Is it correct that I have to pay back more than my original debt ?

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Shane.37
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by Shane.37 » Sat Dec 02, 2017 9:52 am
Hi my original creditors debt was 16823.88 and up to the 1st of Jan 2017 payments of 12549.91 had been distributed to the creditors leaving a balance of 4273.97. I have had confirmation that from Jan 2017 to date I have paid 5880.94 to Payplan of which 4552.38 has been paid to creditors. Based on this, payments to creditors total 17100.29 which is greater than my original debt. However Payplan are still asking for more... is this correct, or should my IVA now be clear??
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Foggy
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by Foggy » Sat Dec 02, 2017 10:00 am
During an IVA you always owe the full original debt, plus fees and statutory interest (unless excluded). On a debt of around £17k, this would be about £27k over 5 years. So your IVA will continue until you hit that figure or the term comes to it's contractual end, at which time anything unpaid will be written off.
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Shane.37
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by Shane.37 » Sat Dec 02, 2017 10:54 am
Foggy wrote:
During an IVA you always owe the full original debt, plus fees and statutory interest (unless excluded). On a debt of around £17k, this would be about £27k over 5 years. So your IVA will continue until you hit that figure or the term comes to it's contractual end, at which time anything unpaid will be written off.


Thanks, however the amount of £17100 is an actual amount distributed to my creditors after fees etc, I have to date paid in over £24000 inc of fees. My question Is should I pay more than the original debt back to my creditors as I'm sure it was stated that I would never pay back more than 100% of the debt to creditors after fees.
Hope you can advise
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MerlinL14
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by MerlinL14 » Sat Dec 02, 2017 11:05 am
Your original debt of circa £17K would have been calculated minus any interest payments. In effect your total debt is going to be much higher once interest and IVA fees are added for the 5 year term of the IVA. Foggy has made the calculation already which is a conservative guestimate.
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Shane.37
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by Shane.37 » Sat Dec 02, 2017 11:08 am
Hi

Can you advise if when 100% of the debt to creditors after fees has been paid, do Payplan still have the right to ask for equity or an amount of cash if we are unable to remortgage?

Totally stressed out........

Thanks in advance
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Foggy
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by Foggy » Sat Dec 02, 2017 11:13 am
You state the actual debt to creditors was £16823.88 and they have had £17,100 in disrtributed divends so far -- is this correct ?

The debt stated in the initial proposal often falls a little short of the actual amount owed, due to the fact that it is based on figures given about a month or two before the date of acceptence of the IVA (and some of these could be based on statements already a month behind), so, depending on thw make up of the debt, the actual figure could be a few hundred higher than that in the paperwork. In my case, some of the claims were higher and some were actually lower -- but the end result is that I was about £600 adrift.

So -- on your figures then, I would imagine that the actual debt has been repaid (but, of course, the creditors are still due statutory interest at 8% per annum, calculated daily, on the reducing balance ... so will still be getting a dividend to cover this).
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Foggy
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by Foggy » Sat Dec 02, 2017 11:18 am
Shane.37 wrote:
Hi

Can you advise if when 100% of the debt to creditors after fees has been paid, do Payplan still have the right to ask for equity or an amount of cash if we are unable to remortgage?

Totally stressed out........

Thanks in advance



Topic merged.

Yes, you still have to go through the equity release hoops unless, as stated above, you have paid the full original debt, plus fees and statutory interest. They are moikely to extend t IVA by 12 months in lieu of equity, depending on your actual release clause wording ---- if you hit that figure mentioned earlier before the end of the IVA, including extension, then the IVA will conclude.
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Shane.37
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by Shane.37 » Mon Dec 04, 2017 6:44 pm
Foggy wrote:
Shane.37 wrote:
Hi

Can you advise if when 100% of the debt to creditors after fees has been paid, do Payplan still have the right to ask for equity or an amount of cash if we are unable to remortgage?

Totally stressed out........

Thanks in advance



Topic merged.

Yes, you still have to go through the equity release hoops unless, as stated above, you have paid the full original debt, plus fees and statutory interest. They are moikely to extend t IVA by 12 months in lieu of equity, depending on your actual release clause wording ---- if you hit that figure mentioned earlier before the end of the IVA, including extension, then the IVA will conclude.



Thanks for the advise.
I'm now at my wits end.. I'm on a fixed monthly salary, apart from March when I received a bonus. Payplan was informed and received my payslip and advised the additional amount required, which was paid. Not at the last review I received a letter stating no more additional monies was owed. However I have now received an email stating they require an addition £540 which I do not have. I really don't understand how I could owe any more, as they have recieved my payslip and P60. (No extra earnings or pay rise / only the bonus).
I am now at the stage where I have paid 100% of my debt to the creditors Inclusive of fees. All that is outstanding is the statutory Interest.

What would happen if I fail my IVA at this point?? Could I speak to my creditors direct??

Thanks
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Foggy
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by Foggy » Mon Dec 04, 2017 7:02 pm
Ask them to explain, chapter and verse, where they have got this extra figure from,

You cannot negotiate with your creditors direct, while in the IVA.

If you allow the arrangement to fail you will be back to square one with creditors -- although you appear to have paid back all of the original debt, they can add back all the missed interest, which could well be as much as the debt was in the first place !
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