told that I owe 10,000 pounds in fees and charges

[MelanieGiles]

No kerri

As insolvency practitioners we have extremely strict guidelines with regard to the taking of fees which are set in tablets of stone. It is a heanous crime to take fees in excess of what was agreed with creditors, and we still do need to show value for money.

What the regulatory body are saying to you here is that if you feel you are due a refund of fees, you will have to seek remedies in a civil action against your IP company.

I do not strictly agree with this, but you will need to check the fine print of the contractual agreement you entered into with Synergy to see what you were actually paying for. It may be that you still have a case for misrepresentation.



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]

Well if thats the best response that the regulatory body can come up with then shame on them !!! how many people will start civil proceedings against an IP firm,its a bit like David and Goliath.
Kerri,s case is appalling and shows the need to bring the insolvency market into a self regulated industry or under the umbrella of the FSA.

[MelanieGiles]

The problem I perceive Kerri might have here is that Synergy will probably argue that the money she has paid is in lieu of their nominee's fees - which are pre-contractual and therefore not subject to any real form of regulation or creditor agreement.

I do still think that she should continue with her complaint, but she probably has more of a chance with regard to a misrepresentation claim - especially if she was told these monies would be going to pay her creditors - as I regularly hear in instances where firms take money on an up front basis in the run up to creditors meetings.

The regulators should still look at your case Kerri - don't give in.

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

[andrew_xlb]

Good luck with your case Kerri, and no disrespect to it, but back to my friends problem now...I have even more information (feels never ending) for you Melanie if you are still up for assisting on this..your help is GREATLY appreciated by the way..

Basically, my friend signed to agree the following:-

Re-payments of £11,100 0ver 5 years

Equity release at end of 5 years of £3,000

Set up (mostly legal fees) of:-

State fees £35

Specific Bond £50

Nominees fees £1,900

Nominees expenses £300

Supervisors fees £2,155.20

Legal fees £206

Irrecoverable VAT £455.91



Total £5,102.11



If you add up these sub-totals:-

£11,100

3,000

5,102.11

Total so far to pay =£19,202.11



She has currently made payments of:- £10.500

That leaves a balance in the early stages of £8,702.11



She also signed to agree to pay any "over & above fees" incurred during the IVA period if extra work was to be carried out.



These extra fees have greatly increased final costs due to the fact that initially she missed payments which generated letters & phone calls etc...

Then she made 2 offers to creditors which cost a lot for them to put these proposals forward. (she was not aware of this costing)

They were both refused acceptance. she realises now with hindsight that the proposals didn't account for increased costs added to propose this, therefore the creditors were being offered a much reduced sum, as Bond were taking their increased costs out of the offer price. So naturally the creditors didn't accept her offers.



As of January 2007, to get "closure" and fulfill the requirements & get her IVA Certificate of Completion, my friend was faced with a total bill of £16,000!!



Bottom line then was communication with Bond!



Following on from reading the helpful advice on the forum She has so far had 3 phone conversations with one of the 3 senior partners. She offered to pay the balance of the original £11,100 agreed (which was £600 remainder from repayments) + the £3,000 equity now, but was informed that she wouldn't get her Certificate till all accounts were settled - this could go on for another 5 years at this rate with more admin costs along the way. The £5102 set up fees would also have to be paid.

So She is trying to negotiate full costs down to complete in full now.

She has got them down to £11,500 at present from their original £16000 outstanding account. She has however offered a maximum amount of £10,000 to complete in full. incidently, is it curious that they have dropped their fee signifficantly from their original amount.

This is now going back to the other 2 partners for consideration & they will get back to her.

She has requested that no more fees are added whilst we are in discussion & they agreed.

[MelanieGiles]

Hi again - of course I am happy to help!

This case is appalling, on the basis that your friend should never have been put into this IVA in the first place with debts of such a low amount, and I am amazed that creditors agreed to accept this.

Contractually, the IP has probably not done anything wrong - as your friend signed up to the terms of the agreement, however morally this cannot be right.

I suggest that your friend asks the IP to limit their fees to those proposed under the IVA. Did she agree to fund the costs of the two abortive variations on top of the IP's fees? She may have cause for a complaint on the basis that she was not given best advice, and in my view she should offer to pay the level of outstanding contributions due plus the £3,000 equity and no more - but she will need to meet those costs of variation if she instructed them to do this work. What basis was the IP trying to vary the arrangement on - early settlement?

She should also ask her Supervisor to provide her with a detailed time summary of the costs he has incurred to date to justify such disproportionate fees.

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

[andrew_xlb]

I am inclined to agree with you on what my friend should now pay. i will discuss your response with my friend later and get back to you. she is very concerned though about the timing of it all as the account is due to be settled in full at the end of this month (or an extended agreement put in place for 50 more months) or she is told the IVA will fail. Do you think the IVA could be frozen whilst the dispute is sorted out?
Incidently, i dont understand though why the original set up fees were not included in the monthly payments throughout the length of the term to avoid facing a large end of term payment. is this normal?

[MelanieGiles]

Andrew

These fees are completely odd, and I do not understand this "Associate's Fee". There is no place in an IVA for such costs.

Tell her to put the IP on notice that if he does not agree to give her a reasonable amount of time to sort this out, then this will result in a complaint to his regulatory body, upon which she has already saught independent professional advice. But do also urge your friend to move swiftly to get this sorted out.

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

[andrew_xlb]

An update on the situation. It was the best advice to get in contact with the IP to negotiate a full & final settlement, although it was hard to do this in case things didn't work out to conclude the IVA.

My friend has now agreed to settle (with family support) by sending a cheque for the sum of £10,000. The relief that this would end the nightmare & stop the worry that she could be failed & be listed for bankruptcy, lose the house and risk huge stress on her health, was worth the trauma of discussing everything on the phone with the senior partner. I am happy to say that she is now sleeping again at night!

The positive thing for my friend to look at now is the fact that the £10,000 includes the £3,000 equity fee, the setup legal fees (£5102) and her last 2 months payments of £250 per month, with the difference being a contribution to any additional fees accrued during the term of the IVA. This is a huge reduction on the original £16000 final figure quoted by the IP to close the account. We can feel better in a way that they have greatly reduced their fees to close this account.

I know my friend could have gone to Court etc in dispute, but an early conclusion with this agreed final cost was worth more than dragging it out for a longer period.

Thank you again so much Melanie (and everyone else who has contributed here) for all her help.