Clearing Early

[Sarah]

Hi All

I have recently just started a new job and I thought I may be able to pay off the IVA early!

I thought the best way of finding this out would to be asking the company i am with but when I phoned up they was really trying to put me off this would this be because of their fees all I wanted to know was how much I would have to pay back a month in order to finish early? And they couldn't really give me a straight answer... well not one that makes sense! Has any one else had experience with this?

Thank you

Sarah

[Oliver]

Hi Sarah

Usually you would only be able to pay off an IVA if you either

(i) Paid 100% of the debt, plus IP fees, plus potential statutory interest through your monthly payments

(ii) Had a lump sum to offer your creditors i.e. a mortgage or loan from a friend or family which you would then have to use your disposable income to pay the monies back.

If you have a new job which pays more money it is likely that there will be a clause in your agreement which stipulates that the money you pay monthly towards your IVA will have to increase in line with your new disposable income (Monthly income less Monthly outgoings).

Unless you are able to pay all the money back as in scenario (i) it is likely that you will have to pay more back to your creditors for the remainder of your IVA term.

Please post some more details of your circumstances so we can discuss this further.



Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[MelanieGiles]

Hi Sarah

There could be several reasons why they are discouraging you to do this - please ask them what they are! And talk to your IP directly rather than a staff member to get it from the horse's mouth!

If you are talking about increasing your payments as a result of your new salary, then this will not mean that you will pay your IVA off any earlier (unless of course you can pay 100p in the £), this will just mean that the creditors will get a higher dividend.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Sarah]

Hi Guys

Thank you for you response.

Here are my details -

I am paying back £25,740 but it was originally £32,140 at £429 a month which works out to about 50.56p and the fees are Nominees fees - £2500, Supervisors Fees - £5148.

I will be earning around £1300 a month after tax.

Do you know how much I would have to pay to get up to 100p ... Sorry I can’t figure it out!

Would you recommend paying off 100p or staying lower i know I will have to pay more but I am just wondering if I could afford 100p would it be worth it!

I hope all of this makes sense!

[MelanieGiles]

Sarah

Are you saying that you owed originally £32,140? If so, you would need to pay over £41,126, less what you have already paid in. If you divide this figure by the number of months you have remaining, this will indicate what your payments would need to be to effect a full repayment to creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Sarah]

OK so just to get this right I do I have to pay back the original amount or the amount I am paying back now? sorry this part just confuses me!

[MelanieGiles]

Sarah

You have to pay back the amount you originally committed to pay ie £429 per month, plus whatever extra money you can afford based upon your salary increase (less any increased expenditure you now have).

You are now better discussing this with your IVA supervisor, who will be able to give you specific advice with regard to your own case.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Sarah
Just to clarify.
You still owe the original amount of your debt,32k,until the IVA is finished and then your creditors write off the remaining debt.
You will have to pay into your IVA all your extra disposible income until the full debt plus IP fees is paid or until the five years are up.
Hope this helps
Regards