Hello all,
Myself and my wife need your help and advise with regards to our IVA.
In April of 2009 we took out an IVA Simple Debt Solutions Ltd because of increasing debts caused by the financial crisis and our selfes.
The total debt was £18965 and we wanted to have the debt resolved.
Initially we had to pay the IVA the best part of £1000 and it was not until i asked them what was going on that they actually started the ball rolling with our creditors.
On July the 9th an agreement was made at a creditors meeting for the sum of £14890 to be repaid over 5yrs at £250 per month( which we agreed but have still not to this date signed a contract ) We have just had our annual review and our 2 year Receipts and Payments statement.
Firstly the IVA want to put up our contribution pm to £378- Which is totally unrealistic
Secondly when i started to read their expenditure i noticed some rather concerning facts.
In the 2 yrs we have paid them £6000 which in my eyes only leaves 8.9k remaining of the agreed debt.
However they have only paid the debtors £2680 and the rest has all been used up on so called fees for the IVA company, ( so low and behold if you work out the the extra £128 pm this equates to the money they have used up for the short fall on the total debt and if they are doing this now then where and when does it stop. )
I have been advised to speak with the CCCS or to the financial Ombudsman but i just do not know what to do now.
Firstly get out your proposal and it mentions fees (and how much) if you end up paying back 100% of totally debt then you should only be concerned about the fees - otherwise it is the creditors who agree to them
Sounds like you used a referral firm (they do the paperwork at cost) then refer you on.
IVA is not a fixed payment and is based on disposable income - so can go up or down.
It will always be responsible for the total debt/fees and interest until the IVA finishes
Hello and welcome. There is no contract to sign to ratify your agreement. The key document is the Proposal which was put to your creditors at that meeting, which would have been read, agreed and signed by you prior to presentation.
You are tied to the terms therein. I would suggest you have a good read and see what it says regarding fees etc. You will find that the fees will have been agreed with the creditors and are rightly due from your payments. The fees will be split into two categories: Nominees fees ( for preparing the paperwork) and Supervisors fees (for ongoing work). Quite often the Nominees fees are covered by the first few months payments, thereafter the supervisors fees come out as a percentage of the ongoing payments.
You will also see reference to increasing your payments should your disposable income go up ( pay rise ). As well as this you should be required to hand over 50% of overtime and bonus payments, as well as all windfalls ( unearned income) over £500.
So, have a good read and please come back with any questions.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I think that if you do have a complaint - it should be more directed at why things were not fully explained to you from the outset, rather than the IVA itself which appears to be running along in the way it was intended and as agreed by creditors.
Firstly, you would have had to have signed the IVA proposals which would have clearly stated the terms of the agreement you were intending to enter into - and this would have covered things like the level of fees to be charged, the frequency of distributions to creditors and the annual review process. It sounds to me as if there may have been little contact with your IP throughout the processs to prepare and present the proposals, and that things are confusing you now which should have been properly explained before you entered into the contract.
For your IP to want to increase your payments, this must be due to the fact that your income has increased or your expenditure reduced or a combination of both. Why not ask to speak with your IP directly to have all of these issued ironed out in the first instance.
Thank you all for your prompt responses,
i have read all the relevant paperwork again and it confirms what some of you have said with regards to fees.
I have subsequently decided to cancel our IVA as my Father may be in a position to offer a lump some to pay of all creditors so i will be going to the CCCS to let them mediate the settlement- ( unless this is a bad choice then please advise.)
Once again many thanks for your advice.
Last edited by mkemccall on Sun Sep 18, 2011 3:55 pm, edited 1 time in total.
You may find the total required outside the IVA is greater than you think - as creditors may begin to add interest - any money you have paid may be likely to be used as fees.
Once the IVA ceases the creditors have NO legal obligation to accept reduced offers.
I presume that you are talking of making a full and final offer?
The only way you can cancel the IVA is to either let it fail or do a full and final.
You should pay as near to the original dividend as possible and make sure that your IP knows this is only available for a full and final offer.
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
Hi again, Michael. I am afraid you cannot just "cancel" your IVA. To get out of the present arrangement you will have to let it fail ( by missing three payments). But then you will be back to square one with your creditors and a lot of money will have gone down the drain. For a start the fees will still have to be paid and secondly, the creditors will charge outstanding interest, backdated to the start of the IVA.
If your Father might be able to offer a lump sum, it would be better to go to your current IP to negitiate the F&F, taking into account monies paid so far. You will be looking to pay a sum that would bring you up to what you would have paid under the terms of your IVA ( 60 x monthly payment less what has been paid so far).
You will need to empahasise that this sum is only available to settle the IVA and, if refused by the creditors it will be withdrawn. You also need to make a compelling case for your IP to put to the creditors to end the IVA early.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
As Kallis has mentioned a F+F settlement /or let it fail - its worth remembering that regardless of what option is choosen - The IVA will show on your credit report for a totally of six years and will impact on any application for further credit
As stated before, Many thanks for all your inputs with regards to our current position.
I have had time to read over your comments and look into what has been stated and thank you all for your guidance with regards to any actions we should take.
Therefore we will stay on our current course of repayments with the IVA and hope for a sum of funds from my father which i can put forward to our IP and creditors.
I just wish i had known about this forum 2 yrs ago when we panicked about debts,Oh well as a Wise Man Once Said "We Learn From Our Mistakes"
Thank you all again for your time and patience.
Best regards Michael
Last edited by mkemccall on Tue Sep 20, 2011 10:18 pm, edited 1 time in total.
Most definatley you should offer the lump sum settlement through the medium of the current IVA. This will be far simpler for you than approaching individual creditors directly one the IVA has failed - which seems absolutely unecessary if you have the opportunity of third party funding.
