www.iva.co.uk

My IP is charging in excess of £3000 to settle my IVA. Which means my initial debt of a year ago has increased from £15,000 to £20,000. How is this legal? And if I cancel my IVA because of the (loan shark like) behaviour will I have to pay any fees to the IP?

Hi,

Was your original figure your overall total debt or what you agreed with your IVA? You will always owe the full amount of your debts plus fees and possible statutory interest. If you let your IVA fail you run the risk of creditors adding on interest and charges which means you will end up owing more.

Which company are you with?

The fees are those agreed by the creditors and yourself when you proposed the IVA. If you have asked for a "settlement figure" they will include the full original debt, plus fees and possible statutory interest. If you wish for the IVA to finish early, what you need is to make a "Full and Final Offer" . This is based on the number of payments left multiplied by the monthly payment and is usually a much smaller figure.

The IP fees are drawn from the assets, so effectively are paid from the creditors pockets.

It's not something you would need to worry about unless you had sufficient funds to pay everything off in full, which would then mean the entire debt plus interest and total costs as Kallis pointed out.

Both you and the creditors agreed to these costs when you signed the paperwork.

i'd ask the IP to justify why that kind of charge is fair and reasonable, which he is required to do, and if he can't, report him.

chrissy12345 wrote:

i'd ask the IP to justify why that kind of charge is fair and reasonable, which he is required to do, and if he can't, report him.

The fee structure is contained within the proposal and Chairman's Report -- it shouldn't come as a surprise and was agreed by all parties at the time.

If the OP's full debt was £15,000 I would expect Nominees fees in the region of £1500, then Supervisors fees at 15% would come in at £2250 if he paid the full debt. Then there would be in the region of £300 - £500 disbursements ... so the three thousand mentioned doesn't strike me as unreasonable.

Agree with Foggy.

Over the course of 5 or 6 years no one is likely to grumble over those costs. Over a year - different story. It's irrelevant what is in the proposals. The IP still has to justify it, statement of insolvency 9 says so. So if he can't do that then report him.

I'm afraid I would not contest it. Fees have been agreed and I would just be happy to get it sorted.