding amount after 60 months. However, the costs of the IP are ridiculous - I'm in the wrong industry! The fee for the Nominee is £2.7K +VAT and the fee for the Supervisor over the term of the IVA is a maximum of £6k +VAT. AND the Nominee and Supervisor are the same person! What a con! Also guess how much has been listed as to be repaid during year 4?............Yep......£10k How the hell do the courts sanction this type of process when the people being kicked are already on their backsides?

Anyway, rant over. Many of you are probably already aware of this but for those of you who still have a choice, please speak to the free helplines before the leeches get hold of you!

The main reason for this post is that he has now been contacted by another leech (?) offering him the chance to go bankrupt for £1.5k with all debts cleared in 6 months - is this real? Any other surprises he could look forward to? I am getting him to speak to the free help first but can anyone offer some advice on here?

Thanks for your time.

Hi Villabadger


A lot of these IVA companies do not care if an IVA is right for you or not, does your brother own a house? would he lose his job if he went bankrupt?

I know you are angry but costs for iVA would have been explained to your brother before he signed for it. The first few year any money paid usually got pay moninee fees and it is not unusual for the creditors not to get any money for a few years. The important figure is what will be paid at end of IVA which in your brothers case is £21.5k after fees.

The costs you listed for nominee and supervisor fees is about normal, why is it a con the same person doing both jobs? This is normal practice for same companie to deal with it from start to finish.

Did your brother take free advice before entering IVA, even if he had and they recommended and IVA he would still be paying the fees mentioned if he had still entered an IVA.

If he stops the IVA I do not think he can have another and any money he has already paid will not be returned to him as it will go on fees and if anything left will be distributed to creditors. Is there a bankrupty clause in his agreement?


IVA do work for a small amount of people, me included. I went to CCCS and Payplan and bother reccommended IVA and put me in touch with the IP who dealt with it . We knew form first meeting with them what the fees where and how much creditors would be getting. We also knew they would not be getting a dividend for a few years.

Each year a review was done and a " statement " sent to us with the anual report saying how much we had paid, any charges taken, nonimee fees, court fees to set it up, supervisor fees split between the 5 years , interest earned on the money we paid etc We never had a complaint about how it was handled and at no time did we feel we were ripped off or conned.

If your brother was badly advised and bankrupty was better suited he may have cause for complaint but it was his choice to enter IVA and agree tot eh fees.

Radiantsoul

villabadger wrote: »

Thankyou for your replies.

I have a few more questions on IVA's............

Is the IVA Supervisor supposed to issue an annual statement/report to inform you of the amounts still owed to each creditor at that point in time? If not, can you request it and is the Supervisor obliged to supply it?

If, for whatever reason, you default on the agreed IVA payments what happens? Can another IVA be agreed?

Thanks again.

The Supervisor is supposed to produce statements as per the IVA agreement which will normally be yearly. But technically it is not the concern of the debtor, but the creditors. I am sure they will supply one if asked though.

The supervisor will hold some of the fund collected to cover the cost of bankruptcy. In the event of a default they will try and keep the IVA going, but if that fails they will use the funds to petition for bankruptcy. So you can renegotiate an IVA, but the supervisor will need to get agreement from the creditors(generally a few missed payments ought to be fine if they are made up later).