How much would an IVA cost

[steveb]

HOW MUCH WOULD AN IVA COST TO SET UP IF I OWED AROUND 55K ?

[Sarah]

Hello and welcome to the forum it does not really cost you anyhting to set up an IVA the general prctice is the fees are included in your monthly payments.

It certialy does not xost you anything yo enuire about them.

How may creidtors do you have and who are they?

[steveb]

Hi Sarah,

Many thanks for your response. I have already got an IVA in place its just the charges were never fully disclosd to me at the time of setting it up and it wasn't until I asked for a statement outlinning outstanding costs that the charges are around £7k which to me is astounding seeing as they are supposed to be helping with my debt not increasing it.

Another question for you , I was supposed to pay back 100 p in the pound of my debt as I had a house in France which I jointly owned. They made my IVA a 3 year deal and not 5, the place in France has now been sold but for a very small profit which will not be enough to cover the estate agents fees so I will end up with another debt what do you think the respons will be from my IVA when I tell them this news ? I can't tell them yet as I do not have the official figures confirmed yet ?

Sorry it is a bit of a long winded question.

Regards

Steve

[Sarah]

OH right .... Are you paying your fees within the monthly payment? I think about £6000 is what I am paying in fees but I owed £32,000 but someone like Melanie may be able to help you a bit more on that one.

Hmmmm the house is a tricky one the only thing that I can suggest that you do is inform your IP about this immediately and they may be able to help you but I would try not to panic too much about it until you have spoken to them.

[steveb]

Hi Sarah,

Thanks for that at least I don't feel as ripped of as I did.

Regards

Steve

[MelanieGiles]

There is no hard and fast ruling with regard to the level of fees charged, but I typically see anything from £5,000 to £10,000 being provided for within IVA proposals. This is generally funded indirectly by the creditors, and therefore they rightly have the ability to modify the level of fees if they see fit. In your case, as you are offering a return of 100p in the £, you are funding the IP fees personally.

I find it strange that you say the fees were never disclosed to you from the outset. These would have been clearly referred to within the IVA proposal document, which you signed. Your IP should have made sure that you understood the basis of this charges.

With regard to the shortfall from the sale of the French property, it is unlikely that this can be included within the IVA. Seek your IP's own opinion on this point, and put them on notice of this as soon as you can. How much do you think the shortfall is likely to be?

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

[steveb]

Hi Melanie,

There was mention of fees in the original document but it was written in such a way that no final figure was mentioned. As for the shortfall on the house I beleive it may fall between the 5 - 10 k mark.

I did not even think of putting this debt into my IVA I was more thinking along the lines of would they force me to go bankrupt , extend the terms to 5 years at its current rate and write off the differance on my UK debts as is the usual way or would they do something else entirely as I am now no longer able to give the balance of my debt back via the assumed equity.

The house was sold cheap as the bank were going to auction it on our behalf and the other owner of the proeprty did not want to risk it going at auction.

[MelanieGiles]

Hi Steve

You just need to await the outcome of the French property shortfall and see what develops. If the shortfall is to a French based bank, they may not bother pursuing it tremendously, as the amount is quite low. Potentially you could be made bankrupt over this debt, which would then fail the existing IVA and all debts would then be captured under the English bankruptcy. This may require you to make payments for three years, but this is the maximum which could be taken from you.

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]

Steve
Quote "as I am now no longer able to give the balance of my debt back via the assumed equity."
Am I right in thinking that part of your IVA agreement was to release some of the equity in your French property that you have now sold at a loss ??
If so then I think yout IP will fail your IVA.

[steveb]

Hi,

That is correct but I did advise them from the outset that it was a distinct possibilty that the property could be repossessed and was not totally in my control as I was a joint owner and not sole owner of the property. Surely that can't be to hard on me as I was trying to do the decent thing and pay my debt in full plus all the charges rather than looking for upto 75 % being written off right from the start.

Regards

Steve

[MelanieGiles]

Steve

Your IP will need to look at the rounder picture of the effect of these non-included debts, and the shortfall in the property to assess whether they feel it viable to recommend a variation to the original proposals on your behalf. I suggest that you arrange to meet with your IP as soon as the level of shortfall is known in an attempt so see if anything can be salvaged. How much equity did they predict would be available to your creditors in the original proposals?

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

[MelanieGiles]

Steve

Disregard comment about non-included debts - I am getting you confused with another poster.

Apologies!

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