IVA - my story

x6IT32

Around three years ago, after experiencing some financial difficulties, I applied for an IVA. At the time, my debts totalled around £6,500.

My monthly payments are £385. After three years, I had already repaid almost £7,000 to my IVA.

I asked my IVA company - around 7 days ago - how much is left to pay. They replied: It doesn't matter; I need to pay everything for five years because that's the IVA contract. Is that true? Does that mean that in 5 years I will have paid back over £12k to my IVA, double what I owe? 

Can I pay it off early?

fatbelly

Yes, though it sounds like you will need a lump sum of at least 5k.

It also sounds like you have been royally ripped off. 60 x £385 = £23100

There's no downside to a complaint, you know.

https://debtcamel.co.uk/complaint-iva/

ManyWays

Is the 385 a month affordable? 
An IVA will finish early when you have repaid the debts in full plus the IVA fees. I suggest you ask your IVA firm when that point will be. 

x6IT32

They increase more and more after the annual review - It isn't affordable at all. Sometimes I struggle to afford food shopping or clothes.

The first year, I paid £85 per month, which was very reasonable. Following the annual review, they increased to £192, and next annual review - they increased to £385. 

I have now checked the annual review report and found the following under 'Fees and costs':



I have checked all my bank statements, and so far I have paid back £7,320 to my IVA and I have left one year and 10 months. 

ManyWays

I think you should be asking for a review of the monthly payments, go into this with a list of all your expenses that have gone up over the years. Make a formal complaint to the IVA firm that these have not been properly taken into account at the annual reviews.

x6IT32

They created an income and expenditure statement. They told me that the maximum amount for groceries is £456. I proof to them with bank statement like I’m spending more money for food, but they said no.

ManyWays

how many people is that for? 

x6IT32

Just me, but sometimes is hard, I don’t have very good wages and almost one week of work is going to IVA.

ManyWays

I rarely say this, but I think you should be able to reduce that food bill.  Are you mainly buying ready meals? 

sourcrates

Regretfully you had very bad advice, IVA`s are ideally meant for homeowners with debts over 50k who cannot go bankrupt, and are never suitable for amounts under 10k in any circumstances.

I really would follow fatbelly`s advice and lodge a formal written complaint, as you where in no way suitable for this form of insolvency, the IP is just milking you for their fees here.