IVA's - the truth, the facts...........

maxmycardagain

The adverts for IVA's are enticing (write off debts, pay only 50% of what you owe,etc) but what are the truths?
Set up fees?
Payment charges?
Total repayable?

fatbelly

In marketing there is a phrase 'sell the sizzle, not the sausage'. This is a reasonable guide to IVAs

https://debtcamel.co.uk/debt-options/guide-to-ivas/

maxmycardagain

fatbelly said:

In marketing there is a phrase 'sell the sizzle, not the sausage'. This is a reasonable guide to IVAs

https://debtcamel.co.uk/debt-options/guide-to-ivas/

It seems to think we all get pensions at 55

im 65 and aint got one ...lol

thehog

It depends who your creditors are. If HMRC are involved they will want you to include your share of the equity in your property and they will put forward a modification to increase proposed contributions. Sadly most people looking at an IVA in this situation are so desperate to get HMRC off their backs they’ll sign anything.

 If it’s unsecured debt over £10,000 an IVA could work for you. You provide the proposed Insolvency Practitioner (IP) with your monthly income and expenditure, and agree how much you can afford to pay your creditors on a monthly basis. This and other information you’d need to provide are put into an IVA proposal which the IP (who at this stage becomes your nominee) circulates to your creditors. They are given a deadline by which their agreement to the IVA should be submitted to the nominee. In order to be binding, 75% of unconnected creditors (ie not your family or business) need to agree to the IVA and some may agree subject to their modifications being accepted. It depends on the amount a creditor is owed as to whether you need to accept the mods or not. A standard IVA would last a maximum of 63 months, with contributions being made for 60 months.
There are several fees involved, a fee for working with you and drafting the IVA proposal (around £2-3k), and a Nominee fee of £1,000 for reporting to creditors that the proposal you are putting forward is fit, fair and feasible, circulation of the proposal, following up creditor agreement etc. Once agreed, your Nominee becomes the Supervisor of your IVA. The fees can be paid upfront or it can be put into the IVA that they will be settled from contributions into the Arrangement. However,  creditors would expect slightly higher monthly contributions to cover this.
The Supervisor’s fees are set out in the Proposal, generally on a time cost basis, and are paid from the contributions, subject to creditor approval. The arrangement will also incur an insurance bond, postage disbursements and funds for storage of the Supervisor’s files for 6 years on conclusion of the arrangement. Supervisor fees and disbursements are not subject to VAT.
As with any insolvency procedure please proceed with caution. Best of luck whatever you decide.