Hello, I hope you can help advise me. I have just completed year 2 of my IVA, the total amount I owed at the beginning was £20376.00. I have been paying £127 monthly into my arrangement through Hanover Insolvency for 2 years. Half last year's annual bonus was also surrendered, so to date I have paid £5586.00 into my arrangement. I have now been made redundant and I will receive a settlement of approx £50k after tax and Nics, as I had long service. So I have made an offer to my IVA Supervisor to pay off the full amount I originally owed to all my creditors and terminate my IVA early. I offered £14790.00 for a full and final settlement. Hanover have asked for £22,140. This would be a total amount paid by me of £27,726 on a debt of £20,376 over just 2 years = £7350 to Hanover Insolvency in fees and charges = 36% of the amount recovered for my creditors has been added on top of the full amount owed. Hanover have confirmed that creditors will not be paid any interest. I feel these charges are excessive, they also do not take into account that Hanover Insolvency will have no further work to do for the final 3 years and have already taken all their upfront fees and charges first. These charges are well in excess of the rate of statutory interest which is mentioned in most IVA website FAQs, which states Supervisors' charges should be around 8% of the amount recovered per annum.
Please can you let me know if Hanover's request for this amount is fair and if not, do I have any right to challenge or appeal it and how might I go about this?
The fees will have been agreed by the creditors at the outset and if they thought they were excessive they would have dropped them.
I have no idea if you can appeal these or not.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
The fees are not approved by you - they are approved by creditors and therefore effectively come out of their pockets/dividends (unless a full divi is being paid).
I've havent heard of 8% being an industry standard Supervisor fee. Most posters on here refer to a standard rate of their IPs at 15% on asset realisations - I wonder if the Forum rates quoted are out of date or perhaps you are looking at the 8% statutory interest figure?
I'm afraid to say that c£28k in total sounds about right to be fair.
If the usual interest (8% at 2 years) plus 15% costs were being applied then the total figure would be in the same region of c£27k.
Unfortunately you always owe the debt, plus any interest applied, plus costs.
In your case this means you will finish your IVA early and get to keep a large chunk of your redundancy pay.
I feel the only option you have to take this further is ask them for a breakdown of their fees and check whether they seem to be accurate. If you have any concerns you could lodge a complaint with them and take further if necessary.
