15 months ago i entered into an IVA having a little over £14,000 in debt. Since that time I have paid almost £18,000 into the IVA and with another 45 months to pay will end up paying almost £10,000 more than the original debt. Surely this can't be right? I understand that having received PPI refunds that these are used to clear the full amount rather than the 50% of debt that was agreed and this is as it should be but no-one told me that I would have to pay what amounts to around 70% interest. Is this correct?
The most you will ever pay, given an upturn in your finances, would be the full original debt, plus fees and possible statutory interest.
On a debt of £14k, I would expect fees in the order of £4k and statutory interest, so far, of about the £1500 ---- so, to finish today you would need to have paid in £19.5k. As the statutory interest is calculated on the reducing balance, I would hazard a guess that you would meet the golden figure well before the planned end of the arrangement and will finish early.
Be aware, though ...... I get the impression that some of the total paid so far that you quote has come from PPI refunds. So what actually hits the IVA is around 30 - 40 % less than the refund (claims company fees). So you might have actually paid in less than you imagine.
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