Termination of IVA

martin400

I have come into some money and want to bring this arrangement to and end. Creditfix have given me the option of terminating the IVA and dealing with the Creitors myself. They say that the creditors may backdate the interest that had been frozen. My credit rating will be affected though doesn’t worry me. The total charge 3 years to service this debt with Credit fix is over £7,000 of which I have paid £3300 to date. My question is can Creditfix pursue me for outstanding fees? 

mwarby

Yes they could persue you for outstanding fees, its not unheard of for an IVA to include provision for bankrupting the person in the event of the IVA failing (my IVA had this)

The fun you may have is that the windfall(you coming in to some money), probably falls due to the IVA and creditors already, Creditfix would be oblidged to try and recover this for the creditors

fatbelly

You've told your IP that you have had a windfall and they have said you can 'terminate the IVA and deal with the creditors yourself'
I'm sorry but this doesn't ring true. 
Can you post the exact words that they have used?

sourcrates

Any windfall will come under the windfall claus, and must be paid to your creditors, you will not have any say in the matter, the responce from your IP is disturbing to say the least, was this comunicated in writing, or over the phone by a call handler ?

martin400

The precise wording is as follows - You can also choose to terminate your IVA and deal with the creditors yourself. The termination of an arrangement will show you have defaulted on your IVA which will affect your credit applications.You may also find that creditors backdate the interest they had agreed to freeze at the outset of the IVA.
My original debt was £21,288 and Creditfix’s charges amount to £7,781.08 and to date (actually 2 years) I have paid £3,300. I have no issue with paying the creditors but am being charged an extortionate amount including £650 for early redemption. Also they have administered 2 years not 5. Don’t need anyone to state the obvious re contract etc.

sourcrates

It a typical IVA, charges do vary, but that`s about average.

You are not actually paying charges and creditors here, it doesn`t work that way, your monthly payment to your IP is broken down, then at certain times throughout the arrangement, the money in the pot is disbursed to your creditors, first, any charges are deducted, then interest, and anything else the IP see`s fit, then whats left is paid to your creditors.

It actually makes no difference to you how much is deducted in charges, you will never pay more because of this, you will still not pay the full 21k.

martin400

On the contrary I am paying the original debt plus 

martin400

Actually paying the full debt £21,288 plus £7781.08 which totals £29,069.08. £3,300 paid in voluntary contributions. The question remains if I terminate and pay the creditors what they are owed will they come after me for fees? Would creditors backdate interest?

sourcrates

martin400 said:

On the contrary I am paying the original debt plus 

If your not happy, you can terminate real easy, creditors do not automatically go for bankrupcy, they usually start the collections process again, however, the charges for administering your arrangement to date, will have to be paid.

When you start an IVA you get a wad of legal paperwork to look through, its called the IVA proposal, and everything is detailed within that proposal, what you will pay, when, and how much.

Mine was about 80 pages thick, but it was very detailed, and covered everything from payments to fee`s, to re-mortgaging etc etc.

I expect you got a similar document, its up to you to familiarise yourself with the costs involved with the process, you have the option at the start to not sign it, once its signed, you, and they, are legally bound by the contents of that agreement.

Its a bit late in the day to say your unhappy with it now, but this is one reason why IVA`s have a high failure rate, as people are unaware of how the process actually works, some pay more than they owe, some pay less, its usually down to individual circumstances, and the fact these things are mis-sold by the bucket load.

martin400

The point is I am paying for 5 yard admin/mgt in 2years plus early redemption. This was definitely missold and may have to go down the legal route. 

fatbelly

sourcrates said:

It actually makes no difference to you how much is deducted in charges, you will never pay more because of this, you will still not pay the full 21k.

Unless you have a windfall. In that case you pay the debts in full, plus the fees, plus statutory interest