www.iva.co.uk

Hi, I'm wondering if I can get some advice - I apologise for how long this explanation might be!
I have had an IVA for 3 years, originally taken out with a wonderful company, the debt/company was bought by another just over a year ago. New company is rubbish - no income check for 2 years now (company change was just before it was due), they don't answer emails often and when they do, it's a text book answer.
Original debts were £14,500, I have paid £3000 although I know the first £1000 would have been Nominee Fees (set out in my original proposal) and 15% Supervisor fees. My dad died last Christmas and probate has just about gone through now so should all be finalised pretty soon. I asked the IP for a figure for paying everything off and the figure they have given (after 5 months of having to keep asking them constantly) is £21,300!!!!! I have asked for a breakdown as I think that what must amount to £8000 in Fees is absolutely ridiculous. They have stopped answering my emails again, I want to know how these fees are calculated - all she said is supervisor fees, variation fees and interest. Now I know my supervisor Fee rate is 15% on my proposal and it states variation fee is set at £400. What are they taking 15% of andinterest on - how much the inheritance is? Why should it matter how much I'm getting as long as I can pay it off? Why should they be getting a % of my Dad's money way over what I owe? I could understand a % of the debts but not a % of my inheritance! Would I be any better off cancelling the direct debit, telling the IP so and just calling my creditors and paying them directly, then the IP can deal with me on just the fees?
I think it's fishy the new IP won't tell me a breakdown of how it's calculated and they have done nothing, all work was done by my original IP. Just after information on how it all works and what I can do.

Fees, in a nutshell, will be the nominees fee, for preparing the IVA, typically around £1750, the ongoing Supervisors fee of, as you say in this case, 15% of anything you pay in. Added to this are any variation fees, for additional meetings and disbursements, typically £500 - £1,000.
So to settle an IVA in full you need to pay these fees, plus the balance of the remaining full debt. You might also be required to pay statutory interest at 8% per annum simple, calculated on the reducing daily balance of the debt.
So --- on the back of a cigarette packet guestimate on a debt of £14500 at 3 years:

Nominees fee £1750
Supervisors fee on £14,500 @ 15% is £2175
Disbursements, say, £1000
Statutory interest --- around 1160 for three years, so, £3480
Debt £14,500

Total to clear everything £ 22,905 Less £3000 already paid = £ 19905

If you throw VAT in on their fees, it will be close to their figures.

Oftentimes creditors are asked to vary the agreement by forgiving the need to pay statutory interest. They also often agree, so, if they agree this time (no guarantees) it could save you over £3k. Worth as ask.

If you cancel the DD and deal with creditors outside of the IVA they will add back in contractual interest ( far more than statutory interest ) as well as possible charges and the IP will then become another creditor after you for their money.

Thank you for that explanation, I understand more now.
So my original proposal stated that Nominee fee is the first 5 monthly payments or £1000, whichever is greater, so it would have been £1000.
Sorry, what are disbursements? The contact at my IP didn't mention VAT, only Supervisor Fee, Variation fee (no additional meetings have ever been booked since the IVA started and I don't see why it would have to as we are not varying the payments, I'm paying them all off in full. Proposal stated fixed at £400 anyway) and Statutory Interest.
She was very adamant I tell her how much money I had coming 'so the settlement figure could be calculated', that's why I feel she's working it out in some way according to how much money I'm getting. I gave her a rough idea, a few thousand either way as I'm not sure and she said this is the rough settlement figure, get back to us when you have an exact figure so I think they are working something out based on how much I'm getting, which seems wrong.
Is it not odd that they do not seem to want to give me a breakdown of how it has been worked out? I feel they are trying to add money on and rip me off. I would not have blinked an eyelid if they'd have said 18 or 19k, I just can't see where the figure is coming from without them breaking it down for me and they don't seem to want to, which makes me think they aren't being honest!

Also, how do I go about asking if they will knock off the statutory interest? Just ask 'will you write off the statutory interest'?

Disbursements will cover the cost to the IP for anything used in the running of the IVA, over and above the time paid for by the 15% fee. Sometimes I feel that the IPs can be quite 'inventive' with these and will ask for reimbursement of licences for software used to run your account, insurances and all sorts of, possibly, mythical figures.

Paying an IVA off early is a variation of the agreement and will need the agreement of the creditors -- even though it is unlikely that they would refuse and so would really need to be asked --- but it is a change to the agreement --- you can simply ask the IP to request that statutory interest be excluded from the arrangement and they should deal with it at this variation meeting.

I imagine, and this is only a guess, that they want to know the amount so that they are sure it will actually cover a settlement. But, like you, otherwise do not understand why they need exact figures.

Foggy - you have been wonderfully helpful, huge thanks to you for all of your help getting me to understand more. Fair enough re variation meeting- my proposal says variation fee fixed at £400 so not a massive amount of money considering what I'm looking at paying!! I guess I just have to wait for them to come back to me with a breakdown.

Thanks again, take care

Good luck - hope it all works out for you.

Let us know how you get on and good luck from me as well.