Reasons for IVA extention

Concerned75

Hi. Can anyone help please.
I'm a bit confused on the term of my IVA.
My IVA agreement letters tells me the creditors, what they're owed, my payment each month and the duration of 60months.
My chairman's report has clauses saying "40 months payment of £100, then 20 months payments of £175." It also mentions payments into 72months.
I am very concerned over these year forecasts as at present, I am paying £179.70 a month in my 4th year. My total payments to date are roughly £5,553.
I was told that my IVA would run for 6 years, maybe a couple after that, but not 7 years.
The original agreement works out at £6,000 will be paid at end of IVA.
At the rate my payments go up every year, I'll pass the £6k amount, (actually in a few months time)
So where's the "write off the rest of your debt" bit? and can anyone make sense of these payments/extra years?
Hope my message isn't confusing you as it is me.:(
Again, thanks in advance.

Concerned75

Sorry, should have said a couple of months after that.

memberme

72 months is 6 years?

memberme

what was your original debt though. You can't calculate from the original payment shedule and assume that's all you owe.

Concerned75

The original debt was 15,000 from the mortgage and £9,000 from the bank. What's the point of £6,000 being on the agreement, if it has no relevance to the final amount you'll be subject to pay? I started paying £100 per month, based on my expenditure and job, but no debt management, loan company etc..expect you to pay a minimum amount for the whole term. They're all in it to make money and recoup it asap!

memberme

It may seem like that but the calculated return of £6K would have been based on your circumstances at the start. If your income increases so does the payments and therefore the return to your debters and a percentage no doubt to the IVA company. It's standard practice to increase payments along with wage increases. The original amount suggested to the creditors on your agreement is the minimum they should expect to see. You can of course up you expenditure claims to a degree to help counter this if you're a little creative but it's not easy.

phil2580

memberme is correct about the uplifts. I wonder if you actually read your proposal before signing it?

Depending on who your IVA provider is, your terms and conditions will be based around either the IVA Forum terms, or R3 Terms, but regardless of which terms are applicable, there will be a paragraph along these lines:

"The Supervisor is required to review your income and expenditure once in every 12 months by reference to latest form P60, pay slips and proof of increase in any expenditure. You will be required to increase your monthly contribution by 50% of any net surplus one month following such review."

Based on typical fees and costs, your original £6k contributions would have led to an approximate return to creditors of £3750, or 15.6p/£ as follows:

Total Contributions: £6,000
Less Nominee Fee: -£1,000
Less Supervisor Fee: -£750 (based on 15% contributions after nominee fee)
Less Disbursements: £-500
Balance for creditors: £3750

Estimated dividend: £3750/£24000 = 15.625p/£

In this example, you would be writing off nearly 85% of your debt, so that's where the "write off the rest of your debt" comes from.

Before moaning about increases, perhaps you should have a read of your proposal?

Even with the uplifts, you are still getting away with only paying back a small proportion of your debt.

If you think this is unfair, why did you agree to the proposal in the first place? There's nothing stopping you failing your arrangement now if you're not happy with it, I'm sure the creditors will be happy to back-date all of the interest and charges they haven't been applying while you've been in your IVA.

Concerned75

Before moaning about increases, perhaps you should have a read of your proposal?

Not every debt is down to willful spending or carelessness. I had PPIs in place on ALL creditors, which to date, some were trying to give me back!! This was set up under pressure AFTER a very serious illness; physically and very life threatening, for your information. Under such conditions, it's not so easy to be "clever" with the threat of make a decision now, or you could lose your home. Constructive advice was asked for, not self righteous comments. If you don't know the full story, it's polite to ask before you make an assumption comment.

TakeAwayKing_2

Mis-sold lol

phil2580

My point is that you have clearly not understood your proposal. While it would have said something along the lines of "I will make x payments of £x...", it would also have had the uplift clause.

I also never claimed that your debt was from willful (sic) spending or carelessness.

As for having PPI with your creditors - how is this relevant to your initial complaint?

I'm sorry you didn't find my original post constructive, but it gives exactly the illustration and explanation you asked for.

Concerned75

PPI was sold to me on my accounts as an insurance that if I was sick or lost my job, they would help cover any outstanding balances on my accounts during that period of time , which is EXACTLY what happened to me and the cover didn't happen from the lenders, hence the IVA and the RELEVANCE.