DMC extending my payments to 72 months despite never missing a payment and paying more than original agreement.

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ayesha
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by ayesha » Tue Jul 04, 2017 1:17 pm
Im in my final year of my IVA with only 8 payments left. I have never missed a payment, and have ended up paying more than the original amount as i got a new job and had additional income. At the beginning i declared my debt as the Debt Management Company advised me, though the Creditors claimed for more. All this information was made available at the beginning of the IVA agreement.

My Debt Management company have now told me i'm in breach and there is nothing i can do, because a creditor has sold the debt to someone else, and they want to claim for the higher amount (even though my DMC have had this information since day 1)

They are now telling me i have to pay another 12 months so 72 months of payments

If have already paid more than the initial claim, and if i pay another year i will have paid back 3-4k more than the initial "creditor higher" level of debt.

My understanding was that if i didn't miss a payment, and stayed within the terms agreed at the initial consultation then i would only have 60 payments. how can they suddenly ask for another year when i've not breached anything.

I feel like my DMC is not working with my best interests at heart.
Last edited by ayesha on Tue Jul 04, 2017 2:48 pm, edited 1 time in total.
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Foggy
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by Foggy » Tue Jul 04, 2017 1:38 pm
Your DMC has the responsibiltiy to ensure that as much of the original debt is repaid, within the terms of the IVA. It would seem that the debt claimed is substantially higher than the one disclosed at the start of the IVA --- or, at least as included in your proposal, which you would have read and agreed before signing. Most of us reprt the debt level based on the last statement prior to entering into the IVA and are usually out by a few quid by the time the claim is verified, but this isn't usually enough to sink the ship. Why is this claim so far above the reported debt as to cause a breach? Have the new company buying the debt added interest or charges ( which they are not entitiled to do) ?

I would get the reasons for this discrepancy from your IP (who should liase with the new creditor) so you can challenge the breach, if need be.
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Michael Peoples
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by Michael Peoples » Tue Jul 04, 2017 1:40 pm
If this debt was understated it should have been dealt with before now. It can be a breach if the debts are understated by more than 10% and the IVA can be extended to compensate but the claims should have been agreed long before now. Ask your IP why they have admitted the higher claim and why this was not addressed years ago.
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ayesha
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by ayesha » Tue Jul 04, 2017 2:35 pm
Michael Peoples wrote:
If this debt was understated it should have been dealt with before now. It can be a breach if the debts are understated by more than 10% and the IVA can be extended to compensate but the claims should have been agreed long before now. Ask your IP why they have admitted the higher claim and why this was not addressed years ago.


Thanks - Harrington Brooks were fully aware of what the creditors claimed for 4.5 years ago when i took out the IVA vs what i stated. Thank you for the advice and i'll push back to them to understand this wasn't addressed from Year 1 and the agreement adjusted accordingly. Either way the original agreement had me paying £326 a month in repayments, and i have been paying close to £470 - £500 a month since year 1, along with additional payments of almost £3500 from bonuses and overtime.

At 4.5 years i have already paid more that the total amount I stated, and with the extension will have paid more than the total amount claimed by the creditors.
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Foggy
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by Foggy » Tue Jul 04, 2017 3:46 pm
ayesha wrote:
Michael Peoples wrote:
If this debt was understated it should have been dealt with before now. It can be a breach if the debts are understated by more than 10% and the IVA can be extended to compensate but the claims should have been agreed long before now. Ask your IP why they have admitted the higher claim and why this was not addressed years ago.


Thanks - Harrington Brooks were fully aware of what the creditors claimed for 4.5 years ago when i took out the IVA vs what i stated. Thank you for the advice and i'll push back to them to understand this wasn't addressed from Year 1 and the agreement adjusted accordingly. Either way the original agreement had me paying £326 a month in repayments, and i have been paying close to £470 - £500 a month since year 1, along with additional payments of almost £3500 from bonuses and overtime.

At 4.5 years i have already paid more that the total amount I stated, and with the extension will have paid more than the total amount claimed by the creditors.


During an IVA you always owe the full original debt, plus fees and possible statutory interest. If you reach that figure the IVA will end early.
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ayesha
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by ayesha » Tue Jul 04, 2017 4:07 pm
Foggy wrote:
ayesha wrote:
Michael Peoples wrote:
If this debt was understated it should have been dealt with before now. It can be a breach if the debts are understated by more than 10% and the IVA can be extended to compensate but the claims should have been agreed long before now. Ask your IP why they have admitted the higher claim and why this was not addressed years ago.


Thanks - Harrington Brooks were fully aware of what the creditors claimed for 4.5 years ago when i took out the IVA vs what i stated. Thank you for the advice and i'll push back to them to understand this wasn't addressed from Year 1 and the agreement adjusted accordingly. Either way the original agreement had me paying £326 a month in repayments, and i have been paying close to £470 - £500 a month since year 1, along with additional payments of almost £3500 from bonuses and overtime.

At 4.5 years i have already paid more that the total amount I stated, and with the extension will have paid more than the total amount claimed by the creditors.


During an IVA you always owe the full original debt, plus fees and possible statutory interest. If you reach that figure the IVA will end early.


Thank you that's good to know. As my DMC always keep saying theres more and more "fees" and i was wondering whether them claiming there is a breach on something they've known about for the last 4.5 years would constitute more fees for them to claim?
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Foggy
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by Foggy » Tue Jul 04, 2017 4:40 pm
They can only claim fees as already agreed in the proposal (worth having a look). Usually these days it is a percentage of realisations, but, sometimes on a time spent basis.
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