www.iva.co.uk

Hi, we have just had our first annual statement from PayPlan and was shocked to see that we have only paid our creditors around £1000 when our monthly amount is £945. Is this in fees to PayPlan? We are considering going else where but are annoyed as we have been paying so much over the last year and it feels like for nothing. Also, we owe a lot of money, is it true some of it is written off or are you meant to pay back all of it? Thanks in advance, Sarah.

HI ssheppy1973 welcome to the forum.
The IP's fees are taken during the first year of your payments so it does seem you do not pay a lot in that year, it does balance out over the term of the IVA. I would not worry about fees etc, as the the creditors have agreed to them at the original creditor meeting. I believe that the fees are worth every penny to get the hassle from creditors stopped and giving me a way out from the debt I was in.
At the end of your payments any outstanding balance from your debts is written off, if you have an equity release clause in your proposal you could get extended by a year in leau of equitiy, which is what is happening to quite a few posters. I am lucky that I rent so our's is just the 60 payments then it ends. There is normally a few months added on to cover the admin but you dont make payments during that time if you have fulfilled you payment requirements but you will not recieve your completion certificate until all payments are passed to creditors etc.

It will be fees - don't worry, the creditors are happy to accept this and they will be paid. Whatever debt is left at the end of the IVA is written off.

You won't be able to move companies unfortunately - it is very difficult and expensive to do so.

Hi

An IVA will write off all of the debts that you can't afford to pay. All fees are agreed and authorised by your creditors so don't worry too much about them. Your Insolvency Practitioner has done a lot of work prior to the IVA being agreed unpaid so needs to receive some of their fees as soon as possible, hence most of the first years payments being used to cover fees.

Regards

Hi ssheppy1973 - I just want to confirm you are actually in an IVA and not a Debt Management plan?

If this money has largely been paid in fees, some firm knows more than I do about how to get a realistic fee for the work carried out!

There's probably a balance of funds still held in the IVA bank a/c - the annual report should detail this.

It does work - but your IP receives the majority of the first years payments - your creditors will start to see more of a return from year 2 onwards.
I do think that there will be a chunk of money left in the holding account and this will be distributed more next year.

Stay strong -IVA's are a second chance to start again, but they are not easy - you do need to work at them.

My maths is shocking but it looks to me like circa £11,000 was drawn down in fees. That does seem pretty steep considering creditors agree fees so you'd expect them to be roughly the same across all firms. There may be some money in the account which hasn't been distributed and sometimes money is held back for BR. Check your documents to see what fees were agreed and where the rest of the money is. They can be pretty baffling so don't worry about picking up the phone to your IP - I asked to be talked through my first report!! x