IVA charges

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mickhaynes2
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by mickhaynes2 » Fri Mar 17, 2017 5:11 pm
Hi, I'm 3 years into an IVA, paying £400 per month, with a £51000 debt, just, not missed a payment, just had my yearly report,
and they say there bill to date is £7200 that's almost half of what I've paid back, I have inheritance due, and they want all the money transferred,
but I'm worried that once they have my money, they will just say I owe them whatever, and I will have no choice, but to agree otherwise the will not release my money,
Everything was going fine until my mother died, now its a nightmare, they want all information, address of property, estate agents, Executor (my sister)
Written confirmation that my share will be paid into my voluntary arrangement without deduction,
also written confirmation from the Executor that my half will be paid into voluntary arrangement,
if they don't receive this, they will issue me with a notice of breach, which may result in the failure of my voluntary arrangement,
I don't no what to do, ive just about had enough, I'm afraid i will end up with nothing.
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kallis3
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by kallis3 » Fri Mar 17, 2017 5:17 pm
Hi,

I'm afraid that you will always owe the full amount of your original debt plus fees and possible statutory interest so inheritance will need to be paid across and, if anything is left over it will come back to you.

You will have to comply with their wishes I'm afraid.
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Foggy
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by Foggy » Fri Mar 17, 2017 5:20 pm
I am sorry for your loss. Unfortunately this is standard practice with an inheritance. The fees are as agreed by creditors and the Nominees fee comes out before any debt is repaid, from then in the Supervisors fee comes out as a percentage of each payment.

With a £51k debt you would need to pay back in about £73k to clear everything at year three. So they will take the inheritance up to that value ( less what you have already paid in ) and refund you anything left over. This will end the IVA early.

If they breach (fail) the IVA your creditors will be able to pursue you for the debts, which could include making you bankrupt, which would take the inheritance anyway.

All you can do is abide by the agreement you have already signed ( the terms of the IVA)
mickhaynes2
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by mickhaynes2 » Fri Mar 17, 2017 5:46 pm
why will it go up to £73000, when i only owe 51 there last statement said I owed 51,000 less what i have paid,
id be better of failing the IVA and paying them back directly
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Foggy
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by Foggy » Fri Mar 17, 2017 6:04 pm
If your full original debt is £51k, you always owe that. Then you owe fees ( around a couple of grand plus 15% of payments made). On top of that you also owe statutory interest at 8% per annum. In the vast majority of cases we never get anywhere near paying that lot and what isn't paid at the end of the agreed payments only gets written off right at the end.
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chrissy12345
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by chrissy12345 » Sat Mar 18, 2017 9:43 am
Charging fees on inheritance is immorral and shouldn't be a windfall for the IP. I would challenge it all the way, in Court if necessary.
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Foggy
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by Foggy » Sat Mar 18, 2017 9:52 am
chrissy12345 wrote:
Charging fees on inheritance is immorral and shouldn't be a windfall for the IP. I would challenge it all the way, in Court if necessary.



The fly in that ointment, of course, is that the terms have been agreed to by all parties, morally a debt is a debt and is still due to be repaid (even in unfortunate circumstances ) and the court fees would be crippling and impossible to raise.
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chrissy12345
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by chrissy12345 » Sat Mar 18, 2017 10:02 am
I don't see that there is any problem as far as the debt is concerned. But why should the IP pick up £12k or whatever it is for next to no work. The original agreement really is irrelevant as it would never have been agreed if the inheritance was known to be a likely scenario. Pay in full, IP covers his costs and everyone is happy. Don't pay a penny more.
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kallis3
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by kallis3 » Sat Mar 18, 2017 10:27 am
I'm afraid the IP does do work and needs to be paid - bear in mind they are keeping an eye on your IVA for at least five years and nobody works for nothing. Staff also need paying.

None of us know if an inheritance is likely when we enter into an IVA.
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chrissy12345
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by chrissy12345 » Sat Mar 18, 2017 10:53 am
I'm afraid you are missing the point. In this scenario the IP should cover his costs, no more. The IP getting a windfall from someone's inheritance is wrong in anyone's book.
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kallis3
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by kallis3 » Sat Mar 18, 2017 11:15 am
As far as I am aware, inheritance goes towards paying off your debts, hopefully in full.
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Michael Peoples
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by Michael Peoples » Mon Mar 20, 2017 9:01 am
It is normal practice for the IP to be paid 15% of realisations and this is agreed at the beginning by creditors, debtors and IPs alike. If a windfall increases the amount into the pot then the IP fees increase accordingly. In most cases this is actually a condition put forward by creditors and only affects the debtors if they repay in full.
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Lisa Thomas
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by Lisa Thomas » Wed Mar 22, 2017 1:15 pm
Unfortunately both the creditors and you agreed to their fees in the original proposals.

Of course at that stage you knew nothing of the windfall and no doubt it would not have affected you but is only now affecting you as it seems that there might be sufficient funds from the inheritance to cover these costs and so they must be paid I'm afraid.
mickhaynes2
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by mickhaynes2 » Thu Mar 23, 2017 10:26 am
I know I have to pay back what I owe, but why should I give all my mothers details,
Surely I can get a final offer and then instruct my soliciter to transfer the funds, it says nothing in my contract about giving all these details can I not send an Email saying I will transfer all money owed when it arrives,
If I transfer all I know there is goin to b hidden fees that they will not mention until they have all money
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Michael Peoples
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by Michael Peoples » Thu Mar 23, 2017 10:48 am
Your solicitor could write to the IP and ask for a settlement figure for the IVA and give an undertaking to pay the funds on receipt. This would mean all your personal details would not be revealed and should be acceptable to any IP. The IP would also then have to detail their fees and costs which you could query if you wished.
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