DFD We've had to drop our payment

[kazzy]

I have just completed my last (hopefully) annual review and am starting my last year of payments to my IVA. I had a call yesterday to go through some changes, as we've had to drop our payment quite substantially. I'll try to explain this simply as I'm trying to get my head around it myself!

We've never had to reduce our payments before and have actually been paying £250 per month more than our originally agreed contributions for the past 17 months. We did have to take a couple of months payment break when my husband was made redundant, but we have never defaulted and the IVA is in good stead.

During the phone call yesterday, I was told we can drop down to the original figure for the duration of the IVA, and because of the 2 month payment break, we've still got 14 months to pay (they add the 2 months onto the end of the term)
I ran some figures yesterday... like you do, and I've found that taking all our payments into account, we only have approx £9500 left to pay (according to the original agreement amount) and if we keep paying for 14 months, we will in fact have paid £14000!

Would I be right to call them and find out why and what is going on? or is this totally normal and I have to pay more than the original amount? On the annual report to creditors that I get a copy of, as of last year's review, claims had not exceeded the original estimate so I really don't understand what's going on!
Any advice or info? If you can make sense of this, sorry

[kallis3]

Hi Kazzy,

I presume the figures you are talking about is what would be owed for the IVA payments and not your total debts?

If so, then they can take the extra payments as you will always owe the full amount to your creditors until the IVA is completed.

If not, then I can only assume that this takes into account fees and possibily interest.

It looks as though your creditors will be getting a better dividend.

[kazzy]

Hiya,
The original figures in the agreement were 49k, and that would pay creditors 100p in the pound - the total claims so far to date are 46k
If I take into account the fees etc, that brings it up to approx 58k, but if I pay for a further 14 months the total paid would be 64k
Do you see what I mean? I would be paying the creditors in full based on the 49k total so why am I going to be paying more?
Apologies, I'm probly not explaining this very well, as I'm really confused at the mo

[Broke of London]

Hi, congrats on paying off all your debt!! Ask your ip company for a copy of their workings and then speak to them with this in front of you so you can understand their calculations. You should never pay more than the 100p/£ plus statutory interest plus fees. The extra could be the interest.

[kallis3]

I do see what you mean - I would certainly speak to them as the extra does seem excessive.

[kazzy]

Will call them tomorrow and try and find out what is going on - thanks all for your replies [:)]

[plasticdaft]

Is the statutory interest not about 8%? I dont think the fees look that far off to be honest. Certainly call them up to explain where they get their figures from. Well done for paying so much back. Did you always expect to pay back 100p/£? Only asking as thats a very high return and you possibly could have used a DMP to pay your debts.

Paul

[kazzy]

Hiya,
Yes, was always going to be paying in full from the start, but with so many creditors (we don't own property so all unsecured) the advice was to go down the IVA route.
I've been really happy with it all so far, it was just during the phone call yesterday, they at first seemed reluctant to drop our payments, until I pointed out that the original agreement was for £1005 per month, so we weren't actually breaching the agreement by dropping it down from £1249, seeing as how we are now £300 per month worse off due to tax codes changing and such. We are just reverting back to the original proposed payment and they agreed (finally) that this was acceptable, subject to clearance from our supervisor.

I just got confused when they suggested that we still have 14 months @ £1005 to pay, when I knew we'd been paying extra for 17 months and that the figures were all based on 100p/£ - they seem to be focusing on us keeping payments going for 60 months regardless of the total amount at the moment - ah well, I'll see what they say tomorrow

[plasticdaft]

Let us know what they say.

Paul

[kallis3]

I know they will have taken account of fees etc., but it will be interesting to see what they say.

Let us know.

[kazzy]

Hi all,
Have just spoken to them, and they were going to be carrying on the payments for 14 months until I pointed out that the original figures were based on 100p/£ (shouldn't they know that?) After reassessing my 100p/£ figure and calling me back, I got told the following:

Apparently, they've received claims to the value of about 47k, with an estimated 4k not yet claimed by creditors, that means the outstanding is £51218 - I was then told that the fees aren't £8813 as originally stated but are now £9373 because they've allocated more for disbursements than they originally thought. Does that sound about right? I think it seems to make sense now.

So, I've got 11 months left and then I'll be free - or at least I hope so, unless they decide to change something else!

[Imhotep]

Yes, was always going to be paying in full from the start, but with so many creditors (we don't own property so all unsecured) the advice was to go down the IVA route.

Did you ever consider bankrupsy?

[kazzy]

We always looked at bankruptcy as a very last resort - so never gave it much thought.

[kallis3]

I do hope you are free after the 11 payments. Fingers crossed!

[Sinking Fast]

Kazzy,

You need commending for not going down the Bankruptcy route, as so many would have done seeing you don't own your own property.

Speak to your IP, not a back room member of staff, and get a full explanation for their actions. No doubt a professional will be along soon to chuck a bit more meat onto the bone.

Gd Luck.

We always looked at bankruptcy as a very last resort - so never gave it much thought.