Why does my IVA provider not know how much I owe?

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rich783

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Post by rich783 » Thu Aug 15, 2019 3:19 pm
Is it normal for your provider not to know how much I have to pay? I was quoted a figure a year ago that is wildly different to what I’ve just been told.

Foggy

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Post by Foggy » Thu Aug 15, 2019 3:21 pm
How much you have to pay for what ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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kallis3

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Post by kallis3 » Thu Aug 15, 2019 3:25 pm
Have you had a review and have your circumstances changed?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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rich783

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Post by rich783 » Thu Aug 15, 2019 3:39 pm
Hi,

Thanks for your replies. Yes my circumstances changed quite significantly- I got a better job and I’ve moved back to parents house - my payments increased from 75 to 340 per month in Jan which I’ve been paying.
I was quoted 3,700 debt remaining in Sept last year. I was quoted 6,000 last week? The total debt was just over 6 when I started. I’m very confused.
They also mentioned something about statutory interest... mine was 192 and they said they would let me know when it lowers.

Can anybody clear this up. I feel like I was sold something I didn’t really need in my desperation!!

Thanks
Rich

Foggy

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Post by Foggy » Thu Aug 15, 2019 3:58 pm
During an IVA you actually "owe" the total original debt, plus fees and also statutory interest. Your payments continue until you hit that amount or, more often, until you pay the number of agreed payments and, then, anything left over of the debt, fees and interest is written off.

On a £6k debt the total "owing" would amount to something like:

Original debt £6,000
fees £2,500 and statutory interest at 8% per year on the reducing balance, starting off for the first year at £480.

So at the end of the first year you would "owe" around £9k, minus payments made.

The statutory interest element is awkward to calculate as it is based on the reducing balance daily.
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

rich783

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Post by rich783 » Thu Aug 15, 2019 4:05 pm
Thanks Foggy that’s the most clarity I’ve been given on this!

So I’ve spent a year paying 340 in January which is the end of my second year. How much am I looking at remaining?

As it’s not possible to over pay I’m considering asking for a figure to settle and borrowing from my Family.

Thanks again

Rich

Foggy

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Post by Foggy » Thu Aug 15, 2019 4:34 pm
If you paid £75 per month for the first year, then £340 up to january, you will have paid in around £5k.

So -- at the end of the first year something like £8k "owing". In the coming January it would be around £4,200. Around about another year after that should see it closed anyway.

This is assuming payments remain around £340. Remember that these are quick "back of a fag packet" calculations based on average figures for fees etc.
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

rich783

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Post by rich783 » Thu Aug 15, 2019 5:20 pm
Ok - that’s great - I can’t thank you enough. My provider hasn’t explained any of this to me.

Final question - i definitely can’t over pay? Say I pay 700 per month instead of 340?

Kind regards

Rich

kallis3

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Post by kallis3 » Thu Aug 15, 2019 5:54 pm
They will want to know where this extra money is coming from.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

Foggy

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Post by Foggy » Thu Aug 15, 2019 5:55 pm
No -- you can't overpay regular payments, other than the additional extras due like overtime and bonus payments or windfalls. If, say, you are due to pay £340 per month and you start paying £700 they will decide that you can afford the £700 and will make that your usual payment .... in your case that means you will end earlier, but you will be stuffed if you then cannot make the £700 after a while.

Because your debt was a lot lower than most are in an IVA and you are looking to finish early anyway, due to your change in circumstances for the better, your situation is somewhat unique.
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

rich783

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Post by rich783 » Thu Aug 15, 2019 6:09 pm
Ok - so if I can afford to pay it - which I can. I’ve had a 30% increase in my salary and basically do not pay rent... I should seriously consider overpaying? It’s completely down to a dramatic change in my circumstances - I might as well make the most of it and try and get it done earlier.

kallis3

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Post by kallis3 » Thu Aug 15, 2019 6:54 pm
As Foggy says - you cannot overpay. Consider making a full and final offer.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

rich783

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Post by rich783 » Thu Aug 15, 2019 7:10 pm
Ok. Thanks again for your advice folks - I feel so much more positive now.

Regards

Rich
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