IVA "management fee charge"

SpideressUK

My relative has an IVA which was supposed to last 6 years and when he took it out his debts were about £32K but he was due to pay back less than half of that I think over the 6 years.  He knew the IVA "management fee" charge was about £900 and that they had included that into his weekly/monthly repayments.  He also knew that should he get a "windfall" of money that his full debts became payable.

He is now due an inheritance and understands that his full original debt of the £32K is now payable BUT the IVA management company are now saying he owes them £6K in "management fee" - is this "allowed?" it's not like theirs was a debt that they then got reduced as part of the plan, their fee was their fee so are they now allowed to just expand their fee because they know he is coming into money?

sourcrates

This is an example of an average IVA arrangement -

IVA example

Example based on a typical client, with approx. £31,000 of unsecured debts who completes a five year IVA and has no equity in any property.

Typical monthly repayments (60 months) £300 

Total paid by borrower (including fees) £18,000 

Nominee’s fee £1,704 

Supervisor’s fee £3,149 

Supervisor’s costs £290 

Total amount paid to creditors £12,857 (41%)

There is also VAT to consider, plus other miscellaneous costs for administering the arrangement.

These are the standard fee`s your IP will charge you, so the 6k in your case sounds about right, yes.

SpideressUK

These are the standard fee`s your IP will charge you, so the 6k in your case sounds about right, yes.

Thank you very much I will pass that information on to him.