Am I right in assuming costs of about £6K ?

[skintali]

Hi all, I recently asked a question regarding an inheritance that I should receive in a few months, after my mum died last year, and am now resigned to it all going into the IVA. The good news is that I'm hoping it will reduce my remaining 3 years to about 18 months, by which time I will have paid back the entire £54k that I owed.

I can see that there are costs from CCCS of about £6k for the IVA, so I've assumed that I'll therefore need to pay back £60k in total. Is this correct?

Also, Melanie mentioned statutory interest. I've looked at my original IVA paperwork, and it does say the maximum to pay back is 100p in the £ plus statutory interest. It doesn't actually mention costs.

Just so I can get my head straight as to what I'll need to pay back, can anyone tell me how much statutory interest is? I've tried looking it up, and it says it's 8%, but is this going to be another 8% of my total debt, and is it per annum, so it'll be even more?

I've panicked myself now from thinking this could all be over more quickly than I had thought, to thinking it's going back to the days of having more and more interest added to the debt so that I'll never reach the end.

A little bit of clarity would be gratefully appreciated at this point!

Thanks

Ali

[Shining]

hi I'm sure Melanie will be along sometime soon to clarify and although I thought it was 8% unsure how this is calculated. x

[kallis3]

I think you're right with percentage Lesley. No idea how this is worked out though.

[Adam Davies]

Hi
The total should be the 54k plus approx 6k IP fees and 8% interest on the 54k each year, so 4320 per year.
Hope this helps
Regards

[skintali]

Oh, god, that's horrendous, and worse than I'd thought. It just seems that by paying off the full amount, I'm still penalised. I've had the IVA for just over 3 years, so will have about £13k of interest now on top of the amount I owe. I would probably at this point have been better with a dmp or something at the beginning. As I've been unlucky enough (bearing in mind my mum died) to get an inheritance, I'll end up paying the entire 100p in the £ plus costs plus interest, so all in all it'll be running still for the full 6 years, as it'll take me that long to pay the interest. At least I was hoping I'd knock the last 18 months off, to give me something to think it was worthwhile. The inheritance isn't anywhere near enough to pay off the entire debt, but would have allowed me to finish after about 4 and a half years, and not 6 years, as was the original proposal. With this interest it'll still be 6 years.

Bearing in mind my original proposal was accepted at about 50p in the £, and that the original debts were compounded with interest anyway (ie the original sums borrowed were quite small, but by the time I got so far in the mire I had to seek help they'd grown due to excessive interest) and now I'm going to have to pay the extortionate sum of 8% pa, when bank base rates are at an all time low.

Sometimes it just all seems to be against me and am seriously depressed now. I know many of you are in worse situations, and Yes, I'm fully aware I got myself into this, but it's just annoying that not only will I pay back the full sum ,but with costs, and huge interest, and will still have the really bad credit rating for the rest of my life etc.

Guess I've lost every which way here. Wish I'd never bothered in the first place. Should have just gone bankrupt and taken the hit.

[31101932]

Surely the interest would not be charged on the full £54K each year.

If you repay £10K in year 1 only £44K remains to charge interest on in year 2, with the amount reduced further in the following years.

[carole2662]

If you continue the IVA (even having paid in a lump sum) and pay back 100% do you still have to pay the interest, or when you have paid 100p in £ plus fees does the IVA stop.

[skintali]

Andy's response seemed to suggest it was interest on the full £54k for each year.

Either way, I've only paid off £18k in the first three years (income has increased, so amount I'm paying has gone up considerably, so on target now to repay about £40k total, before the inheritance, over 6 years).

Even if the interest goes down, as I've not paid that much off in the first 3 years, it's still going to be a huge sum, around £11k in interest.

[skintali]

I'm pretty certain it's 100p plus costs plus the statutory interest, so I'll have to keep paying beyond the 100% mark.

[kallis3]

It will be 100p in the pound plus the fees and statutory interest if it applies. You need to speak to your IP to clarify this.

[Adam Davies]

Hi
If the lump sum injection isn't enough to pay the original debts plus fees and interest then your monthly IVA will continue for the original term, was this five or six years ?
Your IP will be able to clarify the statutory interest question as they will have the full facts of your case.
Please let us know what they have to say
Regards

[leaKybrain]

oh hun, its such a shame that you are having to cope with this news on top of your loss. I really hope you manged to get this sorted. Def talk to your IP

[Foggy]

Check the specifics of your proposal re. interest with your IP. In my proposal it states, "For the avoidence of doubt statutory interest will not apply". I am hoping I never have to test it.

[kallis3]

I'm sure I don't have that in my proposal!

[skintali]

Thank you for all of your answers. As everyone says it always helps just to know others are there in similar situations.

In my proposal it says the maximum sum payable (by me) is 100p in the £ plus statutory interest. So, Andy would seem to be right when he says if the lump sum isn't sufficient to pay off the entire debt, regardless of how much I was due to pay, I'll continue to pay til the end of the 6 years. However, as the lump sum isn't sufficient to pay off the debt, will I continue to pay until the debt (and presumably IVA fees) are paid, which would be about 5 years, or will I have to continue to pay for the extra year which would then go towards this statutory interest thing?

It's a 6 year IVA, not 5 years.

I'll assume I'll have to keep going til the end. However, on a positive note, this month is the half way point, 36 months down, 36 to go!

Ali