About to jump in

[Frank.ff]

Hi, I posted in here a while ago when I first knew that I was insolvent. I have lasted a year by shuffling and saving, but I now understand that an IVA is the best and only way forward.

I serviced all of my debts and paid the HMRC, so what's wrong? Well it was a slow spiral of decline as I serviced all my debts by taking money I should save for the tax man.

In the previous years when credit was cheap and companies threw money at me, I simply got a loan for the tax. Thinking back now it is truly shocking and I am deeply ashamed that I didn't see this coming until it was too late.

Long story short that I hope may be familiar with some people here, more loans, less available money, more debt etc.

There is now no money although I can pay the tax man in January.

I choke when I say this out loud but have £110,000 debt of which £75,000 is my own and £35,000 my wife's.

I have had a few telephone calls with IVA companies and had a couple of meetings. I think I now understand what an IVA is, the implications and where I fit in with one.

My last meeting a was with a very nice lady who took lots of information, I'm now in the process of putting together some data, primarily to decided IVA values and to determine if I should enter an IVA on my own or have one with my wife.

I wanted to write all this, to help me more that anything come to terms with my situation and I hope I can find good pertinent advice and support.

One of my questions is to do with the cost of an IVA. In my last meeting the lady said it would cost £5000 to set up and then approximately £5000 per year of the IVA. This seems a lot, but if it is a fair price then so be it!

I can afford to pay £1500 per month into an IVA, but I just do not understand how the figures work. Over 5 years that's £90,000, but the company think it will cost a total of £30,000, meaning my debtors would only get £60,000 and that is only 60-70%.

I'm sorry for the wall of text, but I needed to get it out into the open. I understand I have done things wrong, it is totally my fault. Help!

[Car1e]

It's ok, don't panic, typing that post is probably a huge step for you in coming to terms with your debt and you are not alone! There are fees of course for setting up an IVA but these will be included within your proposal. I wish you well, we are all at fault but hey, we are human.

[Foggy]

Hello and welcome. £5000 to set up seems high in this day and age. However this would have to be agreed with the creditors and they tend to try to reduce fees. The supervisory fee is generally negotiated by the creditors to 15% of your payments, after the setting up fee has been paid.

60-70% would be an excellent return for the creditors. I have seen as low as 9% accepted and the average is around 25%.

[Car1e]

That's good advice Foggy. I would confirm that in our own particular case our IP's fees were reduced.

[plasticdaft]

£30,000 is a ridiculous amount to set up and supervise(5k set up plus 5 years at 5k).

Go elsewhere!! Try Melanie Giles company(she posts on here),in fact when she sees this thread and the costs that are quoted she may have an opinion!!!

[Frank.ff]

Thanks for the quick posts guys, it's very much appreciated. I must have reread my post 6 times before posting it and in the end I just thought I had to do it. I'll look forward to the day crews posts if there are any and take any and all advice going.

Thanks again.

[kallis3]

Welcome from me as well.

Don't fret about how much you owe - we've all been there and your debt is no worse than most of us.

I do agree that you need to speak to one or two companies before making a decision as to who you feel most comfortable with.

[kazzafunk]

Hi Frank - you're doing the right thing. Don't fret about the return to creditors. If this is all you can afford (and it is a good dividend, believe me!) then creditors are likely to accept it.

I would definitely speak to 2 or 3 companies to make sure you are going with someone you can trust and work with for 5 or 6 years.

If you go to www.iva.com and look at some of the companies on there, also as mentioned above, Melanie Giles is an excellent contributor to this forum. We are with McCambridge Duffy who have been brilliant.

Who have you spoken to so far? Do you have to pay any fees upfront? I never paid a penny up front and wouldn't have done!

[kallis3]

As regards a bank account, the Co-op come highly recommended for their cashminder account. It can only be opened over the phone or in a branch though.

Don't touch HSBC or First Direct with a barge pole as they will close your account even if they're not a creditor.

Make sure that you allow for everything when doing your income and expenditure - haircuts, dental fees, prescriptions, work and/or school meals. A lot of people don't think about the incidentals.

[plasticdaft]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Icecream Sandwich

Hi
Get this sorted asap is best advice Have a read through the main debt posts you see who is getting recommended as your IVA company and how other people have rated the service and who are posting in here
Do not pay any set up fees its free to you and the costs are paid in during yuor 5 years of IVA in there fees
Nobody knows how much you will pay back until you speak with the Iva company
Work out some figures that you can live on for the next 5 years
Ball park figure say 50% per month the other 50% to Iva then you have an idea if you can manage
You will most likely get a monthly payment of 40% your salary
Get a new bank account set up now As you need a fresh account for your IVA thats nothing to do with who you owe money
then you are on the way
good luck you will be fine

This isnt particularly helpful as IVA's are very individual,so to quote a figure is just wrong. An IVA is based on whats affordable for the individual so lets not put people off by saying they will be paying 40% of their salary into one.

Paul[:)]

[kallis3]

Quite agree Paul - we all pay varying amounts depending upon our income and expenditure.

[Firefox]

Hi,

I was in an almost identical situation, my debt was over £100K so I completely understand where you are at with this. The set up fees seem very high, maybe it reflects the complexity of the case, in any event as many posters have said the final figure for fees is a negotiation between your creditors so if they are excessive then the creditors will ensure that they are capped. the return to creditors of 60 - 70% (ours was 26%)is huge so my advice would be to double check your figures on your I&E to make sure that your repayment is affordable. The tendency at the start is to feel shamed into understating your expenditure but in the long run you will find servicing the IVA payments could become a struggle so just make sure you have buttoned down the figures.

Best of luck & keep us posted

[Rosepetal]

facing the debt is the biggest step to sorting things out,you can experience a whole range of emotions - well done on facing it.

our IP was Melanie Giles,her team are very good.

a realistic income/expenditure is now vital to you. don't panic & jump with the first IP you talk to.

post any concerns,no ? is considered silly,you'll get lots of support here.
let us know how you get on[:)]

[kallis3]

Advice is fine but you cannot say how much people will be paying towards an IVA without knowing their circumstances.

Each person has their own expenses, doesn't matter what the average is.

[Daveyboi]

There are so many variables for example people with dependents, people caring for their loved ones, on low wages, high wages, self employed, fluctuating wages, fluctuating bonuses. It is impossible to give a ballpark figure on your likely payments.

Income and expenditure is to be completed to show what you ACTUALLY spend on essential bills each month. A way to do this if you are struggling is to monitor one month what you spend out on and note it all down including whether its essential expenditure or luxury. Look at previous bank statements for food bills for the family or for yourself dependent on your situation, your council tax, household bills, sky, broadband, fuel charges, travel costs to work, childcare costs, clothing for children and yourself, health expenditure such as dental hygiene, contact lenses or glasses and whatever else you spend out on. Some companies include a contingency fund for miscellaneous expenditure whether that be for birthdays, Christmas, new shoes etc. Write it all down open and honestly onto the form and then the IP will be able to see your income and deduct your expenditure that is allowed i.e not considered an allowed luxury. At this stage you have a choice of accepting that you honestly believe you could live within those financial amounts and if so you can opt to go forward to a creditors meeting with the view for them to accept the IVA. If at the meeting they wish to reduce any allowances or take anything out they consider a luxury you will be contacted and again you will have the choice of agreeing or disagreeing with the new proposal. As some have stated before only agree if you genuinely believe you and your family can survive on the new allowances set. Starting an IVA on low allowances to enhance your chance of acceptance only hurts yourself in the long run as you will struggle and potentially the IVA will fail and you will be back to square one again. Be open and totally truthful to yourself when completing the I&E and whether the creditors get 9% back or 99% back as long as its agreed by 75% or more of the creditors and yourself at realistic amounts you will have a much better likelyhood of seeing the IVA to completion.

I wish you the best of luck and sincerely hope you find a route soon to go down because after the decision is made you feel a whole lot better within yourself and can go back to some form of normality in every day life again which is one of the best feelings EVER!!!