I was not provided the right advice by Payplan

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B.18
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by B.18 » Mon Apr 09, 2018 5:23 am
Hi, I had a debt of 54000 pounds. In 2013 I entered IVA with payplan. The initial proposal was 5 Years + 1 Year of equity clauses, based on this proposal I was able to clear 54000 pounds. But the creditor wanted the payments for 6 Years + 1 Year, which meant I had to pay the original amount borrowed + original interest and 20% on top of it. The proposal was modified and I have agreed to it than as my brain was not working at all. But today I think I was not provided the right advice by Payplan, I should have never been in IVA. Today my job is at risk because I am in IVA and I have 2 more years to go.
1. Do you think the IP has provided me with the right advice
2. Was Modification of 6 years + 1 years fair considering that I had already proposed to pay the 54000 in 5 pounds+ 1 Year for house equity?
3. Can I take any action against Payplan for this?
Any good advice will be appreciated.
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Foggy
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by Foggy » Mon Apr 09, 2018 6:54 am
Hi. I cannot comment on whether the advice was good or not as I do not know everything you were told or everything you told Payplan. but, at the end of the day they are supposed to present you with the options available and you have to decide what to chose to do.

Sometimes a creditor will ask for a 6 year basic term (NRAM always do and, it seems, Barclaycard are beginning to, maybe others). I think, in view of the amounts you were repaying, it was unreasonable. But, you agreed when you could have refused. Incidentally the creditors are entitled to get the full debt, plus fees and interest if they can --- and if the creditor who wanted this had the voting power you have little option but to accept or refuse the whole IVA and risk them going for bankruptcy.

Regarding your job .. it is not the IP's place to know everyone's employment terms and conditions and it is really up to the debtor to research the effects of the IVA first. As intimated above, the IVA would be doing far less damage than bankruptcy, which is what might have come about without the IVA.

You can complain about your IP here: https://www.gov.uk/complain-about-insol ... actitioner
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Lisa Thomas
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by Lisa Thomas » Mon Apr 09, 2018 8:32 am
I agree with Foggy's comments.

Why is your job at risk? Why was it not at risk originally when you started the IVA?

Presumably you get to keep the property in the IVA and were at risk of losing it through BKY if you did not enter the IVA?
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plasticdaft
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by plasticdaft » Mon Apr 09, 2018 8:58 am
Its been running fine for 5 years, why are you doubting the advice given now??

Why is your job at risk??

Paul
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B.18
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by B.18 » Mon Apr 09, 2018 10:31 am
B.18 wrote:
Hi, I had a debt of 54000 pounds. In 2013 I entered IVA with payplan. The initial proposal was 5 Years + 1 Year of equity clauses, based on this proposal I was able to clear 54000 pounds. But the creditor wanted the payments for 6 Years + 1 Year, which meant I had to pay the original amount borrowed + original interest and 20% on top of it. The proposal was modified and I have agreed to it than as my brain was not working at all. But today I think I was not provided the right advice by Payplan, I should have never been in IVA. Today my job is at risk because I am in IVA and I have 2 more years to go.
1. Do you think the IP has provided me with the right advice
2. Was Modification of 6 years + 1 years fair considering that I had already proposed to pay the 54000 in 5 pounds+ 1 Year for house equity?
3. Can I take any action against Payplan for this?
Any good advice will be appreciated.



I work as an IT consultant. My company puts me across different clients, in the last few years I was working for Telecom and utility companies. Now I don't have an assignment, the company has tried putting me in few banks but I was rejected because of my IVA. My company has found out now that I am in IVA and they are finding it difficult to place me, hence the risk of employment.

Since I am paying close to 20% on top of what I initially borrowed + actual interest, should I have been in IVA at all. Could I have not paid it my DMP. Do you think the IP should have advised me to take DMP, and in case that dint work out I should have been advised IVA? I know I have signed the IVA, but as I said my brain was a complete freezout at that time.
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Lisa Thomas
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by Lisa Thomas » Mon Apr 09, 2018 10:48 am
Usually the IP's initial letter to you would list the options available and why some have been discounted or are not appropriate and why the IVA is considered the best option in the circumstances however it is likely that this modification succeeded any such letter.

What advice did the IP/Nominee give you when the modification was proposed before you accepted it? That is the key.

A DMP would not have been legally binding and I suspect the same creditor that proposed the modification would not have accepted it given their stance in the IVA.

As I have said above I presume you have a property that would have been at risk of being repossessed and sold if Bankruptcy had applied.

Perhaps this was the thinking at the time when you accepted the modification but only you can know that.
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B.18
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by B.18 » Mon Apr 09, 2018 12:49 pm
Thank You. Yes I have a property. I dint want to go for bankcrupcy, but I think I dint even understand the impact of IVA on my career. I was stupid, I should have done more research myself.

Can you please advice me on the following please
1. Can I do anything to challenge the IVA term?
2. I have already paid 40,000 pound out of my original debt of 54000( Which includes the original interest as well). If I pay all the remaining instalments, I will pay close to another 28,000 pounds to IVA. I will also pay any bonus that I earn, this could add another 3000 on top of 28,000 pounds. Do you think I should fail the IVA now and deal with the bank directly. I will be out of IVA and I might still pay the same amount. At least I will save my Job? Do you see any problem with that?
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Foggy
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by Foggy » Mon Apr 09, 2018 12:56 pm
B.18 wrote:
Thank You. Yes I have a property. I dint want to go for bankcrupcy, but I think I dint even understand the impact of IVA on my career. I was stupid, I should have done more research myself.

Can you please advice me on the following please
1. Can I do anything to challenge the IVA term?
2. I have already paid 40,000 pound out of my original debt of 54000( Which includes the original interest as well). If I pay all the remaining instalments, I will pay close to another 28,000 pounds to IVA. I will also pay any bonus that I earn, this could add another 3000 on top of 28,000 pounds. Do you think I should fail the IVA now and deal with the bank directly. I will be out of IVA and I might still pay the same amount. At least I will save my Job? Do you see any problem with that?


I am curious as to the references you make to repaying the "original interest" .... the only interest you can pay is that already accrued before the start of the IVA and statutory interest if you hit repaying 100% of the original debt (including previously accrued interest) going into the IVA.

If you fail the IVA the creditors will add on all the interest accrued since the start of the IVA, which would increase your debt substantially.

You could ask for a variation to the IVA term .. but my guess is that the creditor who wanted the extra term would simply vote for it to remain and it appears that they have the voting clout to carry that through.
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Lisa Thomas
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by Lisa Thomas » Mon Apr 09, 2018 2:04 pm
If you fail the IVA you are at risk of Bankruptcy.

This will mean you are at risk of losing your property as it can be repossessed and sold in order to pay off the Bankruptcy costs, debts and interest.

The costs in Bankruptcy will be high, especially as there is a £6k tax that will be charged on any assets plus the Official Receivers costs plus Trustees costs etc.

I suspect you will probably also not avoid any employment issues if Bankruptcy ensues...
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kallis3
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by kallis3 » Mon Apr 09, 2018 2:29 pm
I agree with Lisa - you could be onto a loser
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