Paying back twice the original IVA

Somerset_mum72

I’m confused by my Iva. Was supposed to end April after five years and I was waiting for creditor meeting when I got my divorce settlement in June
I let them know I now had money to complete
The total debt at start of IVA was around £20k and so far I’d paid off £13k. The final figure I’ve been given is £17k which means the initial £20k of debt will now cost me £40k to settle and this is after the IVA was supposed to have ended. Surely 50% more than initial debt can’t be right?

Somerset_mum72

I meant £30k ���� in total
It’s still seems very high though

sourcrates

Hi,

The thing is you see, you won’t of paid off 13k, you will be lucky if you have repaid 5k out of that 13.

This is because of the high fees IVA’s can command, your IP’s fees will probably total 6-8 thousand pounds, this would of been explained to you at the start, and will be clearly stated in the paperwork.

Fee’s can vary greatly, that’s why it’s important to know what you are signing up to beforehand, for example stepchange (via grant Thornton) charge 2k then 15% per month, there are also other costs known as disbursements. These are expenses that are paid to third parties during your IVA and include insurance to protect any money paid to your IVA, system maintenance fees, and a registration fee to register the IVA with the Insolvency Service.

IP’s can charge what they like, there is no fixed scale for charges.

Craig1981

agree with sourcrates

when i did my IVA, costs breakdown was on page one of the agreement and how it is paid off first. My costs if i remember correctly were only around £7k though, and these were paid off in the first 15 months.

Somerset_mum72

Thanks guys I’m going to wait for the breakdown. I seem to remember when it was first setup the Chirmans report mentioned capping their fees so I’ll have to double check
I’m just annoyed as getting the Iva was supposed to stop interest etc building and looking at the amount I’ve got to pay I’m almost thinking paying down the debt would have been better than the IVA!
Either way once sorted I’m looking forward to a hopefully debt free future ��

PrettyKittyKat

The thing to remember is that the IVA has protected you and given you peace of mind for the last 5 years (I presume as you say you were awaiting a completion certificate). Presumably you entered the IVA as you could no longer manage your credit commitments, so you've had 5 years of disposable income (tight, but still DI). It can seem frustrating that the figure is higher than your original debt, but IP's and their staff don't work for free. Not many people are in the position to pay 100p in the £, so you are luckily and I'm hoping you have something left over for yourself after . Focus on the positives