IVA Fees
I recently asked for a list of balances on what I still owe and it seems that all the payments of £155 per month I have made since 2020 have just gone on fees and interest.
I was recently made redundant and they have said when I get a job I have to send what is left of the redundancy to the IVA but I dont want to do this if its not paying my creditors and just going on fees.
Can anyone advise please.
Comments
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In some IVAs the fees to be mainly paid in the first few years.
Do you think it will be easy to get another job and is it likely to pay more or less?
When you started the IVA did you have any assets to protect?0 -
Who did you take advice from before you went into the IVA?
How much did you owe?
Do you have a mortgage or do you rent?If you go down to the woods today you better not go alone.0 -
ManyWays said:In some IVAs the fees to be mainly paid in the first few years.
Do you think it will be easy to get another job and is it likely to pay more or less?
When you started the IVA did you have any assets to protect?0 -
Why did you go into an IVA if you didn't have any assets to protect?If you go down to the woods today you better not go alone.0
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The rules regarding redundancy payments should be in the agreement. Normally you are allowed to keep 6 months’ worth of your take-home pay from your redundancy money.
If you do find work within the six-month period, it’s likely that a further proportion of the redundancy funds will need to be paid into your IVA.
Your options will be to
- continue with the IVA, knowing that if your surplus income has risen you will be required to pay more into it
-stop paying, allow it to terminate and then take advice
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An IVA is basically bankruptcy for homeowners, if you don`t own a home, and your debt was less than 30k, chances are you shouldn't be in an IVA.
Unfortunately your story is all too common, IVA`s are mis-sold on a large scale, and it`s clear from your post you are unaware of how these arrangements actually work.
You do not repay your IVA as you would say a conventional loan, instead your monthly payments go into a "pot" a separate bank account, opened by your IP. From that pot your IP takes their fee`s, plus any other costs associated with running your arrangement, these costs are always taken at regular intervals, costs will total a fixed amount, and the payments to your creditors are also taken at similar intervals as well.
These payments are called "disbursements" and by the time your IVA completes, your IP will have taken all necessary fee`s, interest, VAT, charges etc etc, and paid what is left to your creditors.
If your income increases, then so do your payments.
The post by fatbelly highlights the options open to you above.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
fatbelly said:The rules regarding redundancy payments should be in the agreement. Normally you are allowed to keep 6 months’ worth of your take-home pay from your redundancy money.
If you do find work within the six-month period, it’s likely that a further proportion of the redundancy funds will need to be paid into your IVA.
Your options will be to
- continue with the IVA, knowing that if your surplus income has risen you will be required to pay more into it
-stop paying, allow it to terminate and then take advice
fatbelly said:The rules regarding redundancy payments should be in the agreement. Normally you are allowed to keep 6 months’ worth of your take-home pay from your redundancy money.If you do find work within the six-month period, it’s likely that a further proportion of the redundancy funds will need to be paid into your IVA.
Your options will be to
- continue with the IVA, knowing that if your surplus income has risen you will be required to pay more into it
-stop paying, allow it to terminate and then take advice
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If you stop paying then after 6-12 months your IVA will be terminated and your creditors will write to you (eventually) to say how much you owe.
You may be surprised to find that not much has been paid off and the creditors are not the ones that went into the IVA as there are specialist firms that buy these debts.
Good sources of free advice are Citizens Advice, Stepchange and National Debtline1
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