IVA Company Ripped me Off By Nearly £4K

ScaredWitless

I am asking advice regarding a company called Debt Free Direct.

In June 2012, they set up an IVA for me.

I had 4 creditors, and a total debt of £11,124.46p.

All debt was unsecured, ie credit cards, personal loan and catalogue.

The first yearly review went fine, my payments stayed the same.

The second year of review, they increased my payment by an extra £45 a month.

I refused and told them where to go, so I cancelled the IVA.

Just before Christmas, I did an SAR.

I am somewhat shocked at what has come through.

The firm had lied about how much overall level of debt I was actually in.

The main concern is how much debt I was in with one creditor, Halifax via a personal loan.

Halifax filled in a proof of debt form they submitted to DFD.

They said the outstanding balance was £6,718.52p.

On the Amount Owed table of creditors done by DFD, they claim its outstanding by £10,668.00!!

I have proof from Halifax, that there was 0% interest added onto the outstanding balance of £,6,718.52p

So, the IVA company have mysteriously added on nearly £4K, without an explanation.

I feel that they tried to increase my monthly payments by fraudulently saying I was in more debt then I was!!

Anything I can do about this!?

DorisTrousers

It is not uncommon for debt levels to change when an actual POD is received, but an IVA is not primarily based upon what you owe, but more what you can afford to repay.

Once a POD was received then the outstanding figure of debt should have been amended accordingly, but it is not the fact that you owed more, or less, that matters. At the first annual review your circumstances were broadly the same, at least affordability wise, and you were happy to continue at the original rate. The second one your payment went up. Your payments should not go up in an IVA unless you can afford to increase them. You say you were unhappy with the increase, you do not say whether you could afford the increase or not.

DFD would doubtless say that the increase was affordable, but that you refused to pay and effectively self terminated your own IVA. Without evidence to the contrary, or not as the case may be, then it is impossible to advise further, but I am afraid that the debt level is a complete red herring. You did not terminate due to owing less, and you did not terminate as you owed more, you simply refused to pay extra when, assumedly, you could afford to do so, which is a completely different scenario. You did not pay back £4k to DFD that you didn't owe, so your thread title is also wrong. I am sorry if that is not want you wanted to hear.

foxy-stoat

ScaredWitless wrote: »

The second year of review, they increased my payment by an extra £45 a month.
I refused and told them where to go, so I cancelled the IVA.

They would of increased your payments based on the annuall review document you completed, so it probably looked like you had scope to increase your payments according to your income/living costs.

No idea why you would refuse to increase your payments as it would of been in the agreement.

If you made your IVA fail then the IP would of added fees and interest would of been added to the balances.

You do know that usually you only pay a quarter of what you originally owed and with no interest when you started the IVA, IP fees are taken out of the IVA and your creditors get the rest.

I think you may of shot yourself in the foot for £45 a month here.

Good lucks

sourcrates

ScaredWitless wrote: »

So, the IVA company have mysteriously added on nearly £4K, without an explanation.

I feel that they tried to increase my monthly payments by fraudulently saying I was in more debt then I was!!

Anything I can do about this!?

All your IP`s fees come from the payments you make.

As already stated, at your annual review, you have to provide a budget, if there is more leeway in that budget, then your payments increase by that amount, that is standard industry practice and would be covered in the paperwork you were given.

The IVA company cannot just add to a particular debt willy nilly, it depends on the information its given, why do you assume automatically that they lied ?

I suspect there would of been a rational explanation for it, if you had pursued it through correct channels.

Just canceling the arrangement on a whim could have very serious consequences for you, i would advise you to contact DFD and obtain an explanation, and what the current status of your arrangement is.