www.iva.co.uk

Hello All,
I'm in the fortunate position to close my IVA early due to a windfall I've received.
Having spoken to my Supervisor they have sent me details of the final payment, listed below, they require from me which I find totally confusing.
Unsecured creditors 20,749.04
Statutory interest 6,998.96 (IVA has been running for 1539 days)
Total due to creditors 27,748.00 which I agree and understand.

However, it's the next bit that I really cannot understand.

Required to pay in 30,668.53 (I don't know where this figure comes from?)
Less fees @15% 4,600.28
Less VAT on Fees 805.05
Sub total 25,263.20
Plus payments & interest received 7,485.69
Sub Total 32,748.89
Less fees already taken 5,000.89
Available to creditors 27,748.00

They end my statement requesting that I send them a cheque for 30,668.53

Surely this can't be right or am I being entirely stupid in my own calculations below and based upon their figures?

Unsecured Creditors 20,749.04
Statutory Interest 6,998.96
15% Supervisors Fees 1,049.84
VAT on Supervisors Fees 183.72
Total Debt 28,981.57
Less Payments & interest Paid 7,485.69
Total due 21,495.88

Now, even if the supervisor is saying that they are charging an extortionate amount of 15% per annum that would bring their total including VAT to 5,201.26 then the total amount due would be 25,463.58.

Is it my maths skills that are at fault or theirs?

Hi and welcome to the forum.

I've no idea about how they sort out the figures I'm afraid and maths was never my strong point! Hopefully one of the experts will be along soon to assist.

Hi gbpace10 and welcome.

Your IP's figures are not written particularly clearly, but it's easier to understand when you work backwards:

Your creditors need £27,748 (debt plus statutory interest).
Plus future fees: £4,600.28
Plus VAT: £805.05
Plus past fees: £5,000.89
--------------------------------
£38,154.22
--------------------------------
Minus funds paid to date: £7,485.69
--------------------------------
£30,668.53

I agree that these fees are very high. If they have increased since you last examined them, phone your IP to find out why they have changed.

Thanks Liamjames, why on earth would my IVA be wanting future fees when they wouldn't be doing any more work? I am strongly getting the feeling that I would've been better off not getting into an IVA in the first place as the 'compound' interest of 23% (Statutory & Supervisors fee) is higher than what my creditors would've been charging.
Grrrrrrrrrrrrrr..................

I agree - our IPs tend to reduce the fees if the term of the IVA reduces to take into account the fact that they have done less work than anticipated. Unfortunately, I'm not aware of any requirement to do this, and I believe it's at the IP's discretion unless specifically mentioned in the proposal or any modifications.

I've been thinking about this again. My original IVA was set up with Debtmatters which was subsequentlly taken over by Payplan two years ago and they in turn had a creditors meeting and without my knowledge 'fatcatted' themselves with a 15% deal. Surely my liability for that 15% compound 'surcharge' would only be effective from that date? Therefore, why are they effectively charging me a 'extra' 5,00.89 as fees already taken? Would'nt that form part of the 15%?

You're right to ask these questions. It sounds as though your fee structure is very complicated, and you are entitled to ask your IP to break this down for you into simple terms, and justify anything that you did not agree to.

If the proposal states that the IPs fees will be 15% then that is what they will be - unless the IP concerned agrees a reduction. We cannot, and probably shoudl not,m comment on a matter of which we have no prior knowledge in terms of the IPs remuneration. IPs have taken an absolute battering on fees over the last couple of years, at a time when we are being asked to do more work by creditors, so if I were you I would contact your IP directly to get them to justify the level they are proposing to charge.