iva set up fee

Get expert opinion. This is the place for new questions to be posted.
6 posts Page 1 of 1
 
 

jonb77

User avatar
Posts: 2
Joined: Tue Sep 14, 2010 10:49 am
Location:

Post by jonb77 » Tue Sep 14, 2010 11:00 am
Hi

apologies if this has been answered elsewhere.

In short, my Dad has run up £140,000 of debt, mostly cards and loans, behind my Mum's back. He's finally come clean about it and obviously it needs paying.

As their house is worth 400k upwards and only has a 58k interest only mortgage on it they can clearly cover their debts.

A visit to the CAB initially suggested an IVA was a good option and they'd get to pay off debts at a reduced rate (I thought this sounded optimistic given equity). However, a later meeting with Grant Thornton - set up by CAB - suggested a sale of house IVA is best option.

They contact creditors to get interest stopped and then parents sell house within a year, pay creditors in full and move into something. However Grant Thornton charge £3,000 to set up this IVA plus a ridiculous 15% of all debt on completion. That means Grant Thornton gets about 15k for sending out a few letters and arranging a meeting or two (the 58k wouldn't be part of IVA).

Other types of IVA are apparently not an option as their incomings only just cover outgoings.

What I'm wondering is whether the above sounds reasonable. Surely someone must be able to set up an IVA for less that 15k. Are CAB-recommended accountants really meant to fleece people with debt problems? Nice little link up Grant Thornton has got there...

any help massively appreciated

Jon
 
 

Declan at DebtFreeDirect

User avatar
Posts: 1277
Joined: Wed Jul 15, 2009 10:44 pm
Location: United Kingdom

Post by Declan at DebtFreeDirect » Tue Sep 14, 2010 11:05 am
Hi Jon
Welcome to the forum.
Sale of house IVAs are becoming more common. Given your Dads circumstances, it may be worth looking at a remortgage for the value of the unsecured debt? Given the difficulties in gaining a remortgage these days it might hard but certainly worth a try in the first instance?

Thanks
Declan Murray
Debt Advisor
Debt Free Direct - the UK's largest IVA provider.
http://www.debtfreedirect.co.uk/iva/
 
 

jonb77

User avatar
Posts: 2
Joined: Tue Sep 14, 2010 10:49 am
Location:

Post by jonb77 » Tue Sep 14, 2010 11:11 am
Thanks Declan.

I should have said my Dad's 64, my Mum 62 so I assume that would count against a remortgage.

My Mum does have some savings she had wanted to hang on to, but given debt will have to paid in full, maybe best to use these to pay bulk of cards and loans off - maybe mortgage co would agree to small extension.

What annoys me is that their financial position is fine in many ways - savings and equity - yet the lies have had a huge impact of my Mum. If my Dad had just said something a year or two back none of this would be needed...
 
 

kallis3

User avatar
Forum Expert
Posts: 76945
Joined: Mon Mar 17, 2008 4:02 pm
Location: United Kingdom

Post by kallis3 » Tue Sep 14, 2010 11:12 am
Welcome from me as well.

I agree with Declan that you should explore other options. You don't have to deal solely with Grant Thornton either.

Visit www.iva.com for a list of companies and reviews. Give one or two a ring for free and impartial advice.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk
 
 

Declan at DebtFreeDirect

User avatar
Posts: 1277
Joined: Wed Jul 15, 2009 10:44 pm
Location: United Kingdom

Post by Declan at DebtFreeDirect » Tue Sep 14, 2010 11:16 am
Hi Jn
Unfortuantely debt does tend to creep up and very quickly can mount up. Your payments age may go against them, but I would still recommend they try it. Kallis is correct aswell in that you (they) should speak to a few different companies to get more advice.

Thanks
Declan Murray
Debt Advisor
Debt Free Direct - the UK's largest IVA provider.
http://www.debtfreedirect.co.uk/iva/
 
 

MelanieGiles

User avatar
Industry Expert
Posts: 47612
Joined: Tue Jan 09, 2007 10:42 am
Location:

Post by MelanieGiles » Tue Sep 14, 2010 10:45 pm
I would have thought that fees of around £4k would be more commensurate with the work required - however do bear in mind that fees are set by creditors and GT themselves will probably limit their colleagues fees to a much lower level - given that this firm also represents a number of leading banks who your parents may owe money to.

If you feel you have not been properly advised, then seek a second opinion. Have your parents considered an equity release which I have recently done quite successfully for clients of mine recently and could leave them with sufficient money to offer to creditors and remaining in their own home.
Regards, Melanie Giles, Insolvency Practitioner
6 posts Page 1 of 1
Return to “Ask IVA Forum and Industry experts”