With Creditfix and Considering an Early Exit Loan?

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hubert

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Post by hubert » Fri Dec 30, 2016 11:30 pm
Sorry if these points have been mentioned already, but I feel it only fair to share my experience. And of course my own personal opinions only!

Perinta, the "early exit loan" company that are associated with Creditfix don't offer good deals. They add up all your remaining payments, add on another year of them if they think your property equity will justify it. They then lend you that amount and charge you interest of course and it's not cheap.

However, their calculations are biased significantly in their favour (and they benefit Creditfix too). Your creditors may well accept much less if you made a full and final settlement offer yourself. They may even disregard the possible extra year as a bird in the hand is worth two in the bush.

Also, Perinta's calculations ignore any overpayments you made so far due to overtime, bonuses or windfalls.

You need to look at what the creditors originally agreed to accept and see what's left. As an example:

You owed a total of £40,000.

Creditors agreed to IVA proposal at 54p in the £.

They expect to get £23,600 back over 5 years at £393 per month.

At the end of year 2, you've paid £9,500 in regular payments and say £1,500 in overtime payments totalling £11,000.

That means your IVA has £12,600 outstanding based on the creditors' original acceptance. Now you might end up paying more than this if it runs the course, but we're talking about an early settlement offer here.

Perinta will say you have 36 payments left meaning £14,160 and disregard the £12,600. So they will offer to lend you £14,160. Creditors will of course accept this.

But, since the creditors agreed right at the start to take £23,600 and you're only £12,600 away from that you could maybe offer £11,000 and have it accepted. Now that's some £3,160 less than the loan Perinta would saddle you with.

Bear in mind the critical fact - the creditors have already agreed to a figure right at the start of your IVA. Yes they hope to get more, but they've already said that's what they'll accept. If you put in a full and final offer on the first day of the IVA, that's what you'd base your offer on. This does not change throughout the IVA.

Now the creditors might choose to refuse a full and final offer, if they have a really good reason to think they'll end up with a lot more. But don't forget that most creditors have handed off the debt to one of the IVA processing companies and full and final settlement is an attractive proposition. Early payout!

I'm not saying it's all doom and gloom. Of course, Perinta have to make a profit or they'd go out of business, but their practice is, in my opinion, somewhat sharp. They could in such cases lend significantly less and still secure an early exit - but that wouldn't suit their purposes.

Finally, I must warn that Perinta give misleading information. While trying to persuade me that I was better off with an early exit loan, they kept saying that Creditfix could take my average overtime earnings and consider it "regular income" and up my payments accordingly.

This is absolutely untrue. They cannot do this. Even if they somehow did, all they could hope to gain is their percentage of that little 10% slice we get to keep. Add to that a mountain of paperwork and admin... no.

(Don't forget that if your pay goes up from the original figure, only 50% of that pay increase is paid to the IVA. The other 50% is yours to keep.)

Perinta also confuse in debt with stupid and tend to be patronising at times.

Perinta staff warned me not to believe "the stuff you read online" about them. Maybe a reference to this forum?

The staff I spoke to also mentioned they worked for Creditfix previously. My guess is they are all in the same building...

All in all, I would say to anyone considering the early exit loan to think about it VERY carefully. If your number 1 priority is to get out of the IVA and not be insolvent anymore then maybe you'd be willing to pay the price. But it is a hefty price, perhaps only worth it when insolvency stands in your way and you have no other means to reach a full and final settlement.

Anyway - enough from me. I hope my experiences here help others!

ps. I didn't take the loan :D
One pay-cheque away from oblivion!

kallis3

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Post by kallis3 » Sat Dec 31, 2016 8:55 am
If it doesn't state that you should take out a loan, you don't have to and, if you want one I believe Shaun Vickery and his company can arrange one at competitive rates.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

Foggy

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Post by Foggy » Sat Dec 31, 2016 10:30 am
Very good points Hubert --- have a look here:

http://debtcamel.co.uk/perinta-loans-end-iva-early/

You will see that Aperture are also on that bandwagon, but do figure in a reduction in the offer based on administration savings ( which we also like to factor in on F&F settlements if there are savings to be made. Although it would be nice to be able to factor out any possible 12 month extension ( which you should try if you can demonstrate that there would not be an extension if the IVA were to run its course) it is often wiser to add 12 months to your offer as, if for nothing else, a sign of goodwill. Also be wary if with Payplan ---- usually if a F&F offer is rejected the IVA continues on it's merry way ... but Payplan habitually offer the creditors the alternative of bankruptcy! Talk about poking a sleeping bear with a stick ! They will, however, remove this option if asked to.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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