Iva fees

beccy26

My husband and myself went into an iva just over 5 years ago we have now made all our payments and are at the stage where we need to release equity from our house, but unfortunately last year my husbands father passed away he was left some money, which we have informed the iva company of, so the amount of my husbands original debt was just over £18000 he has paid £5100 over the past 5 years and now they want just over £16000 of the inheritance he got he was told that would be the end of his iva but are now saying they want another £4000 can they do this? And how much is a reasonable amount of fees? Is there anything we can do. My iva cannot move forward until this is sorted. Thanks 

Grumpelstiltskin

Can I ask why your husband entered an IVA for a debt of £18.000?
Was there a property to protect?

Problem is that the fees can be very large as you have found out now.

beccy26

My debt was £22000 and together we were struggling we were advised an iva was the best solution we have a mortgage and 4 kids 

Grumpelstiltskin

Who advised you? One of the debt free charities or an IVA company?

OK With a mortgage it could have been the best solution but did you consider a DMP?

beccy26

to be honest your questions are irrelevant now as we are at the end I just wanted advice about the question I asked?

Grumpelstiltskin

The answer is it depends what you agreed to when you signed the original agreement.

IVA companies want as much as possible in fees from you so you need to read your original agreement.

sourcrates

That sounds about right, if you have a windfall during your arrangement, the majority of it must be paid to the benefit of your creditors, so he will end up paying back the full amount of the original debt, plus any additional fee`s/charges/interest/VAT etc etc.

The £5100 already paid, probably won`t cover the IP`s fees, so the 20k they are asking for will pay off the indebtedness, as well as the fee`s.

It will all be listed in the paperwork they sent you, granted its about 100 pages long, but everything is listed, what they can charge, and take in windfall payments etc.

Ask for a breakdown of charges if you remain unhappy, but it sounds about right to me.

RAS

Sadly, probably about right.

There are a lot of debt companies who earn their money encouraging people to take out IVAs because their own income comes from the OR fees or referral fees. They encourage you with huge write offs, but if you get a windfall or a higher salary they can demand 100% of the debt PLUS the fees, which are often £9k ish. The devils in the detail in the contract.

Debt charities would have given you the option of a DMP, which is fee-free but includes paying back the whole debt, eventually. 

fatbelly

beccy26 said:

My husband and myself went into an iva just over 5 years ago we have now made all our payments and are at the stage where we need to release equity from our house, but unfortunately last year my husbands father passed away he was left some money, which we have informed the iva company of, so the amount of my husbands original debt was just over £18000 he has paid £5100 over the past 5 years and now they want just over £16000 of the inheritance he got he was told that would be the end of his iva but are now saying they want another £4000 can they do this? And how much is a reasonable amount of fees? Is there anything we can do. My iva cannot move forward until this is sorted. Thanks 

Yes, that sounds about right.

One of the downsides of an IVA is that if you come into a substantial windfall you will end up paying more than the value of the debts, due to the IP fees