IVA Paid Off?

couton

Hello!

I'm currently in an IVA with Creditfix (originally through another IP but was moved a while back to them) and I want to make sure I have the right understanding in the way I believed the IVA process to work.

I started in 2017 with just under £30k of debt, and now 3 years in my credit file shows two accounts with around £3,500 on each so around £7k remaining. My monthly payments are just under £800 a month and I have an extra £1900 going into this from a work bonus this year. By my calculation that would mean both these accounts would be paid off early next year.

It is my understanding that this would mean that my IVA would be paid off after the 5 years, but their app shows that my total owed is just under £42k - am I correct in thinking that early next year would bring the payments to an end?

Many thanks,
Paul

fatbelly

So you have 24 payments left at £800 a month and a bonus of £1900, making potentially  £21100 still to go in.

You have already paid £28800.

Yes it doesn't look like this one will run its course. I think 7 or 8 more payments will do it, but I do not know precisely the fees involved.

This does beg the question why you didn't go for a debt management plan - you'd be finishing around now and having your work bonus to yourself.

couton

Thank you!

I spoke to CreditFix yesterday and it looks like its the way their App works, it calculates what you'd pay if it ran its full course so isnt accurate. The actual amount is around £33,000 which is far less than the shock amount I saw!

When I started the IVA I was in a different job, and my payments were around £400 a month, so it seemed to be the most logical sense given the creditors cant come back to ask for interest with an IVA whereas I was told they can with a debt management plan? I've since moved jobs and have a higher income hence the increase in payments.

I've worked it out to be another 8 payments or so and I'm happy for my bonus to go into it, although its slightly annoying it does at least pay it off sooner!

Paul

fatbelly

Thanks for coming back with an  explanation. I understand, and that does make sense.

For casual viewers of this thread, let's spell out what happened.

You were 'strongly guided' to an IVA by an organisation that only does IVAs.

They sold the positives of an IVA and pointed out that interest was stopped by law in an IVA - in a dmp, as an informal solution, it's only custom & practice that freezes the amount.

Your situation improved and so your payments went up.

You will end up paying the debts in full, plus the IP fees which, on a rough calculation, add up to around £7000.

dayleb23

This has thrown me a little.. I am currently with PAYPLAN on an IVA, and they don't allow me to pay things off sooner, they just simply take 50% of whatever bonus's/ overtime I receive.. (also allowing me to go over my monthly wage by 10%.. then they take 50% of anything over that)

I was 100% sure IVAs don't allow you to pay it off sooner.. unless you are offering a full and final settlement. 

As any extra money you earn, goes to the creditors. But your monthly instalments stay the same until the end of the term.

Am I being wrongly treated here by Payplan?

mwarby

dayleb23 said:

This has thrown me a little.. I am currently with PAYPLAN on an IVA, and they don't allow me to pay things off sooner, they just simply take 50% of whatever bonus's/ overtime I receive.. (also allowing me to go over my monthly wage by 10%.. then they take 50% of anything over that)

I was 100% sure IVAs don't allow you to pay it off sooner.. unless you are offering a full and final settlement. 

As any extra money you earn, goes to the creditors. But your monthly instalments stay the same until the end of the term.

Am I being wrongly treated here by Payplan?

I don’t think so. Essentially you’ve agreed to hand over your disposable income for 5 years in exchange for writing off your debt. 

If you repay all debt and fees in the 5 years your IVA ends then. If you get to 5 year point and still have outstanding debt this is written off.

One of perks for creditors is that if your income goes up, due to say promotion, they get more money and write off less debt. Also if you get a windfall such as a legacy or lottery win this goes in to the IVA. You need to have a good offer of money they wouldn’t already be getting for them to forfeit these opportunities for more money

Whether the IVA pros and cons were pointed out to you I can’t say, but it sounds like your IVA is proceeding as normal. The details of IVAd can differ slightly between providers and when it was started, you should have and big bunch of paper detailing the rules for your IVA, which you should have seen and acknowledged before the IVA was set up

dayleb23

mwarby said:

dayleb23 said:

This has thrown me a little.. I am currently with PAYPLAN on an IVA, and they don't allow me to pay things off sooner, they just simply take 50% of whatever bonus's/ overtime I receive.. (also allowing me to go over my monthly wage by 10%.. then they take 50% of anything over that)

I was 100% sure IVAs don't allow you to pay it off sooner.. unless you are offering a full and final settlement. 

As any extra money you earn, goes to the creditors. But your monthly instalments stay the same until the end of the term.

Am I being wrongly treated here by Payplan?

I don’t think so. Essentially you’ve agreed to hand over your disposable income for 5 years in exchange for writing off your debt. 

If you repay all debt and fees in the 5 years your IVA ends then. If you get to 5 year point and still have outstanding debt this is written off.

One of perks for creditors is that if your income goes up, due to say promotion, they get more money and write off less debt. Also if you get a windfall such as a legacy or lottery win this goes in to the IVA. You need to have a good offer of money they wouldn’t already be getting for them to forfeit these opportunities for more money

Whether the IVA pros and cons were pointed out to you I can’t say, but it sounds like your IVA is proceeding as normal. The details of IVAd can differ slightly between providers and when it was started, you should have and big bunch of paper detailing the rules for your IVA, which you should have seen and acknowledged before the IVA was set up

I am looking at offering 6k to my creditors gifted by my partner (I owe around 10k atm) because myself and my partner are looking at adopting children (gay couple so limited to opportunitys of having children) 

I also work full time currently and I am looking at leaving my current employment to work part time to be the more available parent. do you think this will favour me in my statement when I offer the 6K? as there's a risk they'll have reduced monthly payments when I go full time. and also when I have a child to care for (costs etc)

mwarby

You owe 10k - is that your total debts and IVA fees minus repayments to date, or is it the amount of repayments you have left ? big difference

Assuming its the latter £6k may or may not be attractive. While you may have £10k of repayments left, it maybe that you'll end up paying more or less than this. I would definitely speak to your IVA company just so you know whether they think a modification can be made, or wether your looking at a failed IVA.

dayleb23

okay thank you, I will contact my IVA company for advice. Yes its the latter, which worries me a bit. Worst case scenario they will reject the offer and ill just have to continue repayments as planned