Knightsbridge transfer to Creditfix - threat to fail IVA if fee hike not agreed!

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caroleann
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by caroleann » Tue Dec 19, 2017 8:33 pm
My Mum's IVA has been transferred from Knightsbridge to Creditfix. They are asking for her to sign agreement to a change in the terms, one of which is an increase in supervisors fees from 15% to 23%. They have advised if she does not sign they will fail the IVA. Are they allowed to do this and is it legal for them to fail the IVA if she does not agree? I'm concerned on the potential impact of this increase over the next 3 years she has left i.e if her IVA was to fail for any reason will this leave her with more to pay than she would have had etc. I have called The Insolvency Service, Money Advice Service, CAB, Insolvency Practitioners Association and R3 and none of them can tell me the answers. I've read through all the documentation including the SIP3 and SIP9, even down to contract law in the case of contract variation but nothing is clear. I have read posts on the forum here saying she isn't obligated to sign but Creditfix are saying she is.
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Foggy
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by Foggy » Tue Dec 19, 2017 8:53 pm
She is not obliged to sign any variation. The IVA has already been agreed between her and her creditors and is binding. On what grounds are they threatening to fail the IVA ?
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caroleann
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by caroleann » Tue Dec 19, 2017 9:07 pm
I asked 'what if my Mum doesn't sign to agree to these changes?' and was told 'she will be in breach of her IVA and it will fail'. I then said 'well if the creditors don't agree then it just stays at 15%, that seems a bit unfair that they have a choice but my Mum doesn't'. They would not/could not give me a basis for this. Hence me looking for an actual reason or law I can quote to them when I call back.

I am furious with them - my mum suffers depression and anxiety and all of this is making her so much worse :( they've also been sending what I assume must be an automated email asking her to sign daily, including one at half past midnight, despite them being told twice they need to deal with me including all emails.
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caroleann
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by caroleann » Tue Dec 19, 2017 9:11 pm
I should add - if I could be 100% certain that her agreeing to this increase would definitely not have a negative impact on her IVA at all - no extension or no extra to pay if the IVA failed - I wouldn't mind so much. But I myself am not overly certain about it or the potential impact. All they repeated was 'it won't affect her monthly payments, and the length of the IVA will stay the same with 100% written off at the end'.
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Leigh.p
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by Leigh.p » Wed Dec 20, 2017 6:45 am
Hi,

I am in a the same situation, receiving daily emails to remind me to sign. I have no idea what to do and am so worried about the monthly payments going up. I am just at the end of year 1 and had only just started to relax a little after suffering terrible anxiety and stress leading up to and after commencing the iva. I'm a single Mam of 2 and a full time student so I just cannot afford any increase. I feel completely out on a limb now and feel the service I'm paying for is no longer going to be there, ie someone at the end of the phone for queries. So unsettling and worrying.
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kallis3
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by kallis3 » Wed Dec 20, 2017 8:36 am
You don't have to sign it - they are just bullying you. You have your original paperwork to back things up.
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caroleann
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by caroleann » Wed Dec 20, 2017 8:48 am
But if they are saying that's what they will do, I need a bit more of a lawful argument... I'm going to call again today and make it clear I will fight this for her but 1) I need to know if legally they can do this (which they seem to think they can) and 2) what the potential impact is in future if she does sign.

Their take is there will be no negative impact to her at all so they see no reason not to sign, and they say they can enforce her signing it.
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Foggy
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by Foggy » Wed Dec 20, 2017 9:05 am
caroleann wrote:
But if they are saying that's what they will do, I need a bit more of a lawful argument... I'm going to call again today and make it clear I will fight this for her but 1) I need to know if legally they can do this (which they seem to think they can) and 2) what the potential impact is in future if she does sign.

Their take is there will be no negative impact to her at all so they see no reason not to sign, and they say they can enforce her signing it.



The only (tenous) grounds they would have for failing the IVA is "faliure to comply with a reasonable request" --- I would argue that being bullied into signing something you do not agree to is not reasonable. If you sign it will not impact payments at all unless your mother finds herself in a position to pay 100% of the debt (inheritance or lottery win).

The problem is, if they do decide to fail the arrangement, there is no recourse available to the client ( your mother), unless you wish to take the matter to court.

I would also seriously consider lodging a formal complaint with their regulators.
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kallis3
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by kallis3 » Wed Dec 20, 2017 9:09 am
I agree!
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recovering
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by recovering » Wed Dec 20, 2017 9:12 am
HoI was transferred to Crefitfix 3 years ago they tried to get all of us to sign new T&C’s
I refused by phone and they accepted this
They cannot force you to sign them. After the initial mess of the transfer my IVA has been pretty smooth with them, any time I have challenged them with anything other than my agreement stated they backed down. I know it is unnerving but if yoi do not agrre with the request simply refuse. Most of us put that in writing via email too.
Hope this helps
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caroleann
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by caroleann » Wed Dec 20, 2017 9:45 am
If she signs, and then say in 12 months time the iva fails (for any reason) will the fee increase leave her in a worse position than she would have been at 15%? As I understand it means that she will have paid less off her debts. Would she then owe anything extra to CF too?

Equally she will have paid less to the creditors at the end of the 5 years, would that mean a risk of them extending it or something? She owed just over £6k at the start, so say at the end she's only paid £4k to creditors is the remainder then totally written off? Or does it depend on her proposal?

So sorry for what might seem silly questions but I want to feel certain I know all potential downsides and know what I'm talking about before either agreeing or fighting.

Thanks all for your help so far x
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Foggy
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by Foggy » Wed Dec 20, 2017 10:02 am
caroleann wrote:
If she signs, and then say in 12 months time the iva fails (for any reason) will the fee increase leave her in a worse position than she would have been at 15%? As I understand it means that she will have paid less off her debts. Would she then owe anything extra to CF too?

Equally she will have paid less to the creditors at the end of the 5 years, would that mean a risk of them extending it or something? She owed just over £6k at the start, so say at the end she's only paid £4k to creditors is the remainder then totally written off? Or does it depend on her proposal?

So sorry for what might seem silly questions but I want to feel certain I know all potential downsides and know what I'm talking about before either agreeing or fighting.

Thanks all for your help so far x



If the IVA fails the position will be that creditors will add back lost contractual interest so the debt will significantly increase anyway -- the extra fees will make little real impact on the grand scheme of things. Anything unpaid at the end of the term is written off. They can only extend for equity reasons or arrears (unless a variaition is put in to reduce payments by any large amount -- say due to loss of income).
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caroleann
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by caroleann » Wed Dec 20, 2017 10:38 am
So really then, she could sign it and there will be no real impact to her? Might be less stressful to her.
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Foggy
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by Foggy » Wed Dec 20, 2017 10:42 am
caroleann wrote:
So really then, she could sign it and there will be no real impact to her? Might be less stressful to her.


Only in the unlikely event of being in a position to pay 100% of the debt ( it does happen!).
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recovering
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by recovering » Wed Dec 20, 2017 3:01 pm
This makes me cross. It is bullying, especially on someone who is more vunerable!
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