How can Creditfix justify the additional £11,000 just because we want to settle

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vicky625
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by vicky625 » Fri Jul 13, 2018 12:43 pm
I have an IVA now 3 years into the contract, we are thinking of moving house. The original debt was £19'000 so paying £180.00 per month just over £6'000 has been paid back. We have been told if we sell the house the total taken will be £24'000 although the outstanding amount of the bill will be around £13'000. How can Creditfix justify the additional £11'000 just because we want to settle earlier?

Many thanks
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MerlinL14
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by MerlinL14 » Fri Jul 13, 2018 1:05 pm
Your original debt would have been calculated at the time of the IVA proposal, the £19k would have been set as the maximum amount to be paid back given the figure of disposable income. @ £180 a month that is only £10,800 over 60 months, you need to be aware that you will still owe the full amount of the debt, including interest, which would have been frozen, and the fees to your IVA company. Adding the fees and interest back to the original figures would tot it up to ~£27k.
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Foggy
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by Foggy » Fri Jul 13, 2018 2:42 pm
If you sell the house they will take an amount to cover the full original debt, plus fees and statutory interest (around £27.5k) less the £6k already paid, so around £21.5 k.

This is pretty much standard practice. There is, however, a possible work around. If you do not NEED to sell the house, you can OFFER to sell it for the sole purpose of funding a full and final offer. The terms of the offer are that you will not sell unless the offer is accepted. This way you can base the offer on what they would have been getting over the next few years. If you have a 5 year IVA that would be 24 more payments plus 12 for equity release --- so 36 X 180 = £6480
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Foggy
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by Foggy » Fri Jul 13, 2018 2:46 pm
Do have to mention that, if the new house requires any finance, it is not going to happen until at least another three years have passed even if you settled the IVA today.
redboxtree
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by redboxtree » Fri Jul 13, 2018 3:37 pm
Need to point out that Creditfix has suspended all full and final offers until they can sort out "paperwork" issues - this is probably not the best time to do anything that involves them.
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vicky625
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by vicky625 » Fri Jul 13, 2018 5:23 pm
MerlinL14 wrote:
Your original debt would have been calculated at the time of the IVA proposal, the £19k would have been set as the maximum amount to be paid back given the figure of disposable income. @ £180 a month that is only £10,800 over 60 months, you need to be aware that you will still owe the full amount of the debt, including interest, which would have been frozen, and the fees to your IVA company. Adding the fees and interest back to the original figures would tot it up to ~£27k.


Thank you for your reply.
At the end of the term I cannot see the balance being paid off, there will be no means to. My spouse and I are on the brink of divorce however we are loathe to do that at the moment just so Creditfix can add a hefty bill for 'interest charges' we would prefer to stay married on paper!! A settlement offer has been put forward however due to their 'paperwork issues' this is stalling the process. Thank you for your input though :D
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vicky625
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by vicky625 » Fri Jul 13, 2018 5:29 pm
Foggy wrote:
Do have to mention that, if the new house requires any finance, it is not going to happen until at least another three years have passed even if you settled the IVA today.


Thank you for your reply.

We were considering divorce procedures however as this meant selling the property we were told Creditfix would take £24'000?? An offer has provisionally be accepted of £11'000 but the 'paperwork issues' are stalling the process. Think we will end up staying married on paper to see the contract out with Creditfix however no more money will be gained at the end of the contract as there will be no means to pay anymore.

thank you for your input :)
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vicky625
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by vicky625 » Fri Jul 13, 2018 5:33 pm
redboxtree wrote:
Need to point out that Creditfix has suspended all full and final offers until they can sort out "paperwork" issues - this is probably not the best time to do anything that involves them.


I initially thought Creditfix seemed a professional and reputable company but to get 10 weeks into final offer negotiations and then be told the 'layout of paperwork' is holding things up is laughable. I will not be recommending this company if they do not come up with a satisfactory solution quick,

Thank you for your feedback. :D
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vicky625
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by vicky625 » Fri Jul 13, 2018 5:38 pm
vicky625 wrote:
MerlinL14 wrote:
Your original debt would have been calculated at the time of the IVA proposal, the £19k would have been set as the maximum amount to be paid back given the figure of disposable income. @ £180 a month that is only £10,800 over 60 months, you need to be aware that you will still owe the full amount of the debt, including interest, which would have been frozen, and the fees to your IVA company. Adding the fees and interest back to the original figures would tot it up to ~£27k.


Thank you for your reply.
At the end of the term I cannot see the balance being paid off, there will be no means to. My spouse and I are on the brink of divorce however we are loathe to do that at the moment just so Creditfix can add a hefty bill for 'interest charges' we would prefer to stay married on paper!! A settlement offer has been put forward however due to their 'paperwork issues' this is stalling the process. Thank you for your input though :D



How can there be interest when the interest has supposedly been frozen? :?:
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vicky625
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by vicky625 » Fri Jul 13, 2018 5:46 pm
Foggy wrote:
If you sell the house they will take an amount to cover the full original debt, plus fees and statutory interest (around £27.5k) less the £6k already paid, so around £21.5 k.

This is pretty much standard practice. There is, however, a possible work around. If you do not NEED to sell the house, you can OFFER to sell it for the sole purpose of funding a full and final offer. The terms of the offer are that you will not sell unless the offer is accepted. This way you can base the offer on what they would have been getting over the next few years. If you have a 5 year IVA that would be 24 more payments plus 12 for equity release --- so 36 X 180 = £6480


Hi Foggy

Is it wise to approach the creditors individually to offer settlement fees seeing as Creditfix are having 'paperwork issues'? :?:
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vicky625
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by vicky625 » Fri Jul 13, 2018 5:47 pm
redboxtree wrote:
Need to point out that Creditfix has suspended all full and final offers until they can sort out "paperwork" issues - this is probably not the best time to do anything that involves them.


Is it wise to approach the creditors individually to offer settlement fees seeing as Creditfix are having 'paperwork issues'? :?:
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MerlinL14
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by MerlinL14 » Fri Jul 13, 2018 6:01 pm
The interest would have been frozen to facilitate an initial figure to achieve, as rates can and do change there is no way for creditors to say exactly what that figure would be over the term of the IVA, what they would and can do is calculate the final sum based on statutory interest which I believe stands at 8% or there about.
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MerlinL14
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by MerlinL14 » Fri Jul 13, 2018 6:02 pm
vicky625 wrote:
redboxtree wrote:
Need to point out that Creditfix has suspended all full and final offers until they can sort out "paperwork" issues - this is probably not the best time to do anything that involves them.


Is it wise to approach the creditors individually to offer settlement fees seeing as Creditfix are having 'paperwork issues'? :?:

No! you are technically not allowed to enter into talks of payment with your creditors, you could be held in breach if you attempt to talk directly with them.
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Foggy
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by Foggy » Fri Jul 13, 2018 6:06 pm
vicky625 wrote:
vicky625 wrote:
MerlinL14 wrote:
Your original debt would have been calculated at the time of the IVA proposal, the £19k would have been set as the maximum amount to be paid back given the figure of disposable income. @ £180 a month that is only £10,800 over 60 months, you need to be aware that you will still owe the full amount of the debt, including interest, which would have been frozen, and the fees to your IVA company. Adding the fees and interest back to the original figures would tot it up to ~£27k.


Thank you for your reply.
At the end of the term I cannot see the balance being paid off, there will be no means to. My spouse and I are on the brink of divorce however we are loathe to do that at the moment just so Creditfix can add a hefty bill for 'interest charges' we would prefer to stay married on paper!! A settlement offer has been put forward however due to their 'paperwork issues' this is stalling the process. Thank you for your input though :D



How can there be interest when the interest has supposedly been frozen? :?:


Contractual interest on loans is frozen. Statutory interest ( 8% p.a) only comes into play if you find yourself in the position to pay the full debt.
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Foggy
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by Foggy » Fri Jul 13, 2018 6:07 pm
vicky625 wrote:
Foggy wrote:
If you sell the house they will take an amount to cover the full original debt, plus fees and statutory interest (around £27.5k) less the £6k already paid, so around £21.5 k.

This is pretty much standard practice. There is, however, a possible work around. If you do not NEED to sell the house, you can OFFER to sell it for the sole purpose of funding a full and final offer. The terms of the offer are that you will not sell unless the offer is accepted. This way you can base the offer on what they would have been getting over the next few years. If you have a 5 year IVA that would be 24 more payments plus 12 for equity release --- so 36 X 180 = £6480


Hi Foggy

Is it wise to approach the creditors individually to offer settlement fees seeing as Creditfix are having 'paperwork issues'? :?:


As Merlin points out -- you are not allowed to contact creditors directly.
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