Hi There Can someone give me some guidance on IVA fees ?

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Mark.es

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Post by Mark.es » Mon Aug 15, 2011 11:56 am
Hi There

Can someone give me some guidance on how the IVA fees are calculated and what is the industry standard please?

I need to understand how fees are calculated as I feel my current arrangement, which is due to end in November this year, has fees that are calculated incorrectly or too much?

Is it correct that it is calculated at 15% of the monthly contributions ? How does this work and what is the industry standard?

Also, where can I get independant advice on reviewing the charges made and whether they are correct?

Appreciate your guidance

Thanks
 
 

kallis3

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Post by kallis3 » Mon Aug 15, 2011 12:00 pm
Hi and welcome to the forum.

My fees are 15% plus vat and I'm quite happy with that. The creditors are also happy with it otherwise they would have asked for modifications.

I don't think there is a standard as such but I'm sure one of the experts will advise.

Don't forget that your IP will have been supervising your IVA throughout the term and will need paying for their work.

Well done for almost completing.
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MelanieGiles

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Post by MelanieGiles » Mon Aug 15, 2011 12:13 pm
There are many different ways of charging fees in an IVA, but these days it is most usual for creditors to modify the basis to no more than 15% of realisations for the supervisory fees. There is also a set nominee fee which on average is around £1,700.
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Tina Shortland

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Post by Tina Shortland » Mon Aug 15, 2011 1:04 pm
Hi Mark - welcome to the forum.

Its always best to try and get asm uch clarification from your own IP as they are the ones who can answer why your arrangement is as it is.

If you feel you unhappy about something and you cannot resolve it with your IP you can find out who their regulatory body is and go to them for advice but usually it is best to try and get all your questions and conerns answered fom the company representing you.

Well done on almost being at the end of your IVA and good luck with everything afterwards!

Regards,
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Mark.es

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Post by Mark.es » Mon Aug 15, 2011 1:05 pm
Thanks for your response kallis and melanie, and yes two months to go, its been challenging that is for sure.

I will ask my supervisor a full breakdown of the fees as my calculations make it around 20%, so will challenge.

Example is as follows:

IVA terms requires £4500 (Excluding Set up and other Nominee Fees) in fees based on monthly contributions of £371, total over the 60 month period of £22260. If I calculate 15% of £22260, this amounts to be £3339. Based on this calculation, why was the fee set at £4500? Is this a correct assumption/ Calculation?

I need to understand what value is calculated at 15%, is it the sum excluding all fees?

Mark
 
 

Pandy

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Post by Pandy » Mon Aug 15, 2011 1:25 pm
Hi Mark,
Welcome to the forum, just wondering why you are so worried about the fees,your creditors and IP would have agreed to them at the start and as it is them that are paying them by not receiving more of your monthly payment.
It is not as if you are being asked to pay them on top of your contribution you would have paid the same amount whatever the fees were set at.
I always have a problem understanding why people get so worried about the fees, for what the IP's do they are worth every penny.
Last edited by Pandy on Mon Aug 15, 2011 1:26 pm, edited 1 time in total.
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Mark.es

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Post by Mark.es » Mon Aug 15, 2011 1:40 pm
Hi Pandy

Thanks for your response and I can not argue that most IP's are indeed worth the fees paid, but unfortunately, my IP was not in this category (wont go into detail).

Its not a question of being worried, its more to do with whether my IVA was handled ethically and within the guidlines of the relevant bodies so reviewing my whole IVA before it ends. Hence why I am asking clarifcation on how fees are calculated, nothing more.

Thanks

Mark
 
 

Tomoose

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Post by Tomoose » Mon Aug 15, 2011 3:39 pm
Fees are usually a percentage of all realisations, plus the nominees fee, plus some unrecoverable VAT which I don't understand.

I've seen figures of between 15-20% of realisations, plus £1500-£2000 for nominees fee as the norm.
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plasticdaft

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Post by plasticdaft » Mon Aug 15, 2011 3:45 pm
Mark,I cannot fathom out why so near the end of your IVA you are worried about the ethics surrounding your fees structure. It should have been laid on in writing before you signed up to anything. What do you gain by questioning what your IP charged?? The creditors obviously accepted it and given that its been running for years you too accepted it.

Paul
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plasticdaft

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Post by plasticdaft » Mon Aug 15, 2011 3:47 pm
It would benefit us all if you could name the IP and insolvency firm that is acting on your behalf,given that many people considering an IVA use this site for advice on who is good and who is not so good!!

Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
 
 

Mark.es

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Post by Mark.es » Mon Aug 15, 2011 3:58 pm
Thanks Tomoose, Melanie, Tina and Kallis, you have clarified my question.

I will not comment further the real reasons why I am questioning the fees so late and not share further details on IP or company.

Thanks for everyone for your assistance, wish I knew this site existed some time ago but looking forward to being debt free in a couple of months time :-)

Hope all who are in IVA's are debt free sooner the better

Best wishes

Mark
 
 

plasticdaft

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Post by plasticdaft » Mon Aug 15, 2011 4:02 pm
Mark,has someone approached you directly to tell you that your IVA has been mis-sold?

Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
 
 

Foggy

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Post by Foggy » Mon Aug 15, 2011 6:15 pm
Hi Mark. The bottom line is that the creditors agreed ( and probably set) the fees. This money comes out of the IVA pot, so, in effect it is the creditors who are paying, and it is they who agree the fees. Should you get a reduction in fees, this reduction rightly belongs to and should be paid over to the creditors.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
 
 

Mark.es

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Post by Mark.es » Mon Aug 15, 2011 6:40 pm
Hi Foggy and Plasticdaft

Thanks for your feedback.

Firstly, I will respond to Plasticdafts last point asking me whether someone has approached me about my IVA being mis sold, the answer is no. Plasticdaft, why did you ask?

Which leads me to foggys last point which is about the pot of money in my IVA, and how the fees and money are distributed. This prompted my questions in relation to the way the fees are calculated, I am not intersted in any refund, more to do with correct level of IP Fees, and what money is owed to the creditors.

Any dispute I have had with my IVA has been dealt with the IP directly and during the period there has been many administration errors on their part, so I am making sure that my IVA is distrubuted fairly.

Regards

Mark
 
 

Foggy

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Post by Foggy » Mon Aug 15, 2011 6:47 pm
I am sure the creditors will ensure they each get their fair share. Having said that, some, strangely, don't claim in the end, which means a larger share for the others.

By the way -- the 15% we bandy about these days only applies to "modern" proposals, as it is only recently the creditors have started tightenimng up on what they will allow in fees. I have seen some older IVA's allowing ( again agreed by the creditors) considerably more.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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