www.iva.co.uk

In a complete panic, just spoke to our IVA firm and have been advised that the total cost of the IVA will be almost £20,000 please reassure me that this is a mistake?! It will be over a term of 6.5 years with the original amount being £40,000 - with a total repayable amount of approx £60,000

Hi Heidi,
i am not sure your IVA company have informed you correctly or have you misunderstood what they are telling you, if your original debt was £40,000 and as long as your IVA application is accepted you will only paid so much in the pound. i think the £20,000 may be the amount they want you to paid back over the 5 years about £340 per month depending on your income.

This is clearly a misunderstanding. The costs of your IVA should be listed in proposal document. I am thinking the same that £20,000 is likely to be the amount laid over the course of the iva which includes costs. Ask them to clarify with you and for it to be broken down into repayments to creditors then iva costs.

An IVA is designed to allow you to repay an affordable amount over a set period of time.
To pay 100% of your debt, on a £40k debt, over 6.5 years (an odd time scale -- possibly standard 5 years, plus a year for equity and 6 months administration) you would need to pay in roughly £63,000 ( to cover fees and statutory interest ).

95% of people never make this target, unless they inherit or win the lottery and simply pay the affordable amount. Anything unpaid at the end of the term is written off.

See also this thread from a while ago

http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=74844

If it IS for their costs (unlikely) this will not be your problem - you pay back what you can afford and reditors approve the costs.

It effectively comes out of the creditors' pockets as they receive a lower dividend due to the costs deducted.

It would only affect you if you received a windfall or had sufficient funds to pay off more than the capital sum over the term as you could then effectively be paying towards the costs too.

Thank you for your comments, much appreciated. DFD have been continually inconsistent with what we have left to pay and the end date seems to be pushed back each time I phone them. I requested a call back from an IP to discuss the matter further followed up with email but have heard nothing back.
feeling on an IVA low and just want some actual figures and a solid end date :0(

Keep pestering them!!! They will get fed up of your calls and will respond.

Dear Heidi.01,

Please contact me via the email address in my profile so I can take a look into your case and address your concerns.

Regards

Hopefully Laura can shed some light on this for you.