Is this right? Cannot enter IVA

continualdiamond

We are with payplan and in a DMP.

Been looking into whether an IVA is more suitable for us and have contacted payplan about it, who have replied and told us we cannot enter into an IVA as our individual debt only = about £11,000 each and each person needs needs a minimum of £12650 and that an IVA cannot be paid back in less than 6.5 years and that they're predicting we'd have our debt paid off in 4.8 years.

Is all this correct?

Charco_2

Needs a minumum £12,650?

First time I've ever heard that!

Not sure I understand the 6.5 years thing either!

MBNA have a criteria that if it would take less than 10 years to clear your debt in a DMP then they won't accept and IVA - but that only matters if they're one of your creditors with more than 25% of your debt. It doesn't take into account that interest and charges might not be stopped either!

Does the 4.8 yeasr take into account the fact that interest and charges could accrue over the course of your DMP?

I'm not sure it matters much to Payplan either way since if they put you into an IVA they would receive roughly the same in fees as they will get in a DMP. If you want a second opinion try contacting another IP. The fact that your debts are about £11k each is neither here nor there. If you're insolvent, you're insolvent (ie - if your creditors are demanding more eacxh month than you can afford to pay - without resorting to credit cards - then you're technically insolvent)

continualdiamond

Where does payplan get fees from though? I just pay what my monthly cost is and it goes to all creditors, none to them...

I would of thought that no the 4.8 years does not take into account interest etc as all remaining debt amounts are estimates and based on the fact that no one is charging interest.

I know LLoydstsb are as trying to get them to stop etc.

debtinfo

pay plan take their fees from what you pay i think. There are no rules saying you cannot go into an IVA with your circumstances, it will just be the policy of the particular company. As charco says try other companys.

continualdiamond

I have done, got someone ringing me tomorrow at 6pm.

Just would of thought it would be so much easier to stay with the company I am rather than having to re tell everything i did to payplan when i set up the DMP.

Oh well, see what this company has to say tomorrow. Baffled by payplans reply though, but wondered if what they said was right like with amounts etc.

mjm3346

debtinfo wrote: »

pay plan take their fees from what you pay i think. There are no rules saying you cannot go into an IVA with your circumstances, it will just be the policy of the particular company. As charco says try other companys.

Payplan like CCCS do not charge fees.

mjm3346

There is an MSE guide to IVA's

http://images2.moneysavingexpert.com/attachment/ivaGuide.pdf

and one from the insolvency service

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/indebt-web.pdf


Normally 15k is the minimum that will be considered because of the fees charged but it is up to the companies you owe to decide if they will accept it (75% by value have to agree to it) or not.
5 years repayments is normal (but it can vary) for an IVA and your assets (property) could form part of it to be sold in the final year.
An IVA would involve some of the debt being written off, I suspect your payments are basically too high and the companies are quite happy to keep accepting the payments as they are.

debtinfo

mjm3346 wrote: »

Payplan like CCCS do not charge fees.

quite correct, just looked at their site

continualdiamond

I was going to say I would like to know where payplan get fees from then cos I see my total monthly amount go to all my creditors.

Person I spoke with today confirmed what someone said earlier, £15,000 each person before an IVA is considered.

Ours is estimated at about £18,000 between us now, after having orginally been £23,000 between us 3 years ago.

Some creditors are not happy with what they're receiving though as we increased our repayment in Feb this year and some have refused the offer of repayment, which baffles me cos they're getting more than they were happy with before.

Oh well, at least I know i am doing the best thing being in a DMP, was worth looking into to make sure we were heading in the right direction.

happychappy74

You are quite right (and wrong)........

Payplan do not charge fees to you for their services as all fees are taken from the monthly repayment structure. This is not a critical observation, but having recently finished an IVA I was quite surprised how much money is eaten by Payplan (but no worse than others I understand).

Not that I expected any different, business is business after all. I found them open and very helpful along the way. At least you know where you stand from the onset...........i.e. you wont get any surprise fees or charges along the way.

Likewise, should you become in a position to enter a full and final offer it is amazing how much that costs (which if at the right time can only influence any acceptance).

I was HEAVILY (cant stress that enough) in debt owing to the family courts, but that didnt stop some companies saying 'No' to the proposal, so it does make me wonder if they just flip a coin (but could just be cynical of course).

:j

Choo_Choo_4

mjm3346 wrote: »

Payplan like CCCS do not charge fees.

:wall: - say that enough times and we might believe it!

Continual - I'm presuming that you are in a joint DMP and would be considering a joint IVA to take in all debts ...

The £15k min debt level is strictly speaking a guideline but not set in stone - circumstances are never the same from one person to the next and IVAs are done with debt levels less than £15k so no harm in looking into proposing an IVA with the £18k between you (at the end of the day you'll be no worse off)

You also mentioned earlier that Payplan advised you that an IVA cannot be paid in less than 6.5 years??????

Now this IS a nonsense - MOST IVAs last for 5 years, some being extended by a further year if there is equity to be addressed but not through remortgage - but there are lots of people in IVAs who do not own a property therefore the extra year doesn't come into it - not to mention ONE-OFF IVA's whereby a settlement is reached by way of a one-off payment and might only remain open for 6months - 1 year ...

How did you get on last night with the other company?