Annoyed!!!!

[griffingirl]

I must say, when I first entered into an IVA I thought, as per the way they are commonly advertised that it was a way of paying one payment per month for 5 years and then the nightmare is over. A year after my IVA started I am getting demands for hideous sums of extra money (600) months after the sum was earned, pay slips etc, and so i am expected to keep money aside until it is asked for, which, on such tight budgets as i am forced to run is very hard to manage, and when i approach my ip about the fact i am needing to move out of home i am not really helped at all, just told i will have to keep paying my full payment despite the fact that i completed a fresh income and expenditure form very accuretly which showed i needed to pay 50 per month less than i was, but they override it and say i can pay the full amount so where exactly is that expected to come from?! is there any way you can change IP? mine is useless. took 6 months to get process my iva, nothing was really explained to me, just given a big contract to sign and now a year into it i am finding all these extra loopholes that make my life a living hell! help!

[ClearDebt]

Can you say why you are being asked for extra money? Does it represent additional earnings? Can you also say why your circumstances are changing and leaving you £50 short? (If this is a voluntary change in your lifestyle it is very unlikely you will be able to negotiate a variation. If this has been forced on you, there is more of a chance you could reduce your payments - as long as you can still return more to your creditors than in bankruptcy).

Can I remind you of the replies to an earlier query of yours which may be relevant:

http://www.iva-info-uk.org.uk/forum/top ... PIC_ID=171

6 months does seem a while to process an IVA. Did you have a face to face meeting with an IP or suitably qualified person to discuss your rights and responsibilities under the arrangement?


ClearDebt
www.cleardebt.co.uk

[neverending]

Hi
Usually any extra that you earn ,above your declared amount when you took out the IVA ,you will have to pay 50% to your creditors.
If your income has fallen or your travelling expenses for work have increased then this will normally be a good reason to ask for a reduced payment and is likely to be agreed by your creditors.
Speak to your IP cuz if they fail your IVA then what you have paid in will almost certainly all go to the IP and you will be back to square one and probably declared bankrupt.

[Oliver]

neverending is absolutely right, if in doubt ask the ip that is handling your case.

You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[iva experts]

It would be interesting to know whether or not you were offered and attended a face to face meeting with your IP Griffingirl as you seem to be unsure and confused about the Terms and Conditions of your IVA.
It is always highly recommendable to attend a face to face meeting with your IP as there are many intricate terms and conditions associated with an IVA.


Hope this information is of use

Regards. IVA Experts

[ClearDebt]

Face-to-face meetings are something I'd like to see all the experts here stress are essential. Not only does the Insolvency Practices Council consistently recommend them as best practice, but we have found that they improve understanding, provide a quality of advice check which helps to ensure the only IVAs we do are those that really should be IVAs and, we think they improve quality for the creditors too: we've had a couple of multiple no-shows, which we believe shows the debtor is unlikely to stick to the IVA if they get it.

Regards

Andrew



ClearDebt
www.cleardebt.co.uk

[iva experts]

I totally concur with ClearDebt. As I have said previously Face to Face meetings are essential. I too would be dubious of someone's ability to commit to an IVA if they were reluctant to make the time and effort for a face to face meeting which will potentially have an impact on their lives for the next 5 years.

Hope this information is of use

Regards. IVA Experts

[Oliver]

Hi Giffingirl

Some very valid points have been made here:

1. If your income includes bonuses and overtime, genarally speaking you would expect a standard clause within your IVA which states that 50% of all such extra income should be paid into your IVA in addition to your reglar payments. It is up to you to inform your IP if and when you are paid such bonuses and you should make it your business to pay this each month into your IVA. That way, there is no confusion and no issue with budgeting.

2. You say that you need to move out of home. Unfortunatley, if the move means that your living expenses are higher, then it will be most unusual for your IP to let you simple reduce your IVA payments. They would only accommodate this if the move was basically life or death. If not, the way creditors will see it is that you have simply moved to make life better for yourself. As such, why should you pay less when you owe them all of that money.....

3. Meetin the IP - I would be interested if you have had the opportunity to do this? I agree with the other experts on the forum, a face to face meeting is always very useful as it helps galvernise your understanding of the IVA and what it will mean. If you did not do this, I can see why ou are having some of the problems your are now facing.

Having said this, I have recently come across an individual who had a face to face meeting wuith their IP and still did not fully understand what they were getting into......

You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[neverending]

James is right that a face to face meeting is no guarantee that an IVA will be understood.This,I believe ,is because a person with debts that they cannot pay is looking for a solution and will turn towards the first sympathetic ear that they come across.Only a few will look deeply into it and consult several IPs.This is why there is a strong need for self regulation and standard fees across the board.
I personally believe in upfront fees because this would make people look at exactly what they are getting fot there money and ensure that people are commited to the five year term.
I know that this will go against many opinions on this site !!

[ClearDebt]

What do you mean by upfront fees neverending?

I'm very happy to be upfront about our fees - our website quite clearly states what we charge (we are n a minority of IVA providers in doing this).

However, charging fees upfront is quite a different thing - the debtor is in dire straits anyway and can rarely afford extra pressure on cashflow and, if the debtor does anything other than pay an upfront fee from cash then s/he might get into real trouble. There is an argument that if you paid a fee on credit, knowing that you had no intention of paying it all back - because you are going into an IVA - then it is as much theft as filling your tank at a petrol station and driving away, Tricky stuff.

There are people who undoubtedly find it difficult to understand all their rights and responsibilities under an IVA, despite having a face to face meeting - but it is definitely the insolvency practitioner's responsibility to try to ensure that the appropriate lightbulbs go on inside debtors' heads - and IPs are required to keep notes of the meeting so that they can be shown to have carried out this duty.

ClearDebt
www.cleardebt.co.uk

[neverending]

I would like to see a modest upfront fee paid by the debtor to start the IVA process.As I stated in my previous post it would ensure that people would look deeper into what is in essence a life changing decision and looking at some of the posts on this site not everybody feels that they have done the correct thing.
For example if you take a mortgage out etc you have to ,in nearly all cases,pay upfront[valuation fees etc] Where as at present nearly all IPs do not charge any fees upfront.Surely this makes it a bit too easy to go down the IVA road and regret it later.There is no doubt that there are still many IPs who do not give best advice and are really just interested in the fees that they will earn.
You make a good point with regard to funding the initial fee via credit but I am sure that most people considering an IVA are not down to their last penny as they will have to be working to consider an IVA in the first place.
Something HAS to change in the IVA industry.In my view there are a mixture of bona fide companies [like your good self] and companies that are clearly abusing the vulnerable.
Does any one know of an instance where an IP has been struck off or criticised by the Insolvency Practitioners Association or similar ?

[ClearDebt]

Insolvency Practitioners are regularly disciplined, fined, made subject to rigourous supervision and even struck off. They are closely regulated and also subject to intense scrutiny, largely because they are the only "winners" in situations where, often, everyone else (debtors and creditors) is losing something. I suspect people in IVAs may complain less often about sharp practice than they should, simply because they are not aware of the process - a good guide can be found here:
http://www.insolvency.gov.uk/howtocompl ... inssip.htm.

It is our experience that many debtors do come to us at a point in their crisis where an upfront fee is difficult to afford (that's why they need the IVA) - so, no, I'm not in favour of them at all. I agree people need to go into an IVA with their eyes wide open - and I'm desparately against the attempts some larger providers are making to remove the advice that a face-to-face meeting should take place.

Necessitating an upfront fee might also make it more difficult to make IVAs available to the many thousands of lower debt and lower income debtors who are currently languishig in unsuitable debt management plans, so - no, I'm not in favour.

All the best,

Andrew

ClearDebt
www.cleardebt.co.uk

[Oliver]

Interesting discussion about up front fees.

I think that there is something to be said for getting committment from the client. If money does not change hands before the IVA is in place, then I believe there is a risk that individuals do not really have the chance to test the water and proove to themselves that they can afford the ongoing IVA payments. I have heard of a lot of instances where people go into IVAs thinking that they can afford the monthly payments when they plainly can not. The acgreement is then an early failure which helps no-one.

As Andrew says, the problem is that most people do not have the money to pay an upfront fee. However, I think we can all agree that they do have disposable income. As such, perhaps asking them to pay a disposable income payment up front could be workable. Clearly if the IVA is not accepted by the creditors, this would have to be refunded.

This would at least give the debtor the oppotunity to try out the payment regime and get a feel for whether they can make their IVA payments or not

You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[ClearDebt]

I think this raises a couple of interesting points. The first is that I don't think we find many cases where an upfront fee would be easily paid, before the interest freeze and reduced payment regime of an IVA is actually in place. The second thing is a related miss-selling issue which we think may be creeping into the IVA marketplace - I've said that's second but I'll actually deal with that in more detail below because, even more closely related to the issue of having cash to pay an upfront fee is the point James acutely makes about long-term affordability of the IVA payments.

James, you are right - this is an issue but, in our view it only becomes one when either the insolvency practitioner is less than competent or the debtor is less thn honest, either with the IP or with him/herself: The surplus paid into the IVA should be affordable - and creditor pressure to squeeze the last drop out of the debtor (and you are probably finding, like us, that the creditors are getting tougher) should be resisted. If the debtor is honest about his circumstances and if we calculate it properly, the IVA should be affordable. Actually, given that we should ensure the debtor is being honest with themselves, its probably mostly the fault of the IVA firms when an arrangement is unrealistic.

ClearDebt
www.cleardebt.co.uk

[ClearDebt]

Sorry - I meant to mention that miss-selling issue. Back at the meeting for the IVA community KPMG hosted in Birmingham a few months ago a number of creditors complained about IVA firms (no idea who) who were calculating the surplus quite generously and then asking the debtor to stop paying creditors and start paying the surplus to the IVA firmor its' broker.

Several months would pass during which the IVA firm would not inform creditors that an IVA was in the offing. Several payments would go into the IP's account.

Then the poor debtor gets a call: "We are now in a position to do your IVA, but sadly the payment will need to be £XX greater to satisfy your creditors". Debtor by now is being harrassed all over the place by several collection's departments. S/he just wants the pressure off. S/he agrees - dreaming s/he can afford the payment, after all, its less than s/he has to cough up now.

A few months later this unrealistic VA fails. The debtor goes bankrupt and loses everything. The creditors get nothing. But. guess what.. the IVA firm walks away with most of its fees. This is another reason why I am highly suspicious of upfront fees.

ClearDebt
www.cleardebt.co.uk