IVA support and discussion thread

National_Debtline

Thanks for that, really useful!

- David.

whoops666

Wonder if someone could help me as i am becoming very upset.
In august 2011 i started my iva. agreed amount £16000. Original debt was £31200. I received a substantial ppi payout which i payed into the iva with what i have already paid this left me about £6300, to pay. However i let the iva company know that my mum had left me money. (not knowing the consequences of that one). i thought i would be honest. Now iva company say i owe them another £33,400 for interest and fees. I honestly don't mind paying some of this but this figures seems huge. I have spent £2000 of my inheretence but only because i didn't think it would be this much. I do realise with hindsight that i shouldnt have done this. Are these fees normal? Im worried sick as this is going to probably take 3 - 4 months to sort out.

UpToMyNeckInIt

whoops666 wrote: »

Wonder if someone could help me as i am becoming very upset.
In august 2011 i started my iva. agreed amount £16000. Original debt was £31200. I received a substantial ppi payout which i payed into the iva with what i have already paid this left me about £6300, to pay. However i let the iva company know that my mum had left me money. (not knowing the consequences of that one). i thought i would be honest. Now iva company say i owe them another £33,400 for interest and fees. I honestly don't mind paying some of this but this figures seems huge. I have spent £2000 of my inheretence but only because i didn't think it would be this much. I do realise with hindsight that i shouldnt have done this. Are these fees normal? Im worried sick as this is going to probably take 3 - 4 months to sort out.

A similar issue to yours was posted here:

http://www.iva.co.uk/forum/topic.asp?whichpage=1&TOPIC_ID=62363&#545990

Good advice there from a reputeable IP.

Those figures you quote are WAY off. Either your IVA case worker hasn't got a clue (very possible), and/or you have misread something.

IP fees do 'vary', but even so, anything in the £3,000-£6,000 range should more than cover it.

Ask your IP (your actual IP, not a 'case worker', 'relationship manager' or whatever the staff at your IVA firm call themselves), for an itemised calculation, to include dividend paid to date, and go from there.

Please remember though, that you undertake to repay as much of your original debt as possible + IP fees, over and above your agreed minimum dividend. Thus any extra 'windfalls' etc go into the IVA pot, with your IP taking their 15% for 'additional realisations'.

Even so, in your case, someone at your IVA firm must be on crack if they think you owe that much!!!

Hope you resolve this soon, and do let us know how you get on.

City1

Hi,






Spoke to SC this morning for an hour, went over all our expenses with a fine tooth comb (which was nice). At the end of the call the advisor recommended that we go on an IVA. Our situation means that it will take us 13 years to pay off our creditors (assuming that no interest is added). On the face of it an IVA appears to be a far better option as we will only paying the same amount for 6 years. However, I know that life isn't that easy (or is it?).


I have a number of questions:

• How much do IVA's tend to charge and how do they charge, as it is not possible to a fee upfront.
• What happens in 5 years, where there is a requirement to release any equity in our houses - we have two, one which we rent. Both houses are on interest only mortgages. I read somewhere that this does not need to happen and is not often the case. This is one area where we are worried.
• SC recommended their IVA provider, I am always sceptical on this. Could anybody point me to or know of any reputable IVA's that genuinely help people in our situation and not possibly work on their own agenda (profit). I have a business so I understand business's need to make profit.
• My wife and I both have are own business (Ltd Co), as such we are expecting our salaries/dividends increase in the next few years. What impact would this have on us?

These are only a few questions, I am sure more may follow.


Any help/advice is appreciated.

UpToMyNeckInIt

Hi City1,

Refreshing to hear Stepchange quite sensibly recommending an IVA (they thought a 15-20 Year DMP was my best option - suffice to say, I ignored their advice).

You are right to be aware: Stepchange will likely refer your IVA to Grant Thornton. (Just google 'Grant Thornton Complaints' or have a look at some of the other forum posts here to see why that may not be in your best interests). They are very competent etc. I'm sure (most of the problems seem to be associated with delays in closing the IVA, associated with reclaiming PPI). But with only a handful of IP's to cover their 20,000+ customer portfolio (nearly half the IVA market basically), one-to-one customer service is probably not their strong suit.

If you feel the IVA is right for you, I suggest you Google 'Insolvency Practitioner Reviews'. 4th result down, after the sponsored links, takes you to a very good review site. Speak to 2-3 well-reviewed companies, and choose one that feels right for you. This is important, as you will not be able to change providers once your IVA is up and running.

Fees: As you say, these companies are in business to make a profit, so yes, fees are involved. However, contrary to what some might have you believe, many firms don't charge you anything 'up-front'. In any event, their fees are paid out of your monthly IVA payment (and agreed by your creditors). Fees vary from provider to provider, and may be proportionate to your overall debt.

Regarding what is deemed 'reasonable' expenditure: All IPs that I’ve come across make reference to the Stepchange Budget Guidelines Report here.

https://docs.google.com/file/d/0B7LabJy69BP1M0gxeHQ1SDFiN1E/edit?pli=1

It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc.

If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. I have come across people who underestimate their expenditure and subsequently have difficulty.

Equity release: Bear in mind that, however unlikely it is currently likely to happen, most IVA's require homeowners to (subject to a property valuation in Month 54 of the IVA), attempt to release equity via remortgage (or secured loan with the advent of the 2014 protocol), up to 85% LTV to increase creditor dividend up to 100p in the £. (Subject to the resulting payment being max. 50% of you current IVA payment for affordability reasons). It goes without saying that the other usual affordability criteria apply such as limitations based on multiples of household income etc. For most IVA customers, equity release is simply not possible, so your IVA goes on for a 6th Year instead (which usually works out a lot cheaper).

If anything, with the implementation of the new, more stringent mortgage rules coming in from tomorrow, most of us wont stand a snowball's chance in hell of getting a remortgage/further secured borrowing (unless you have stacks of equity of course and a very high disposable income).

Like you, I am self-employed (Ltd. Co.), and all I can suggest is that you have a chat with your accountant to ensure not only that you are 'tax efficient' in how you divide salary/dividend, but that you make your income ultimately look as small as possible to keep your IVA repayment low, and to further minimise the risk of being clobbered by the equity release clause. Personally, I am looking at ways of taking full advantage of the £2,000 NI rebate brought in at this Year's budget by increasing salaries for my Wife and I.

Some further advice:

I know some IVA firms advise stopping creditor payments: Personally, I would try to keep up with min. payments until I know my IVA proposal is viable.

In the interim, it is worth trying to withdraw what you can IN CASH, NOW from your bank accounts/cards etc. going into the IVA. This is because many creditors, once they get wind of an IVA application, will freeze your account without warning. You may therefore need this cash buffer to tide you over.

Bank Accounts: If you still are in the pre-approval stage, and any of your debts are with your existing bank, you need to open a full current account with a non-creditor institution now! (less overdraft of course). Best not to reveal that you are considering an IVA though (no requirement to volunteer such information).

Important to do this before you are on the register, as you will then probably be limited to a handful of basic accounts.

Do not switch to HSBC/First Direct: when they find you on the insolvency register, (which they will), they will make you close your account.

Lloyds are pretty hostile now as well (so I have read).

Glad I went the IVA route in the end - can now sleep at night, Hope you get back on track financially soon as well. Best of luck if you decide to take the IVA plunge.

City1

Thanks, for the concise reply.

I have read a lot that iva's are a nightmare in regards, not being able to do holidays... What is your experience of living with an iva. Sounds like a stupid question, but why dud you chose that route over a dmp?

Is big brother watching you, so to speak?

Thanks

UpToMyNeckInIt

...Nothing stopping you going on Holiday.

Either pay for it from your business account if you don't want your IP to know. (Providing of course, they do not require your company bank statements at review time - they should not need to, as your limited company is a completely separate legal entity to you as a person, even if the reality is that you are in control of both).

Even if you are paying for a Holiday out of your own current account, providing you can demonstrate that the Holiday was funded from savings in your outgoings (eg: not spending as much on your clothing allowances, hairdressing, meals at work etc), then you should be OK.

Ironically, 2-Years ago was the first time I took a Holiday for ages. I was concerned as to how I would be able to explain a substantial payment to a travel agent for a Spanish all-inclusive at review time, but it was not even mentioned. Was even able to afford to go away again last Year, and this Year's Holiday has been booked/paid for as well.

I appreciate that being able to do this in an IVA makes me VERY fortunate - plenty of people struggle all the way through. Like I say, read those expenditure guidelines, and make sure your claim for expenditure against every possible thing (short of being downright dishonest - eg: don't claim for Sky TV if you don't have it etc).

Being self-employed ironically seems to be an advantage: My accountant is very good at 'minimising' my income for tax purposes. These figures of course, are the same ones used in calculating my IVA affordability at review-time. In reality therefore, assuming your accountant does the same type of thing, you probably 'take home' more than your accounts suggest.

You will probably find that you will initially feel relatively well-off once your IVA is up and running, as you are no longer scrimping/saving to meet minimum payments. In my case, I was having to find c£700pcm to meet minimum payments, vs a £270pcm IVA repayment.

My reasoning for choosing the IVA over the DMP is explained in response #5 on page 1 of this thread:

https://forums.moneysavingexpert.com/discussion/4778005

...So, if I had listened to the debt charities, and advice on this forum, I would be 10-15% of the way into a 15-20 Year DMP, as opposed to 33% through a 5-6 (probably 6) year IVA. Furthermore, I probably would have had to sell the rental property, which since May 2012, would have cost my family £8,000 in lost net income, and £30,000 in equity due to property price increases.

In summary, I consider myself very fortunate, having had a lucky escape, and nearly risked losing my home. To me, the IVA is a God-send. Providing my business stays profitable, I anticipate paying back c£20k over 6 Years. £15K written off, and saving £500pcm interest/charges. I can live with the inconvenience of a knackered credit rating for the next 4 Years for that. Actually, it's a bargain!

Going for the DMP would have resulted in me being worse off over 20-Years to the tune of, well who knows, but well into 6-Figures I would estimate (chances are I would have had to sell the rental property - my pension, at some point).

Niceri

Hi

Does anyone have any knowledge of what rights to accounts and payment information a person in an IVA has? I have a very close friend in his final year of an IVA with Pay Plan. He's done really well and stuck to a very tight budget, never missed a payment and never argued when they upped payments due to small bonuses received in his salary. But during this time he has gone through 6 different account handlers and on numerous occasions they ring and say he has to pay more then email and say no he doesn't. They are never available to call direct and don't respond to emails … ever! Earlier this year they made him carry out credit card PPI claims and insisted he had to do it through a certain PPI claims company (can't remember who at the moment) and two payments of around £2,700 each were the result of these. From one of them he was given £900 as his share to keep which was a pleasant surprise because he assumed all of it would go to creditors. Presumably Pay Plan and the PPI company took their cut too. On the second one though he was told his share is just £100. How can that be? And who/where did the remaining £2,600 go? He has asked Pay Plan numerous times for this information and they don't respond. It's not that he's expecting a windfall but given the amounts, surely either his IVA value has gone down or the time period for paying it off has been reduced and he just wants peace of mind that the bulk has gone to his creditors and not lining Pay Plan and the PPI companies pockets. It is very strange that the proportions are so different. They also got both cheques at the same time yet there was 5 months between the £900 payment and the £100 payment and the latter was only because he emailed chasing it up! The latest situation this week is (another) new account handler calling him saying that he needs to be paying more each month all of a sudden when there has been no change in any of his circumstances … if anything utilities etc have increased. When he asked for more detailed information as to why and copies of the calculations she was basing this on etc she said said she'd get back to him. She didn't but then later that evening he got an email saying he didn't have to pay anything extra … no explanation, no apology for the stress caused, nothing.

I am very concerned that these people are not operating fully within the legalities of IVA administration … or that they are employing people who are not qualified and that mistakes are being made and payments overlooked or miscalculated etc. Their staff turnover certainly indicates a problem of some sort. I don't want him to get to the end of this IVA only to discover they've completed messed it up and he's not released when planned or that creditor payments have not been accounted for correctly etc … I would also like to see exactly what Pay Plan is taking.

Please can anyone advise if he has rights to all documentation now and how do we go about getting it - he's asked nice both via email and by phone to this account handler and nothing has come about. I would like to be able to draft him a letter quoting his rights and threatening whoever Pay Plans regulatory body is etc if they don't comply. Any advice would be gratefully received.

Many thanks
Nic

Donnametty

Well I entered into a joint IVA and the guy came along sold it to us best thing to do!!!! Oh dear after 9 months and a lot of stress and illness we had to end the IVA however we had paid 9 months and a large deposit. We wrote asking could we come out and eventually got a letter saying we could. However when I asked about the money they sent a huge bill with all there fees and a charge of 375.00 for the guy who came to our house had a coffee of us. We lost nearly 3K there fees came to the exact amount we had paid in I should have known that wasn't expecting money back but no one got paid except them Credifix kept the whole lot. I was sick , I had had a bleed in the brain and two strokes and I was well Jo words can explain.......... Is this the case.😢😢😢

taylor106

Hi guys just a quick question or two
I entered an I.V.A a year ago with a company called Knightsbridge from Manchester i have saw a few bad reports on this company so i started my own search into them and im getting conflicting stories and such on them, anyway the problem im having is this i received a letter from them asking me to pay more into my trust fund, (which is only for £8,000and is costing me £122 per month) and they would now want £163 per month as i have had a pay rise this is not the case i have had no pay rise so i called them and complained to them and received a call back from them to which i had a few other question while i had them on the phone and during this time i found out that my debt to my creditor now stands at £2,901,56p which was fine but there fees are a staggering £5,926,44p total of this now makes it nearly £9,000 almost a £1000 more than the original loan so i have put another complaint in to another department but im not convinced anything will come out of this my question is this are they allowed to do this ? and if not is there anything i can do to stop this happening ?another thing is this to be in an I.V.A as you know you need to be registered in the insolvency court and you are able to see if you are on this register or not i have been on all registers for England ,Wales ,Scotland and Northern Ireland and cant find my name on any of these should i not bo on one or all of them or was i looking in the wrong place ?and if im not on any register then does this mean that im not in any I.V.A ? if im not what can i do about this ?
sorry for the long story but i really need answers thanks for you time guys :(:(