My first post here as I've just got my latest annual review and I'm looking for some advice on my IVA. I wish I'd found/joined this forum a long time ago! My IVA started with a company called Pareto Money and was moved to CreditFix a year ago, if not slightly longer.
I am now into my third year of an IVA which had a total unsecured creditor balance of £30,927.27
My review confirms I've paid in a total of £34,520.11 which includes my monthly contributions, overtime, and also a PPI refund I had. Because of this the estimate shows a total realisation of £51,963.04 which I guess will be the total they are expected to receive if I continue with my monthly contributions.
I've just come off the phone with CreditFix and one thing I took from the call was that a full and final settlement would be calculated at 100p in the £, which of course makes sense. Would it be recommended looking at this option if I can to reduce the total amount I pay?
I also noticed that the "Superisor fee" has increased from £570 to £7516.96, with a note of "due to an increased in the anticipated realisations for the arrangement" - is this on the basis of me paying more in and so they will receive a higher amount of revenue from my IVA?
Supervisors fees are based on a percentage of what is paid into the IVA (and CF are generally higher than most).
CF habitually spout that you need to pay 100 pence in the pound to close early, which isn't entirely the whole truth, but is the scernario that usually gets them the most income.
A settlement is generally based on the remaining debt balance plus fees and possible statutory interest, but the most usual method is by Full and Final offer (F&F), which is based on remaining payments.
Anyway -- if you hit the settlement figure during the course of the IVA the arrangement will end early.
On an original debt of £31k this, at the current time, would be something in the order of £40k (based on supervisor fees of 20% and statutory interest of 8% p.a. for the two years so far. So a settlement would be something like £10k.
A F&F, in this case, would, if based on remaining payments scheduled, probably cost more, as the scheduled payments will actually not need to be fullfilled due to you hitting the settlement figure prematurely, due to the extra income and PPI refunds paid in already.
Does that make sense ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thank you foggy, finally somebody who makes sense to me! In certainly not a daft person but sometimes the whole IVA world seems very complex!
The supervisor fee I hoped would be fixed as surely the work they do is the same no matter what I pay them - I might check my original agreement as it moved to CF so I guess they would be bound by that agreement.
I had a work bonus earlier this year so I have 5 monthly payments of around £1100 for the next 5 months, so that would take me to the £40k mark - that would be a great Christmas present if that would be almost the end of this journey!
Thank you also for the "settlement" term, and explaining he difference between F&F. I've been searching on Google for early IVA completion and all I get is loans for the F&F side of it - knowing the right lingo is half the battle and I now know to ask for what the settlement figure is.
10 years ago, or so, it was commonplace to have a fixed fee or a time-based fee, but creditors constantly amended this to a percentage of realisations ( presumably trying to entice IPs to work harder to collect more) and, so, now, the percentage is usually the system employed. Many firms charge iro of 15% still, but some, including CF go for 20 or 23%, although often reigned back by creditor modifications.
Now, as for your fee structure --- I imagine it would have been modified by CF on taking over the arrangement. There was a big and messy episode where blanket variations were issued, sometimes without the debtors knowledge and, I suspect some of the fees charged to this day are higher than that actually agreed, but difficult to trace due to the mess caused at the time.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thank you! I found my agreement and it has a fixed fee + 15%, which I suspect even if I went back and forth with CF I doubt I'll get anywhere by the sounds of it.
Thank you for the help - I'm going to email CF asking them to confirm the settlement amount and see what they come back with! I'm much happier knowing I wont be paying £50k for this and hopefully it will be something that wont take much longer now.
Sat Jul 25, 2020 12:17 pmcouton wrote:
Thank you! I found my agreement and it has a fixed fee + 15%, which I suspect even if I went back and forth with CF I doubt I'll get anywhere by the sounds of it.
Thank you for the help - I'm going to email CF asking them to confirm the settlement amount and see what they come back with! I'm much happier knowing I wont be paying £50k for this and hopefully it will be something that wont take much longer now.
Many thanks,
Paul
The fixed element is the nominees fee (work done in drafting the agreement) and the 15% relates to the supervisors fee ( running the agreement).
Best of luck with it all.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
