I will be paying back 100% of my debt

[Niobe]

As far as a DMP goes - it could go on for years and there is no guarantee that interest and charges will be frozen. Your credit record will still be shot and even those who have been in an IVA have been able to get a mortgage again as has been evidenced on here by various posters.

You may not be able to pay it off sooner as creditors do not always freeze interest and, if you go through some companies, you will be paying fees as well.

You do not always pay interest on an IVA - just the fees to the company concerned.

[luluj]

Brilliant achievement well done

[Broke of London]

Franky - the OP's circumstances changed during the iva and he/she came into a lump sum and progressed their career which helped to achieve a 100% return. These couldn't have been predicted when the iva was advised and it's not fair to judge advice with the benefit of hindsight.

[Muggins]

I'm not judging anybody! I do not always feel that an iva is the best solution especially having read some of the posts on this forum! I know that whilst on a DMP interest charges can continue but I did actually state that some are frozen and I know that as I have friends who are on a DMP! Some companies do not charge and those were the ones I was referring to!
An iva is the right solution for some but nt all! I am only saying that I feel they are not always sold with the right intentions!!

[kazzy]

To assume that the debt would have been paid sooner without the IVA fees would be wrong - without knowing the full details of a person's circumstances we can't comment on what the best solution for any given individual is - which is why the advice given on the forum generally points to consulting a professional or the individual's IP (if they already have one).

[David.dh]

My IVA was, to my mind, the right solution for me to take.

A DMP proposal met with poor feedback from some of my Creditors and Bankruptcy was not a route that morally I was prepared to take - it was NOT the fault of my creditors that I lived beyond my financial means for such a long time and I felt I had to "do the right thing" and seek ways of paying back at least ALL the capital! Yes I escaped having to pay back huge amounts of interest but I do have to live for many years with the difficulty of having an IVA on my credit record, which maybe is some form of retribution!

Yes I was lucky that I have been able to end my IVA early and for that I am eternally grateful. The question of fee attibtuion gathered some very helpful comments here and again fro that I appreciate everyone who contributed to this.

[Tina Shortland]

Great news on your early completion David and excellent for the creditors that they received 100p/£ return.

Its funny how the perspective on things change after an event - now that your IVA is completed the focus is on the fees paid to get to that point however, had your circumstances not have changed and you were still stuck where you were when you first took the step of an IVA I am sure the fee paid would have felt different! Yours is a good story of a fortunate IVA for all, yes had you a crystal ball you would have probably taken and been advised on a different route - if only we all had a crystal ball!! I know of some cases where IPs work their nylons off in certain cases and end up with extremely low fees which don't always cover the costs involved.

I hope your job continues to go well and this is the start of a new phase for you - and once the IVA is lifted off the credit record it can become a distant memory.

Best wishes.

[Foggy]

"I know of some cases where IPs work their nylons off in certain cases "



....... and that's the guys

[Tina Shortland]

Ha Ha Ha - oh its good to have a giggle near the end of the day Thank you Foggy.

[David.dh]

I was not complaining that fees were payable to the IP, I understand that they do not operate a charity and deserve to be reimbursed for their expertise and time.

What I was trying to say was that even after paying my contracted 60 payments of £x plus the equity in my home (which I sold) I would STILL have to pay over £13k in fees, bonds etc.

So after 5 years I would NOT receive a Certificate of Completion as although my Creditors would have been paid according to contract I would not by then have paid my IP fees therefore my IVA would still be in operation.

I believed then, and this is my failing for not questioning it, that IP fees were payable by the Creditors and would be deducted from my IVA "fund" and not simply become an additional debt for me to clear.


I think fundamentally this is wrong and the solution is for IP fees (or at least a reasonable estimate of them, and interest too (although that becomes difficult to calculate due to decreasing capital debt over time) to be added up front to the debt and become part of the contracted monthly repayments.

Only then can you reasonably expect to be debt clear at the end of the (usual) 5 year period.

[Foggy]

Sorry David. You have lost me. In your initial post you stated that your IVA was to finish in September, 2 years early. If this is so, to that date you will have made 36 payments, not the 60 you refer to in your latest post.

In an IVA you contract to make 60 payments, which will vary according to your disposable income. The fees come out of this. You are in an unusual position of having made sufficient extra payments to pay off the total debt.

Take my case as an example (rounded figures for ease).

I owe in total £60,000. I have contracted to pay 60 x £480 (22,800).
Of this £1500 was Nominees fees and 15% of realisations (£4320)

So, I pay £22,800 .. fees are £5820 ... my creditors get £16980.

Anything I over pay (£6000 in year 1) simply increases the dividend (and fees), but does not reduce my committment to pay 60 x £480.

If I hit the debt and fees early ( roughly £70,500) then, and only then, does my responsibility to continue monthly payments cease.
(My proposal states that I am not obliged to pay statutory interest.)

[David.dh]

Yes my contract was a Standard IVA for 60 payments. Yes I am clearing it early. Yes fees are payable. The payments I have made to date already cover 100% of my debt and the vast majority of statutory interest.

BUT in your case the fees due are being deducted from the amount being paid back to your creditors! In my case I am paying back my full IVA (yes early) PLUS fees!

You see my confusion? Why am I due to pay the fees but in your case your creditors pay the fees?

Is it the act of paying back the IVA early ie the equivalent of 60 * monthly payment that moves the burden of fee from Creditor to Debtor?

Not sure I see how you reached a value of 70,500 as total debt and fees?

[Niobe]

The creditors do not pay the fees in an IVA - the debtor does and always has done.

[Foggy]

Hmmm -- this is really a table and a couple of bottles conversation -- difficult to convey on a forum

My value of £70,500 is my original total debt (£60,000) plus 15% agreed fee (£9,000) and Nominees fee (£1500). So, as soon as I start my IVA my TOTAL debt and fees is that £70,500. So my obligation doesn't end until I have paid that amount, or the IVA runs it's contractual course.

It's not a case of paying the debt and THEN the fees --- from the start they are lumped together.

So, in your case, you haven't yet hit the total amount owed, until the fees are covered. You are not paying them as extra.

Apologies for not being too clear on trying to get what I mean across --- youngster decided 3 am was getting up time this morning, and I am a little foggier than usual !!

[Muggins]

I'm glad everybody has misunderstood u David because they did me aswell!! I know exactly where you are coming from and you could say you are almost penalised for clearing all of your debt whether it be early or not! I am sorry if people felt that I was being judgemental but I can assure you that was not the case! I am merely trying to say that iva's are not always the appropriate solution and that maybe why there is a large failure rate! They are good for alot of people and that is fantastic!!