Stck to your guns

[Sarah]

Hi All

I just wanted to give you an update on my story..... a few months a go i had a big pay rise and as soon as i got this i put in a new expenditure form as i got this big pay rise my parents put my rent up by a significant amount as they should do as i am now 24... at the time they said that this would not be a problem. Months went by of me chasing for an update and i just kept getting 'sorry we are busy and it will take a while to go through' then it came to my annual review and i had a whole lot of problems but the main one was that they said my parents could not increase my rent and i would have to pay £800 a month instead of the £600 i was offering (originally paying £429) i told them that i could not afford this and they need to put my offer forward only to be told they doubt it would be accepted....... well i stuck to my guns and i had the letter through last week to say my offer was accepted (7 months after i sent in the new expenditure form) Any way the moral of the story is do not agree to what you cant afford do not let them scare you into anything as the creditors would rather have that bit extra than me go bankrupt for example. I hope this helps some people........ Now a question for the experts

I now have to go through this all again as i have just had another pay rise but my question is i was originally paying 53p to the £ do i just have to basically double my monthly payments to work out what 100p to the pound would be or is it more complicated than that?

[Adam Davies]

Hi
First of all WELL DONE for sticking to your guns and it just shows that maybe the creditors are more understanding than we think.
To pay a dividend of 100p instead of 53p you don,t have to just double your payments as you would be paying double IP fees.
You would need to work out what 47% of your original debt was and this would be the amount that you would need to pay by way of extra ontop of your original monthly payments x60.
You need to be aware that you may have to pay statutory interest once you reach the 100p mark if there is still time left.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[ray_a]

Hmmm

I think you should work out what you can afford to pay into the IVA before looking at a 100% payment.

I suggest you wait for the next anniversary and look at what you can afford.

A year can be a long time and hopefully the situation may not arise but your income could fall!

I say this because Statutory Interest and myself are not very good friends at the moment!

[Sarah]

Oh my god i don't get it sorry if i am being silly perhaps you can help me if i give you the figures.....ok

Total debt £32,268
nominees fees £2500
supervisors fees £664
disbursements £414?

I currently pay £429 (which will go up) this is 53p

i am really sorry if this sounds dumb.... and also do you know a roundaboubts sum of how much the statutory interest will b about? Many thnks for your help

[Louise]

Can I ask what exactly statutory interest is, and do you pay it just if you pay the full amount off as a lump sum, or do you also pay it if you offered a full and final settlement? Do I also take it that you don't pay it if you continue with your monthly payments for the full 5 yrs?
Thanks

[Louise]

Sorry just done a search and found some details (I mispelt it first so it didn't bring anything up). It says it is 8%. Don't want to sound thick, but why do you have to pay this - is it because the creditors have agreed to stop interest for the 5 yrs of the IVA so they want it back - so does it go to them???
Sorry if that's sounds daft!
Louise

[Sarah]

i wouldn't mind knowing that either?

[Adam Davies]

Sarah
£429 X 60 months is £25740
Original debt is £32268 and 53% of this is £17102,so your total IP fees is the difference £8638[£32268 - £25740]
So to pay a full 100p in the £ you need to pay the original debt plus IP fees [£32268 plus £8638 = £40906].So to pay 100% of your debt in an IVA you need to contribute an extra £15166 over the lifetime of the IVA.
Stat interest is 8% per year but you may not have to pay this,discuss it with your IP.
All the above figures are approx as it will depend on whether your IP fees change over the five year term.
Louise
You will only pay statutory interest if you pay the original debt in full,this often occurs where a lump sum from a windfall enables the debtor to do this.
It is not due on a partial full and final settlement.
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Sarah]

Thank you

[ray_a]

Hi Sarah

Sorry not to get back to you on this as I am presently fighting a nasty Statutory interest charge on my IVA.

You need to look at the IVA documentation to see whether statutory interest is mentioned. It can also be included in your creditors modification documents as well. Mine was included in section 13 of the proposal but it could be different.

Basically, and this is the sting in the tail which caught us off our guard for a number of reasons to explain here, if the Supervisor believes there are sufficient funding to clear the outstanding amount and to obtain statutory interest then he has to recover the sum from you.

Basically if he thinks you are able to clear the IVA at the 100% dividend and can get statutory interest then he can persue it.

Hence why I am here because after selling my home we were in that position. My solicitor took the view that there are not sufficient funds as we are expected to live and be able to have sufficient funding to rebuild our lives. In addition he argued that we required capital for a future depoosit on rented property, a poosible house purchase, funding to replace outdated equipment for the home and my business. Melanie also agreed and a variation was put in place. You have come on the right time because the first variation meeting is tomorrow so watch this space! I suspect we are making IVA history here!

Basically, I would advise caution here and keep the IVA going as I said earlier in the thread and try and pay the 100% without going into the statutory interest argument.

Sorry this is long but hope it helps

Ray

[Sarah]

Hi Ray
Yes thank you this helps a lot as i was thinking about going down this route to try and finish early and at least if i even just enquire about it i can look out for this now. When it says 8% does that just mean 8% of the orginal 32000 which is about 2500 or would it be 2500 times each year i have been in the IVA? I think i will give the company a call today.... i suppose it doesn't hurt to enquire?

[ray_a]

Hi Sarah

This can hurt badly as they calculate the statutory interest from when the IVA ends until such time as the 100% dividend is paid. Hence they will continue until you meet the £32,000 plus the statutory interest calculation.

It is a shame because in a way it stops people wanting to pay off the IVA.

A lot of accountants and lawyers who i have spoken to believe that it was there to pick up windfalls ie winnings or inheritance!

[ray_a]

Sorry I meant to say when the IVA starts ie when the IVA is agreed!