IVA more paid than original debt

Nezzington

I wonder if I could get some advice. Two years ago I was advised to take out an IVA on a debt of £7000 I am now only £300 away from paying the original debt due to payment of overtime. However it appears that this makes little difference for the IVA and I will need to continue to pay into it for the next 3 years. This means in all likelihood I will be paying £17000 on a debt of £7000. Even loan sharks wouldn’t charge that. Is the IVA one huge money spinner and have I been hugely conned and more importantly is there any way out.

Helpmeoutofthismess

It does sound like you were missild an IVA, £7000 is a very small debt to take an IVA for, a DMP would probably have been a better solution and it would have been free if you had gone with one of the charities that help with debt :sad:

You will only need to make payments to your IVA till you have paid back the full £7000 plus the IP's fees then the payments will stop.

H x

Nezzington

Thanks for that I sincerely hope you are right. I’m working a lot of overtime and my financial situation would be massively improved if I was no longer paying into it. I have a review in February and I am considering asking for a final settlement figure.

PrettyKittyKat

An IVA for 7000 wasn't the best advice given that this would only be about £120 per month for 6 years on a DMP.

But that can't be changed now.

The IVA fees will likely be around 5k, so I would expected you have to pay in around £12k in total.

However the best thing for you to do is to call your IVA company and ask for the '100p in the £' figure. This is basically the maximum amount that would need to ever be paid into the iva as it is 100% of the original debts plus the IVA fees. Although it could differ slightly due to disbursements being estimated (these are costs such as postage). You can then minus what you have already paid in and get a rough estimate of how much more you need to pay. Your IVA completes once you have paid this in or once the original agreed term ends, whichever is sooner.

Craig1981

you need to find original paperwork and find out how much the actual fees are for the IVA - once all fees and original debt amount paid off, you are free from the IVA, as said above.

Nezzington

Thanks for that. I’m feeling really ripped off. What was promised as a reduced payment ends up with an interest of 80%. This kind of opportunism and praying on the vulnerable should not be allowed. All I can say is please no one make the same mistakes I did and stay away from payplan they are evil profiteers.

sourcrates

Nezzington wrote: »

Thanks for that. I’m feeling really ripped off. What was promised as a reduced payment ends up with an interest of 80%. This kind of opportunism and praying on the vulnerable should not be allowed. All I can say is please no one make the same mistakes I did and stay away from payplan they are evil profiteers.

There has been a tendency in recent years to "mis sell" Individual Voluntary Arrangements, this is because large fee`s can be charged by the IP.


An IVA was originally designed for homeowners who have massive debts but could not go bankrupt, if your debt is under say 20k, you should maybe consider another option.


If you remain unhappy, you can raise a complaint about your IP if you wish.