2 IVA options - huge difference in proposed monthly payments - help !!

thinkpositive1

I am hoping someone may be able to advise me on this conundrum:

I am on a DMP and am currently looking at an IVA option. I have had discussions with 2 companies and provided the same details (inc and exp) to both and they have arrived at wildly differing advice and not sure what to do.

Company A:
Straight off they said I was a "classic case" of someone eligible for an IVA and have advised on a figure of approx £300 as the monthly sum I would need to pay.

The only 2 factors that have made me a little wary of them are that they charge 2 monthly payments "up front" before the IVA commences and that some (actually quite a lot of) feedback on them posted on iva.com does not provide heartening reading, which is the reason I have also checked things over with another firm.

That said they have been entirely helpful and professional with me so far.

Company B:
This company has come highly recommended and one of the best rated for customer feedback and does not charge up front fees.

They have calculated my monthly payment would be at least £550, possibly nearer to £600 and they seem a little reticent now to take my case further forward.

They say this is for 2 main reasons:
1) my income for a single person is deemed "quite high" and that creditors may well decline an IVA on the basis they would rather sit things out and get all the debts paid back over time (albeit my DMP will take eons to clear), and

2) a big chunk of my debt (approx 28%) is with Lloyds TSB who are apparently harder to convince than other creditors.

In other words it seems that Company B (the one with no upfront fress and highly respected) think I may not have a strong case and even if I do, then it will cost me a LOT MORE than the proposal from Company A.

I don't wish to be too cynical but as they are based on the same Inc / Exp figures, would it be the case that Company A are making me an attractive but unrealistic "offer" (re: monthly payments suggested) to get me to go with them and pay up 2 x monthly payments knowing it may well fail?

If the difference between the 2 companies was £50 or maybe even £100 I would not mind so much. But as the more cautious company is looking at something that will cost me almost twice as much (although they are not convinced even that will get accepted) then I really need to take stock.

Any help gratefully received.

Thanks

Charco_2

I would imagine company A will put forward your IVA and it will be hit with a huge uplift at creditors meeting.... (basically, your creditors will look at your I&E and say £250 for food and toiletries? cut that by £50! Cant keep paying Gym subscription. Champagne allowance is cut!)

The guidelines used by all the companies is the same so there should not be such a difference. What have company A included that company B did not?

althas

ANYONE who asks for an upfront fee to even look at and do a proposal, in my humble oppinion, are a bunch of COWBOYS. They are the Arthur Daley of the time, promise the world, sound slick and helpful, make a VERY attractive offer you pay the fee then they will screw you over totally. Sorry if I sound a little negative, but I despise companies who do this, especially to people who are in a vulnerable place like this

SO on that basis company A should be forgotten about

Are the ratings you talk about from www.iva.com? If so, then I would trust them for accuracy. I found my IP from that site and never regretted using them for one moment. If not, then visit that site and select 2 or 3 good IPs and ring them all for a chat

A good and propper IP will look at the income and outgoings, and draw up a proposal based on acceptable and reasonable monthly allowances. They will not expect you to eat own brand baked beans for the next 5 years, but nor will they allow harrods baked beans every day. There are industry guidelines for monthly allowances, and that is what they will use as creditors generally accept them

But talk to 2 or 3 and see what they say. The vast majority of my debt was with Lloyds TSB, and they voted yes for me. But be guided by the IP, they have a very good idea how creditors vote in a given situation

Good luck in your choice, and let us know what happens for you

Charco_2

Yeah, got thinking there, Company A is likely to not actually be the Insolvency Practitioners you will eventually be dealing with. Company A will collect their two fees before referring you onto their sister company. Company A seem to be promising the moon on a stick but wont actually have to provide you with it when it comes to the crunch because you'll be dealing with your IVA with Company A1. By which stage you'll have already paid £600 and they will likely have to tell you that your contributions will actually be raised to somewhere to what company B was suggesting.

To make these upfront payments you'll have had to cancel your DMP, the phonecalls and letters will have started and you'll be in a worse off position.

Have to say, your post would seem to be a good advert for Company B. They are not making huge promises simply to get you in the door and collect fees. They are being fair to both you and your creditors.

The other thing is though if you do have expenses that are outside the guidelines then you can certainly put a case forward for them to be included.

Choo_Choo_4

I would have to agree that Company A do not seem to be an option at all ... why would you pay £600 to someone who will wipe their hands off you the minute they've got their money?! Not very ethical but unfortunately these are the companies who make the industry look bad ...

Would do no harm to speak with a 3rd company and see how close their figures are to Company B!

This is your proposal and should be based on what you can afford (so basically you shouldn't be left with £200-300 surplus each month but at the same time you shouldn't be struggling to meet the IVA payment each month) - it really has to be affordable and a solution that makes you feel better off.

I'm not so sure about Lloyds being a sticking plaster though?

Definitely speak with another company and compare but I would say Company A (or indeed anyone charging up-front fees) are a NO!

thinkpositive1

Thanks all of you - it was some of you who pointed me in the direction of iva.com for checking out others and saying I should avoid any that charge up front payments.

I have in the meantime gone back to Company A to ask them about the figure they arrived at and for some reason they have used a lower income figure than the one I provided which would account for the difference between the 2 companies' proposed payment sums!

I am not impressed as they set me off working out my own real budget and how it would work under an IVA, thinking this was an "affordable" option but as it seems they miscalculated and Company B's figures were more realistic then I have a problem as that amount every month for 5 years is going to be a huge challenge to fund.

Whilst i want to get the debts paid off in the best way ASAP, my DMP is much lower at the moment and without any luxuries. The additional amount I may need to find for an IVA payment schedule is frightening.

Think I will take your collective advice and get a third opinion too.

Cheers

Choo_Choo_4

You could also go back to Company B and express your anxieties - tell them that you feel the monthly payment that they are proposing would be a struggle for you - see how they have reached this amount and if there are areas that you feel are understimated or could be reevaluated.

If you think that they have been fair and realistic in their advice then they should be willing to see if there is any room for movement on the Income & Expenditure they're currently working off.

Charco_2

All companies will be working with the same guidelines