iva and payplan

debtiva

Hi,

Well i am in a huge mess £72000 in debt and have spoken to payplan and cccs both have come up with iva solution.

Just wanted to know if anyone else has used payplan as they were so much more more supportive on the phone i am due to see them face to face this week and wanted to know if anyone else recommends them?

thanks

debtinfo

Well in my experience payplan are fairly good, but i also think that it is usually best in matters such as this to sign up with someone other than the person giving the advice or at least get a couple of quotes from someone else first

Charco_2

Not a fan of Payplan... one reason I would avoid them for an IVA is their ridiculous fees in the instance where you might be able to raise a lump sum for a one off payment.

Fees are one thing, you are asking a qualified professional to take care of your finances after all and so any company you go to needs to charge fees. However if you inherited for example £90,000 after only one year of your IVA, you would be required to pay off the full total of your debts plus interest and plus the fees your IVA would have accrued... all perfectly reasonable. I have read that Payplan however have excessive fees (25%???) on top of those... should you be so fortunate as to suddenly have a large sum of money! These extra fees are not common to all IVAs!

I know you may think it unlikely that you'll inherit or win a huge sum of money, but why take the risk?

I'll openly admit i dont like Payplan, simply because of the greed they show when dealing with people in debt - so much for charity! You should go with a company you trust and feel comfortable with, you'll have to deal with them for five years - i would just hope it's not Payplan!

bridgethelanger

I can see why charco may not be a fan of PP. I started with them just under 3 months ago. There initial fees in a proposal were over £5k and my creditors wanted the fees capping. They make me laugh because the first person I sopke to reminded me that they were funded by the industry I was didn't realise they charged large fees, however they charge alot less than others I had contacted.

debtinfo

Is that just hearsay charco, or have you got a copy of the terms and conditions saying that

Charco_2

Im also making a difference between ordinary fees though and those excessive fees that will directly hit the debtor in his pocket.

It's quite normal for an IP to charge fees of around £5,000. (£2,000 nominees fee and £600 per year supervision fees) But these fees are agreed with the creditors and come out of the agreed pot you are paying your creditors with. It's not a new separate bill. If you pay in £20,000 over the course of five years it doesn't matter if your IP's fees are £5,000 £8,000 or £15,000 it's between your creditors and IP how they divide it up.

However there are fees which will directly hit you in your pocket and these fees are unfair and should be avoided.

Upfront fees - B&E (and others) charge these fees but there are enough companies that dont so these fees are easily avoided! You pay 62 months instead of 60 and the first two payments go directly to your IP's company... WHY????

Completion fees - I have seen recent complaints about this (and only in Payplan IVAs). If you inherited a large sum of money and could pay off your debts in full so £72k plus interest plus IP fees brings that to say £82,000 (72,000 x 1.08 interest = about £77,000 plus £5k fees = £82,000) and then they charge 25% plus VAT (only IVAs completed in full payment of the debts) which brings the total repayment to £107,000+

debtiva

Payplan have said there are only two companys in the uk that don't charge fees , they are one of them and the other is cccs.
I asked if i took out the iva would i be charged a fee and they said no, they said they get funded by the creditors.
This is all new to me i have always paid my debt never been behind, i have just now borrowed too much and its spiraled by me borrowing more to pay off debt, i now just can't afford to pay anyone this month at all so this is my only solution unless i get in a dmp for 15 years
don't know what to do for the best as i just don't want debt collectors at my door , i just want this sorted asap.
they have said 6-8 weeks to set up an iva.

What a cccs are they better?? they were'nt full of confidence over the phone i must say where as payplan were great.
i just don't want to be stuffed anymore, i have children a huge mortgage so can;'t remorgage .
Please help with what company is the best , payplan or cccs

FoggyBrain_2

Funded by the creditors isn't strictly correct. Their fees are deducted from the agreed payments you make to creditors, so they aren't actually costing you more, but the money is still being paid by you in the first place ---- they are being a bit creative with their wording.

Have a word with a few others, see who you feel comfortable with -- after all you are entering into a five year relationship with your IP. Also read around this forum for others experiences.

My IVA, assuming my proposal is accepted on Friday, has taken 5 weeks from the first contact.

debtiva

5 weeks, that is good.

i am about to miss payments to all my creditors for the first time this month, will they start issuing ccjs, baliffs etc before i have a chance to set up an iva?
Also some of my debt is quite new the catalogue i have had for 3 years but have ordered xmas presents from it 2 weeks ago as i was able to pay then but not now.

Charco_2

Try not to panic and rush yourself. I totally agree with your that a DMP would be an unsuitable solution... 15 years PLUS INTEREST AND CHARGES!

FoggyBrain is correct in what he says about the creative wording of their pitch, you do pay the creditors and you do pay the IP - it's just that it comes from the same pot and is not a separate bill. The regulators would be interested to know Payplan were phrasing that way! However they have also misled you into thinking that there are only two companies in the UK that dont charge fees.

THERE ARE ONLY NO COMPANIES IN THE UK THAT DO NOT CHARGE FEES FOR IVAs!

Payplan and CCCS enjoy a pseudo-charity status where their DMPs are different to everyone else's. In a DMP with another company you would pay your monthly contribution and they would retain something like 15% as their fee for carrying out the work. PayPlan and CCCS do the same job but they give the full amount to the creditors who then pay them back a fair share contribution... about 15% I think! See the significant difference!?

However, DMPs are unregulated where as IVAs are highly regulated. A DMP can be whatever the company says it is. An IVA has to follow the rules and so CCCS do not do IVAs, the CCCSVA do IVAs! They are not part of the "charity". They earn their money in exactly the same way as any other IP - ie they nominate the case and they supervise it and they agree fees with your creditors as a share of the pot that you pay into for 60 months.

FoggyBrain_2

debtiva wrote: »

5 weeks, that is good.

i am about to miss payments to all my creditors for the first time this month, will they start issuing ccjs, baliffs etc before i have a chance to set up an iva?
Also some of my debt is quite new the catalogue i have had for 3 years but have ordered xmas presents from it 2 weeks ago as i was able to pay then but not now.

My experience, which is by no means the norm, was that my creditors phoned once they realise there was a missed payment. However, as soon as I said I was proposing an IVA they each put a hold on calls until the peoposal went through. It would take much longer for them to get ccj's and bailiffs organised.

Don't be panicked into anything, but do try to keep things moving once you have decided on a course of action.