Hi im due to make my last iva payment on 23rd feb 2013 my mother passed away in november 2012. I told my ip that i am due to inherit. They told me that i would have to pay 100% plus fees and statutory tax which means i have made 12.800 in iva payments and they want another 29.329 my original debt was only 26k is this right
Let's see:
Original Debt £26,000
8% simple interest is around £2000 p.a over 5 years = £10,000
Fees around £5,000
So total owing = £41,000
Less £12,800 paid
Leaves £28,200
So, I would guess the figure they quote is in the right ballpark.
Many modern proposals omit the requirement to pay statutory interest and I have heard that some IP's request the creditors to remove this obligation, so that is worth asking.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I would ask the question of the need to pay the stat interest - but certainly you would be expected to pay up to the 100% of original debt and IP fees.
I was in a similar position and we posed a F&F offer taking us to the 100% limited, minus a little for IPs in the years left to run, and stat interest was removed...
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
Yes, but you remain liable for the full debt until the iva completes. Hopefully you will still have some inheritance left to make your new debt free life easier.
It only seems unfair if you inherit during the time you are tied by the IVA rules. Is it fair that creditors end up writing off money? Remember that you were happy to sign up for the IVA in the first place,and creditors agreed to not charge any interest on your debts for 5 years or so. I hope there is something left over from the inheritance for you to do something for yourself out of your sad loss.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
I know it seems harsh -- but that £26k debt would have cost you much more than £42k over 5 years !
I am likely to be in the same boat as you before my IVA ends. In my case, if not for the IVA, I would have paid nothing but interest ( at a much higher rate than 8% ) over the 5 years and still had the original debt outstanding.
Who is your IP ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I know what you mean Paulette. Mind you, in BR, it would have all be taken too, if in the three year payment period, but, in this particular situation, you would have been out and clear before November 2012.
I must admit that I am surprised at Freeman Jone's attitude. They have always struck me as more helpful and caring. It is your right to put a variation forward to exclude interest, as has been done by other firms in the past -- it is not their place to flatly refuse.
I agree they are entitled to the full fees, after all they have worked the full term (and will be doing extra afterward in respect of administering the inheritance) but their stance on Stat. Interest is, frankly, harsh.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Its a little different in bankruptcy, if you inherit post discharge say after 12 months and you receive a lump sum then you may be asked to just pay the balance of your agreed IPA from that lump sum, but then of course you have only paid what you agreed to pay but in a lesser period.
I believe some iva firms take the stance that if all iva payments are made as expected and the debtor is waiting for completion certificate then they have complied with the terms of the iva and further windfalls are not taken into account....
Last edited by luluj on Mon Feb 04, 2013 5:21 am, edited 1 time in total.
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
hi Foggy No Not Quite the official line is as follows
What if my income changes when I am paying an IPA or IPO?
You must contact your trustee (who may be the official receiver) immediately. You will be asked to fill in a form that gives details of your new income and your current spending. Your IPA or IPO may be changed to take account of the change in your circumstances.
If your income has gone down, the trustee may decide to suspend your payments under the IPA or IPO until your situation improves.
If your income has gone up, the trustee may decide to increase your payments under the IPA or IPO.
However windfalls are captured Pre Discharge, Not Post Discharge, however if received post discharge then the trustee could ask that the windfall could be used to pay off the balance of the IPA order at the existing rate,I would imagine the debtor would do this anyway, which of course then yes it would be capped,
