www.iva.co.uk

I have been with PayPlan on an IVA for a little over 2 years now - I have been making payments of £170 a month during first year and £230 a month during second due to a pay rise

I have just received an annual summary from egg regarding my loan and they are still showing the same amount outstanding as when I took my IVA out..

This is concerning me as I have paid nearly £5000 to PayPlan and it doesnt seem like the people I owe'd money to are receiving anything

Is this normal or something I should be concerned about?

Hi there and welcome to the forum

Why not ask Payplan what they have distributed to creditors to date? They should have paid something over by now, but often creditors do not update the statements for dividends recieved out of insolvency cases.

Personally, I would trust the Payplan information more than statements of account issued by your creditors.

Fuzzy - you should be able to set yourself up on Payplan's Justabank system and check your accout yourself.

You should also have had an annual report from Payplan stating what they have paid out.

Don't forget that a large part of your first years payment will have been taken up by fees.

It is possible that after the nominee fee, three years supervisory fees and costs there has not been enough to make a payment to creditors yet. If Payplan have to retain funds for bankruptcy in the event of default it will be another while before creditors receive their first dividend.

It is nothing to worry about as your creditors receive a receipts and payments account with the annual report and are aware of where every penny has gone.

But Michael - that would be dreadful if no monies had been returned to creditors for such a long period. We usually make our first distributions during the first year, and at quarterly intervals thereafter.

It is practices like this which have not helped our profession in the eyes of creditors.

True Melanie but given the low level of contributions it would be difficult to pay out a dividend as the total first year's payments would not cover a basic nominee fee. If creditors asked for funds to be retained for bankruptcy most of the second years contributions would have to be set aside and this would be before the supervisor was able to draw a fee.

It is a difficult one as many IPs will not take on low contribution IVAs as often they are lossmaking and if they do creditors do not receive a dividend for some time. However, the alternative is that clients with a low surplus income are denied access to the IVA legislation and must petition for bankruptcy or enter a DMP.

Firstly, thanks for all the advice - especially kallis - I didnt even know payplan had the justabank system!!

Have signed up now and its good too see a balance - its good to see my £4k+ hasn't just vanished

However rather depressingly I've just found out ALL of that has gone in to fee's
I should have read the original agreement 2 years ago - but it was very confusing and I was very stressed at the time and just wanted a way out

I have to say I regret my IVA a lot - I'm now on a lot more money and the £4k I have paid could have gone towards the debt I had instead of, as it seems, into someone elses pocket
It's looking like it will be impossible for me to get a mortgage after the IVA too even though i've been offered the 20% deposit from family to get out of renting

My last yearly review from payplan they seemed more eager to get me to sign over my car and house insurance to their "partner companies" than in making sure the payments were right

If I had made the current £230 a month payments direct to creditors for the full 5 years I would have paid off 70% of my debt, but now 2 years worth of payments have gone to a company that seem to have written 2 letters on my behalf and phoned me 4 times

I was in iva with B + E for 2 years(now bankrupt)and all I paid was the £10,000 fees, when I went BR the judge commented on what a waste of time it had all been and that the money could have gone to creditors(in hindsight I do agree) he was really nice about it and after having OR interview today ,i do feel the iva helped ease the path, but certainly not £10,000 worth.Still we live and learn and never will I touch credit again,so I have learned a big lesson from the experience.

Yeah Im sure that after the IVA is done knowing the debt has gone will be a good thing
But I wouldn't have done this given the choice again

£4k could have gone to creditors - and also I don't really feel inclined to work overtime and stuff to earn more money to give to payplan, whereas if I was actively paying a debt off I think I would have pushed myself more to get a 2nd job or work more hours to pay it off quicker

Could have paid the whole debt off in 5-6 years myself without having the black mark on my IVA

Trouble is payplan made it sound like such a good idea on the phone, using terms like "virtually no fees" and "you can still get credit/mortgage afterwards"

Glad you found the Justabank site fuzzy, it is good.

You say that you would have been able to pay your creditors in full in 5-6 years - that presumably would be if they froze interest and charges for the whole time, and whilst some do, there is no guarantee so you could have been paying for a lot longer.

Your credit record would still have been bad as most lenders mark your record as 'Special Arrangement' and you may show one or two months in arrears.

You will be able to get a mortgage afterwards, it just might take a little longer.

Next year you will see that creditors have received some money. Mine hadn't received any either when we had this years report.

Jan is right. The IVA gives total protection and had you been paying a debt management company there is no guarantee that interest and charges would have stopped, your credit file would have been severely tarnished anyway and the DMP company would have taken about £1,000 in fees anyway.

At least in your IVA you are guaranteed to be debt free after five years and your creditors are protected by having an IP to supervise for the duration.

This is why I am actually a big supporter of IPs only getting paid when they pay creditors. It gives us incentive to get the claims in and agreed at an early stage, and also lets creditors see an early return on their money.

Not sure why anyone would worry about fees, as long as I have the security of the IVA & I am paying a affordable amount than I don't care who gets what! I know this is a cynicle attitude but that's how I feel, put it this way I don't lose sleep worrying about my creditors

When we read the IP fees for my husband's IVA (done by Melanie) we were surprised how low they were - we expected an enormous amount J

I agree Fox.

Hope you are well J.