IVA costs [IP charges]

[rickyg33]

I'm looking for some feedback on likely IP costs over the term of the IVA.

I understand that these can vary, but some feedback from those with experience would be helpful.

Thanks,

rickyg

[Adam Davies]

Hi
New protocol and current TIX proposals[they represent some of the major banks] dictate that IP fees will be linked to the monthly IVA payments.Typically 4 or 5 times the monthly payment for nominee fees and thereafter 15% of the monthly payment to be kept for fees.
Today in the vast majority of cases the IP fees have reduced compared to a few years ago.
On a £400 monthly IVA the IPs fee will be £4300[incl of vat]so they will actually net about £3600.
When you consider that the IP will do a huge amount of work before receiving any money[and no guarantee that they will get anything] and that they have to supervise your case for five years I think that it is money well earned
Regards

[rickyg33]

thanks for the swift feedback
so, on a £400 per month IVA, the monthly payment would be about £460 as a guide

rickyg

[carlmcmullen]

Hi Ricky

No the fees would come out of the monthly contribution

I.e on a £400 iva payment the first 4 or 5 payments would be kept to cover the costs of preparing the propsal and then £340 would go to you creditors and £60 would go towards the supervisor fees.

There are a few other costs that are recoved but again these all come from you monthly payment and not added to it.

However diffent companies vote for different fee stuctures but the fees would always come from your monthly contribution not added to it in all cases.

Who is your biggest creditor?

Carl

[carlmcmullen]

Forgot to mention your creditors are fully aware of the fee's and are prepared to write of a lager portion of debt to cover them as the IP is not only acting on behalf of you but also acting on behalf of your creditors - therfore working for everyone [:)]

[rickyg33]

major creditor is CapitalOne credit card, then Lloyds TSB, then Mint

[MelanieGiles]

Captial One will limit your IP's fees to £4,500 if they have an influencing vote, Lloyds will say that they must be capped at £10,000 and Mint will want the same formula already identified by Andy!

[Adam Davies]

Hi
Capital one tend to keep IP fees low
Regards

[Adam Davies]

Mel
We posted within ten seconds of each other !!
Similar answer though

[carlmcmullen]

If capital one is your major creditor and represent more than 25% then it is likely that total fee's will be restricted to £4,500 excl VAT.

However the costs of the IVA shouldnt really be an issue when considering if an IVA is the most sensible solution as like i said previously the costs are all factored into your monthly payment and not added to it and ultimately creditors will write of more debt to compenstate.

If any IP asks for upfront costs (and some do) then you need to go elsewhere as alot of providers will not charge any upfront fee's and will only begin to charge once the your VA has been approved.

Hope this helps

Carl

[rickyg33]

and all that 'capping' means what exactly?

CapitalOne want a bigger slice of the cake, so to speak?

the total debt looks to be about £80,000

rickyg

[rickyg33]

sorry, forgot to add.........

£400 on £80,000 would be about 30p in the £

with some equity added in on year 4, say £8,000, that would take it up toward 40p in the £

does this seem a realistic prospect?

of course, this is subject to proper IVA I&E procedure

[carlmcmullen]

No it means all creditors get a bigger slice of the cake and the IP gets less for the work they do on the case.

[carlmcmullen]

Are HSBC on your list ?

[MelanieGiles]

Capping means that the fees are limited to, and your suggested proposal looks very realistic to me, although I don't think you have taken account of any costs in calculating the 30p in the £. So with the equity figure you suggest, a dividend of between 30p and 40p ought to be acceptable to the majority of your creditors.