IVA fees when settling early

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emma388

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Post by emma388 » Wed Jul 11, 2018 9:21 am
I have 5 and a half years left on my IVA.
The monthly amount is £205
The amount I owed originally was about £16,000, now it is around £14,000.
My house has been valued at £120,000, with £35,000 outstanding to pay on the mortgage.
I want to sell the house and pay my creditors. But the IVA company have said I will have to pay THEM (Aperture) £5,000 - £10,000 in IVA fees if I sell the house and settle the IVA early. They won't however, give a an exact figure in writing UNTIL AFTER THE HOUSE IS SOLD!!!!!!!!
So do I just stay in my house and wait til the IVA is over to avoid the early settlement fee?
I don't object to paying back my creditors but Im not happy with a £10,000 fee to the IVA company

Advice please? Thank you

Foggy

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Post by Foggy » Wed Jul 11, 2018 10:22 am
emma388 wrote:
I have 5 and a half years left on my IVA.
The monthly amount is £205
The amount I owed originally was about £16,000, now it is around £14,000.
My house has been valued at £120,000, with £35,000 outstanding to pay on the mortgage.
I want to sell the house and pay my creditors. But the IVA company have said I will have to pay THEM (Aperture) £5,000 - £10,000 in IVA fees if I sell the house and settle the IVA early. They won't however, give a an exact figure in writing UNTIL AFTER THE HOUSE IS SOLD!!!!!!!!
So do I just stay in my house and wait til the IVA is over to avoid the early settlement fee?
I don't object to paying back my creditors but Im not happy with a £10,000 fee to the IVA company

Advice please? Thank you

What they are asking for is not an "early settlement fee" but is the fee agreed by creditors at the start of your IVA. To settle from the sale the usual procedure is that the whole of the sale proceeds get paid to the IP and then the IP returns any surplus. Because statutory interest is calculated on a daily basis they couldn't give the figure now.

Very roughly -- if the original debt is £16k you would be looking at paying around £21k to settle (less payments already made). Assuming 15% fees (exactly what fees have been agreed will be detailed in the Chairman's Report of the initial meeting).

Now --- if you do not need to sell the house, you could go about this another way: OFFER to sell the house only for the purposes of a full and final offer. Basically you say that you will sell and pay £XX ... but you will only sell if the offer is accepted. Base the offer on the remaining payments (plus 12 for equity release). So, if you have 66 payments to go, plus 12 for equity releaase, the creditors are expecting to see a further £16k. Offer them £15k (or even a little less) --- both creditors and Aperture will be saving money on admin costs.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk
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