debt calculator

[anais743]

when working out what you owe do you include the interest on any loan agreement or the original amount borrowed? (eg ive borrwed £23k from NR but I would be paying back £30k with added interest over the term)

[carlmcmullen]

Yes, when a creditor makes a claim in an IVA they will claim for the total amount including interest.

So yes take your monthly payment and multiply it by the number of months remaining then you will have the balance to include.

Your IP will work on the same formula so best you do then there is no nasty suprises.

Carl

[MelanieGiles]

The calculation of loan balanaces does not work like that, as the majority of creditors will discount future interest - especially Northern Rock. You should get the amounts you owe to creditors verified independently - and make sure that you ask for Account Balances rather than Settlement Figures, as these are often different.

[carlmcmullen]

I would have to argue that fact Melanie,

I see proposals drafted every day to this formula and I also see the votes being submitted by creditors and they only ever differ by a few pound if at all.

I would only normally see a discount if Loan protection has been added to the loan.

I have only seen it on a very few occastions were a creditor has discounted for interested.

Surley this formula would ensure that that you are not leaving yourself open to an increased claim in the IVA and potentially failing at day one due to increased Liability.

I have on a number of occasions obtained a settlment figure and outstanding balance and seen creditors claim for a higher amount and that amount being the full loan interest that would be applied should the loan run its full course.

[MelanieGiles]

Then perhaps it just happens in my practice!!

Are you telling me that you put figures into proposals for Northern Rock together loans based upon the number of monthly payments still to pay multiplied by the amount of the monthly payment? And that Northern Rock submit claims on the same basis? And what work do you carry out to verify the balance - either pre-IVA or when the claim is being agreed for dividend purposes?

I personally do not "leave myself open to an increased claim" as my policy is to independently verify all creditor outstanding balances with creditors prior to drafting the IVA, thus avoiding the possibilty of incorrect guesswork, and have to say that in 22 years in this industry I have rarely had a nasty suprise.

Perhaps I am doing something wrong?

[carlmcmullen]

I would not suggest that obtaining a balance and settlment figure directly from a creditor and then working the figure out from the loan agreement 'guesswork' i would say this is very thorough investiation.