first post ...early stages of iva

jumpinjilly

hello,

not sure if anyone can set my mind at ease . ive been reading this board for a few days.
my husband and i have amounted debts through loans and credit cards to around 40k, and have been keepin up with all the payments albeit minimal payments.
We had a call from the money group and endin up discussing these debts with an advisor who rang back later that eve to speak to my husband with reguard to our income and expenditure and came up with a figure of £240pm that we would have to pay back if taking out an iva...
We have supplied all paperwork to them to prove income and expenditure and utility bills etc, this was on thursday.
we have also been told that we will be paying them £60 per week for the first 2 months to cover their costs in sorting out the iva.
We have been advised to open up a new bank account which we have with barclays. we were perfectly honest and upfront about why we were opening a new account and the chap was brill , he said he would take down all the details and it would be assessed at the end and determine what type of account we could open and at the assessment our credit rating was excellent.
I am so worried now as we have been advised to stop all payments to our creditors, which we have by cancelling direct debits etc. i have also written them all a letter apologising for the state of our financial affairs and telling them what we are doing and giving them the contact details of our ip.

we have been told an iva can take anywhere from 4-12 weeks to set up.. so i am wondering what to expect in the interim.
sorry for wafflin on alot, i just cant stop worrying.

doelani

HI jumpinjilly

Welcome to IVA board, just a few questions.

Firstly have you signed anything ?
Have you spoke to one of the debt charities?
Do you own a house ?

Also you say you have debts of £40k and this company has come back with a figure of £240 which means you pay back £14.4k problem with that is IP fees can varie , mine where £8.7k for nomineee nad supervisor fees .

Sorry guys just does not add up. £480 will in no way cover the cost of setting up an IVA, are you sure it is not a DMP they have offered you ?

jumpinjilly

hello doelani,
thank you for your reply

we have only signed a document enabling the ip to act on our behalf with our creditors.

we have our own home bought in 2007 paid 150k for it, owe abt 143k and due to the down ward turn in the market it prob wouldnt have gone up in value.

we have been told that we will pay £60 for the first 8 weeks and then that a fee for their services would be included in the £240 that would be paid for the iva... i think lookin at our scribbled notes that it meant we would in fact be paying back about 21.9 in the £...

we have not signed anything else apart from a direct debit mandate for them to deduct their money .

we havent spoken to any other debt companies, i have filled out various things on line and i have read martins guide to IVA's and it would seem that this is the ideal thing for us.

the advise given over the phone was that an Iva would be most suitable:undecided

doelani

jumpinjilly wrote: »

the advise given over the phone was that an Iva would be most suitable:undecided

An IVA may be suitable but if this company contacted you I would be weary. Any advise I have every rad is not to pay any fees upfront which effecttivly you will be doing with the £60 a week.

You really should speak to one of the debt charities, they may tell you IVA is suitable as well but all fees will be including in money fees not paid upfront as far as I know.

I have had an IVA and we went though CCCS or Payplan cannot remember which as they passed us on to a local company as we are in northern ireland. All fees where included in monely fees, so if IVA had not been agreed we would have had no fees paid. The IP was pretty sure ours was going to be accepted and we paid 59p in £ .

Give one of the charities a ring and ask for some advice before you give this company any money

Charco_2

Doelani, I'd guess you went through the CCCS and they farmed you out to Grant Thornton as you are in Northern Ireland.

You are correct to advise that the origninal poster should NOT PAY ANY ADDITIONAL FEES! They should find a company that will set up a debt solution for free as they will be earning their fees as the solution progresses

However, your figures are waaaaaay out of sync with reality.

The average fees an IP earns for an IVA is about £4,500... certainly not the £10k you touted above there - no wonder IPs get such a bad name with some of the posters on here if those are the figures being bandied about... £4,500 for five years work is not an unreasonable figure, in fact it's quite low for a qualified professional but that's beside the point. A quick calculation of the figures involved here and i would guess the allowable fees for a case like this would come in at about £3,600 give or take a few pence!

Jumpin Jilly.... could you ask whoever this company is why they have calculated that you can only afford a figure of £240 per month and yet they would like to charge you £260 a month for the guts of three months before finally setting up your IVA?

£60 x 4.33 = £259.80
(there are just over 4 weeks in a month. To turn calculate a weekly figure as a monthly figure you multipply by 4.33)

That is just a small query... afterall, what's £20 between you and your new best friends!?

So back to the IVA you've been "offered". You'll pay in £14,400 as Doelani says, about £3600 in fees leaves just under £11,000 for your creditors which would I suppose work out at about 27p in the £ (so I assume your debt company is counting on slightly larger fees - which i doubt they'll get).

Sounds like a reasonable IVA if you ask me BUT...

The Money Group are not Insolvency Practitioners they are going to collect nice fees off you (at least £520) before referring you to another company who will provide a solution for you.

If you wish to enter an IVA, speak to a reputable company that will not charge you upfront fees. Why should the money group earn this money while you sit in limbo until they've decided to hand you the keys to magical mystery world of Narnia?

doelani

Charco wrote: »

Doelani, I'd guess you went through the CCCS and they farmed you out to Grant Thornton as you are in Northern Ireland.

You are correct to advise that the origninal poster should NOT PAY ANY ADDITIONAL FEES! They should find a company that will set up a debt solution for free as they will be earning their fees as the solution progresses

However, your figures are waaaaaay out of sync with reality.

The average fees an IP earns for an IVA is about £4,500... certainly not the £10k you touted above there - no wonder IPs get such a bad name with some of the posters on here if those are the figures being bandied about... £4,500 for five years work is not an unreasonable figure, in fact it's quite low for a qualified professional but that's beside the point. A quick calculation of the figures involved here and i would guess the allowable fees for a case like this would come in at about £3,600 give or take a few pence!

Jumpin Jilly.... could you ask whoever this company is why they have calculated that you can only afford a figure of £240 per month and yet they would like to charge you £260 a month for the guts of three months before finally setting up your IVA?

£60 x 4.33 = £259.80
(there are just over 4 weeks in a month. To turn calculate a weekly figure as a monthly figure you multipply by 4.33)

That is just a small query... afterall, what's £20 between you and your new best friends!?

So back to the IVA you've been "offered". You'll pay in £14,400 as Doelani says, about £3600 in fees leaves just under £11,000 for your creditors which would I suppose work out at about 27p in the £ (so I assume your debt company is counting on slightly larger fees - which i doubt they'll get).

Sounds like a reasonable IVA if you ask me BUT...

The Money Group are not Insolvency Practitioners they are going to collect nice fees off you (at least £520) before referring you to another company who will provide a solution for you.

If you wish to enter an IVA, speak to a reputable company that will not charge you upfront fees. Why should the money group earn this money while you sit in limbo until they've decided to hand you the keys to magical mystery world of Narnia?

HI Charco

I will stand corrected that the £10k was wrong, have just looked at my paperwork and mine was ££8.7k........£2.700 for Nomineee fees and £6000 forSupervisor fees.

Maybe GT do charge more than IP on the mainland but I did not complain about my fees, never had an issue with them

I do not post here to often as although I have completes and IVA do not think I am an authority on it so now that I feel well and truly told off will check info in furture before posting lol

jumpinjilly

thank u both for your replies... i am starting to feel really sick now and dont know what to do for the best..hence writing on here.

i am feeling rather stupid and naive now..

we have paid out £120 in initial fees already, so to gt the ball rolling. i have checked on the letter that i have recieved from the money group and also on their website and it says all very nicely that you pay the first two months upfront into your client acount and then that the rest of the fees will be taken out as i have already mentioned up above from any iva agrreement.

as my husband is the main bread winner it was he that had to agree initially to it all and obviously he has my support as we know that we have to address the issue that we have. but i have the horrible feeling now that we have obviously jumped 2 feet in without looking into something properly.

i dont know wether now to cancel any agreement of which we have a right to within 14 days when any initial fees will be returned and then to investigate further. As i said we have not been in arrears with anything prior to this.

thank you once again for your time x

Charco_2

Sorry Doelani, it's not my place to be telling people off, not my intentions either - oooops!

You were certainly correct to urge the OP to proceed with caution - and avoid companies that charge upfront fees!

If you have finished your IVA then I would assume that your IVA started more than five years ago and so your IPs fees woud have been agreed more than five years ago... times have changed! Fees are being slashed right left and centre by the credit houses in an attempt to drive IP firms out of business - banks don't like IVAs!

At the minute fees work out to be roughly the first five payments for nominees (so in this case £240 x 5 = £1,200) and then about 15% of other realisations for supervising the IVA for five years(£13,200 x .015 = £1980 plus VAT = £2,326) so a total of (1,200 + £2,326 = ) £3,526 give or take maybe £100 for other costs.

Sorry if I came across as abrupt!

The main message remains true though - JumpinJilly, avoid this company like the plague!

doelani

Charco wrote: »

Sorry Doelani, it's not my place to be telling people off, not my intentions either - oooops!

You were certainly correct to urge the OP to proceed with caution - and avoid companies that charge upfront fees!

If you have finished your IVA then I would assume that your IVA started more than five years ago and so your IPs fees woud have been agreed more than five years ago... times have changed! Fees are being slashed right left and centre by the credit houses in an attempt to drive IP firms out of business - banks don't like IVAs!

At the minute fees work out to be roughly the first five payments for nominees (so in this case £240 x 5 = £1,200) and then about 15% of other realisations for supervising the IVA for five years(£13,200 x .015 = £1980 plus VAT = £2,326) so a total of (1,200 + £2,326 = ) £3,526 give or take maybe £100 for other costs.

Sorry if I came across as abrupt!

The main message remains true though - JumpinJilly, avoid this company like the plague!

HI Charco

We started IVA in 2005 and finsihed it with F&F in 2008. For us it was the best thing we could have done for a number of reason and I would never be one of the " IVA's are evil " brigade lol

Slightly off target for a sec but you got me courious and got paperwork out, with nominee , supervisor, vat, registering iva , expences etc we did pay £10,600 . BUt our IVA was for £110k so probally added to fees.

now back to OP


as Charco says avoid this company, YOU should go to a company or let them tout for business. make that call today to a Debt Charity and check out other options. IVA do work for some people and it may be right for you but I have read a lot of posts here and elsewhere where people have been told they will pay £xxx a month then when it gets to creditors meeting it is more, it needs to be a realistic figure.

Hope you get sorted out.