Proof of debt.

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El Presidio
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by El Presidio » Tue Apr 04, 2017 1:14 pm
Hi There,

I've just had my second annual review and they decided to keep my monthly payments the same. Unfortunately, I've just had a call saying that one of my creditors has just sent back a proof of debt that includes all the interest from my loan. They want me to extend my IVA for a year.

Can they do that after all this time?

Any feedback would be appreciated.

Cheers,

Cam
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Foggy
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by Foggy » Tue Apr 04, 2017 2:00 pm
My understanding is that they cannot add interest after the date of the IVA and, surely, you have to agree that the figures are correct and tally with your understanding ( and the figure you put forward at the start) ( again, surely, this was checked by your IP). Often these figures are slightly out, but not usually enough to tip the balance of the IVA.

I would, first of all, get a breakdown of this figure to see why it is so wildly out.
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kallis3
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by kallis3 » Tue Apr 04, 2017 2:05 pm
I agree with Foggy - you need to ask for further details/.
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El Presidio
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by El Presidio » Tue Apr 04, 2017 3:03 pm
Thank you for the replies!

The debt in question is to Moneyway loans. The initial loan amount was £5000. They apparently have only just now sent back the proof of debt, which amounts to £6800 (interest). I didn't think they could just say they want more when the IVA was already in place?

Should I ask for a letter outlining why they want this amount?

Regards,

Cam
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Foggy
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by Foggy » Tue Apr 04, 2017 3:08 pm
I would ask the IP to tell you how they have calculated this figure --- how old was the loan, and had you been making repayments ?
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El Presidio
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by El Presidio » Tue Apr 04, 2017 4:14 pm
The loan was about 5 months old. Yes, I had been making the repayments on time.
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kallis3
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by kallis3 » Tue Apr 04, 2017 4:20 pm
Agree - if it was included in your IVA I don't see how they can include interest.
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Foggy
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by Foggy » Tue Apr 04, 2017 4:25 pm
El Presidio wrote:
The loan was about 5 months old. Yes, I had been making the repayments on time.



Then there should only be 5 months interest on the reducing balance -- some of that would have been covered by the repayments.
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Michael Peoples
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by Michael Peoples » Wed Apr 05, 2017 3:43 pm
The interest on loans is often front loaded meaning the creditor can claim for the entire amount due. You need to ask your IP why they did not list the full amount as now effectively you could be in breach. the debts must have come in much higher and this could lead to the IVA being extended to achieve the original dividend. Had the debt been listed correctly then this would not have become an issue now.
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El Presidio
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by El Presidio » Wed Apr 05, 2017 4:59 pm
So Michael, I would be required to extend for 12 months? Even though this was a mistake by the creditor (Moneyway) and IP (Knightsbridge)?

I've just asked for a breakdown of the costs over the phone and the girl (who was very understanding) said she would speak to the supervisor. However, she didn't have any more information than that.

Basically, I just want to know whether I'm required under the terms of my IVA to pay the "new" amount. Or, is it too late for them to claim this back?
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Foggy
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by Foggy » Wed Apr 05, 2017 5:31 pm
If the new amount is justified and it reduces the dividend significantly, then, yes you will be required to extend to redress the balance.
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Michael Peoples
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by Michael Peoples » Wed Apr 05, 2017 9:00 pm
Did moneyway vote at the meeting as I would be surprised if they got their own balance wrong? You should speak to the supervisor and ask them why the balance was not listed correctly but ultimately it may come down to you.
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