I feel like I've been mugged off.

AliStar1976

Ok, forgive me if this post seems more from the heart than the head. It'll be as brief, yet as concise, as I can as I do waffle on when I get going. 
In 2014, the wife and I entered into an IVA. We (collectively) owed just over £20k. We signed the paper work which included our mortgaged property to be taken into consideration (in retrospect we didn't fully grasp what this implied) thinking we'd be paying what we were paying for 5 years then all would be well and we'd have paid what we paid and the remainder of the debt would be written off. I mean isn't this the whole selling point of an IVA? We got to 2018 and we sadly lost our daughter. I was self employed and took a lot of time off. They were kind enough to give us an extended break - which we knew would extend the term of the IVA. 
By the back end of 2019, I started to ask questions about the re-mortgaging of our property. I was expecting it to be a relativity small sum just to top up the money our creditors (quite rightly) want paid back. Well, it turns out they want to remortgage for £15k - to cover costs! So, if their attempts to re-mortgage are successful, I'd have paid them £11k more than what I owed in the first place. If the re-mortgage is unsuccessful we have to go for another year and all I'd have had written of is £1.5k. 
I've willingly put myself in a position where I'd lose out on jobs and promotions over the past 7 years, suffered hardship (despite two reasonable - but not amazing -  salaries coming into the house) to either pay £11 grand more or just have £1.5 grand written. Something just doesn't seem right here. The wife read on the IVA Administrators website they only charge a fixed fee of £3,450 which comes out of your monthly contribution. 
Am I being taken for a ride or did I just not ask the right questions before I signed upto this? 

mwarby

You can't be asked to repay more than 100% of the debt, plus the IVA fees, plus statutory interest(this isn't so common). I expect all of this was in the agreement, but of course I don't know how well this was explained and wether you asked questions on bits you were unclear of.

I expect the break added to the fees, as there is normally an element of cost to setup IVA and an annual fee to run the IVA, there was also perhaps a second meeting of creditors(really exchange of letter/email/fax) to approve the break. Arranging a remortgage will also have costs such as broker fee, legal fees

It does seem to be a rather small amount to remortgage for, is it a remortage or secured loan they are looking at ? A secured loan can work out quite expensive compared to normal mortgage rates

sourcrates

Any break you take in repayments has to be repaid, usually the plan is extended to accommodate this, then there are the fee`s, the cost of running the arrangement, interest the creditors would have received had the agreements run there original course.

You can ask for the full financial breakdown, this is also why you should always keep your copy of your original agreement, as everything is detailed there.

Have you actually tried to remortgage yet ? as most find it impossible, and opt for another year of payments instead.

If your not happy, Google is your friend, search "complain about your IP" and submit an official complaint, at least you will get the answers you seek.

Having remaining debt written off by an IVA is not true for everyone, only those who cannot afford to up there payments, or have no house to remortgage, will get any of their debts written off at the end of the arrangement.

Neutrinno

AliStar1976 said:

thinking we'd be paying what we were paying for 5 years then all would be well and we'd have paid what we paid and the remainder of the debt would be written off. I mean isn't this the whole selling point of an IVA? 

Whilst I understand your frustration, this would of all been outlined in your T&C's when you entered the agreement and is what you proposed to your creditors. The whole selling point of an IVA setting up an affordable arrangement with your creditors, which protects your property allowing you to repay back as much of the debt as possible, whilst interest is frozen with debt usually written off at the end.

You can for a breakdown of the funds from your IP but yes you are liable to remortgage for whatever your outstanding debt is, this isn't just what's left owed to your creditors, it includes IP fees and statutory interest. There are rules in place which limits how much equity can be released; can't exceed 85% LTV, payments can't exceed 50% of your IVA payment and term can't extend beyond the later of SRA or mortgage end date.

As Mwarby mentioned above; if a secured loan has been offered it may appear more expensive with the rate associated with second charges, but usually these can be the cheaper option as it will protect your biggest debt (main mortgage) and keep that on a lower rate. You can usually review your arrangement again in the next 12 or so months when your IVA has completed and credit file back in order. 

TakeAwayKing_2

Your IVA proposal would have set out the house remortgage as part of the “deal” that the creditors voted on and would have been one of their considerations. If the time has now come for that money to come into the pot for the creditors, it will need to happen, or the extended timeframe of monthly contributions as you have noted. 

Try not to look at the amount of debt you are writing off as being a measurement of how successful your IVA is / was. 6 years ago when you were setting this up, no doubt things were fraught with worry and because of the IVA being accepted, you avoided bankruptcy and the loss of your house. Try to remember what a relief it was when the IVA started. 

It is likely that the fixed fee you refer to was the Nominee’s fee for setting up your arrangement. Once approved, there would almost certainly be fees for maintaining the arrangement and dealing with the day to day - this would have been explained in your proposals.