Was I wrong to take out an Iva then go on a debt management programme

edited 30 November -1 at 1:00AM in IVA & DRO
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DORMAN78DORMAN78 Forumite
2 Posts
edited 30 November -1 at 1:00AM in IVA & DRO
Hi all I’ve been on an Iva now for two years, I felt at the time that it was my only choice. I owed just over £5000 an now feel I was put on an Iva which has added debt (their fees), I feel it would of been better going onto a debt management program. I have had two ppi claims during my two years on the Iva. But I cant see where the money is going. Can anyone give me some advice if there is any thing I can do. Thank you all

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  • sourcratessourcrates Forumite, Board Guide
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    Oh my days, £5000 ????

    IVA’s are designed for, homeowners, mainly, who owe many tens of thousands of pounds, yet have a property to protect, whoever put you on an IVA for a paltry 5k of debt wants dis-barring.

    The fees do not add to your debt, they are paid from your IVA payments.

    The advice you were given was derisory to say the least, you would have been better off on a DMP, but do not do anything hastily, what are your payments to this arrangement ?
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
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  • £89 a month I have had 2 ppi claims which have gone to the company one for 1100 and the Other one was for £1997
    This including my £89 a month for 18 months would nearly of cleared my debt.
  • sourcratessourcrates Forumite, Board Guide
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    DORMAN78 wrote: »
    £89 a month I have had 2 ppi claims which have gone to the company one for 1100 and the Other one was for £1997
    This including my £89 a month for 18 months would nearly of cleared my debt.

    Your quite correct, it would have, you were given really bad advice, for such an insignificant amount of money as 5k, compared to what you would normally require, an IVA is not appropriate.

    Can you explain the circumstances surrounding how this happened, which company is it, what did they tell you ?

    A mis-selling complaint may be appropriate.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • fatbellyfatbelly Forumite
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    £89 x 60 = £5340. Sounds like that would pay the debts, never mind the ppi reclaims.

    I have never seen a successful claim of mis-selling against an IP (though I have seen many examples of mis-selling)

    But it's worth a try.

    Have a read of this

    https://debtcamel.co.uk/complaint-iva/
  • PrettyKittyKatPrettyKittyKat Forumite
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    An IVA when you only owed £5,000 is absolutely madness. As fatbelly points out you would have paid your debt back sooner via debt management. I am surprised your creditors accepted this given that they would have got 100% back if you'd just paid them directly.

    With your PPI refunds you can't be far off paying 100p in the £ now. You should not have to continue paying for the full 60 months. I would recommend calling your IVA company asking how much more needs to be paid to pay 100p in the £.
  • Suseka97Suseka97 Forumite
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    Okay, am I reading this correctly. The OP has been paying £89 for 2 years now = £2,136 and has paid £3.097 from PPI claims into the IVA? Which means she's already paid £5,233 into the plan!! Surely something can be done... can she just stop paying?
  • foxy-stoatfoxy-stoat Forumite
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    Sounds like you just needed to budget better than go into an IVA for that amount of debt. Shame you didnt do the PPI claim thing before the IVA as you would of settled over half of the balances there.

    You should of reached the 100% point by now, speak to your IP and find out.
  • fatbellyfatbelly Forumite
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    I'm guessing the fees will be around £1000 plus £750 and then there will be 'disbursements'. (how long is a piece of string?)

    They'll try to drag this out for the full term.
  • PrettyKittyKatPrettyKittyKat Forumite
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    Suseka97 wrote: »
    Okay, am I reading this correctly. The OP has been paying £89 for 2 years now = £2,136 and has paid £3.097 from PPI claims into the IVA? Which means she's already paid £5,233 into the plan!! Surely something can be done... can she just stop paying?

    All of that won't have been distributed to creditors as fees are taken first. So if OP stopped paying they would breach their IVA and in turn it would be failed. The creditors would not have been paid in full so they would then chase OP for payment. Probably easier just to keep paying the IVA.
  • ToxtethO'GradyToxtethO'Grady Forumite
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    You do hear of 3 year IVA's sometimes, with the creditors approval. They're rare but I have heard of them.
    Need a bit more information but the OP could make a complaint to the insolvency practitioner first and see how it goes from there.
    We're here to help and support for further advice.
    OP could you answer how many months is this IVA over? Do you still have a copy of the proposal?
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