Payplan & my IVA, have they got it right?

[Santas Little Helper]

I'm currently just under three years into an IVA with Payplan. I pay them a sum of money each month as agreed and as part of the arangement, they review my pay slips every 6 months. The purpose of this is so that I can pay them additional funds based on my additional earnings, the idea being is that as I begin to earn more, I can pay back more, sounds fair. But my problem is that now I am earning so much more that they are asking for an additional £300 a month. The sums are like this:

On entering my IVA, I earnt £1100 ish a month
I now earn £1700 ish a month
Therefore, 50% of my additional earning goes to them, i.e. £300.

But, as my earnings have increased, my cost of living has also increased, that's inflation for you.

On entering my IVA, I was spending £700 ish a month
I now spend £1200 ish a month

But with my regular monthly payment to Paypal of £400 ish a month plus my £1100 living costs, that only leaves £200 spare, so there is certainly no way I can pay £300 extra. If I pay Payplan the regular £400 + £300, that will only leave me £1000 a month to live on and something will have to go unpaid, phonebill? car tax? car insurance?

My thinking is that the additional payment based on my additional earning should take into account my additional cost of living, but it doesnt seem to.

Has anyone come across this before and have I been screwed?

[gizmo111]

Is this definetly an IVA - or a DMP.

[Santas Little Helper]

Not sure what a DMP is, but an IVA is what I was always told I way entering.

[sequenci]

Originally Posted by Santas Little Helper

Not sure what a DMP is, but an IVA is what I was always told I way entering.

this was a legally binding agreement drawn up by payplan acting as insolvency practitioners?

how long is it for in total?

[Santas Little Helper]

Sequenci,

the IVA is for 60 monthly payments and I'm allowed 3 payment holidays in the case of an emergency, so it could effectively last 63 months (5 years, 3 months)

[sequenci]

Ok, it is certainly an IVA rather than a DMP (Debt Management Plan). Have you had a go at filling in your income/expenditure as it stands currently to show Payplan that you need a realistic amount to live on? IVAs usually take all of your disposable income so they can increase although I would argue that the payments need to be reasonable and realistic.

Payplan would have the power to modify the agreement, the creditors would need to agree this though.

If you feel that payplan are not managing the IVA very well you could complain to them and then their regulatory body (there are a few – more info here http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/ipcomplaint.pdf )

[Santas Little Helper]

Sequenci,

The figure of £1200 living expenses is what I submitted last May (or about then) during my review. But as far as I am aware, all they use this for is to make sure they cant squeeze any more money out of me by upping my regular monthly payment. The additional payment as agreed to in the agreement do not refer to my monthly cost of living at all, only to what I was earning in 2004. From my point of view, if they want to take this extra money, then I have less money available each month and so they shoudl reduce my regular monthly payment.

The other thought that has entered my head today is along these lines:

36 months paying £425 a month = £15300
24 month paying £725 (£425 + £300) a month = £17400
Total paid = £32700

My original debt was for about £25000, so what happens to the other £7000?

[gizmo111]

My original debt was for about £25000, so what happens to the other £7000?

IP fees see here http://www.consumeractiongroup.co.uk...ling-debt.html

I am still not convinced this is an IVA - what % return did you ofer your creditors?
I thought Payplan passed you onto a Insolvency Practitioner and usually used Shaws and then Payplan's involvement would cease.

[Santas Little Helper]

Gizmo,

I was originally with Shaws 3 years ago, everything was hunky dorie, then one day it was Payplan handling it all, but it's the same people, they just said they changed their name.

[gizmo111]

Originally Posted by Santas Little Helper

Gizmo,

I was originally with Shaws 3 years ago, everything was hunky dorie, then one day it was Payplan handling it all, but it's the same people, they just said they changed their name.

So it does sound like an IVA - have you got copies of the creidtors agreement - cos the whole point of an IVA is to pay a reduced amount - not morethan the debt!

[Santas Little Helper]

Gizmo,

It's all stored at home in a file. I'll sit down tonight and dig out the actual figures for it all and then yourself and others can make informed comments. I am beginning to think that by the end of this year I will be in a position to "buy out" of the IVA, especially with claiming a load of bank charges back.

I do know what you mean though, I pay £425 for 60 months, that's about what the original debts mounted up to. I do remember Shaws bullying me after the first NO vote saying I had to contribute more each month or I would just end up going bankrupt.

[gizmo111]

IVA's are not meant for your creditors to get back 100% of the debts - they agree to an amount that you can afford, and in return agree to write some off, knowing that the IVA is binding agreeement and alternative to Bankruptcy, where they would get nothing back. Typically 45-50% is paid back altough this can go as low as 25% and as high as 85%.

You seem to be paying back 110%. Let us know what is in those docs tonight.

[Santas Little Helper]

OK, here are my figures. I owed:

HSBC £1880.00
Intelligent Finance £10955.00
Capital One Bank £295.00
Creation Finacial Service £290.00
GE Capital Bank £1560.00
HSBC Card services £2100.00
Student Loans Company £5725.00

Total £22805.00

I was earning £1168.11 per month and had living costs of £923.00 per month.

This left £245.11 per month which was offered and was voted NO by Intelligent Finance because they objeted to my living costs. So I reduced my living costs and offered £425.00 which was accepted. I was so terrified of going bankrupt that I would have gone further if pushed.

So, I have so far paid nearly £13,000 in my monthly payments and estimate that I have over £12,00 more to pay plus any extra earnings payments as I mentioned earlier. So in 2 years time, I will have repaid my debt and more.

I have estimated that the 8 financial organisations including Lloyds TSB (who werent in the IVA) owe me approximately £10,000 in charges but I will have to wait for the replies to my letters for an exact figure.

So am I paying too much? Have Payplan screwed me? Should I complain and get my payments reduced even though I can afford them? Will Payplan just say "Oh, you've repaid your debt" once I hit the original figure I owed? What can I do about this?

I open the floor to comments, help and experience...

[kaz-mex]

Hi, ive just come out of an iva through an early settlement, you should only have to pay them what you can afford each month ask them for a monthly income & expenditure form.also re paying back more than you owe i ended up paying an extra £7,000 i.e. their costs because i had a clause which meant if i had sufficient equity at the anniversary of year 4 i had to remortgage upto 75% of this having not had enough equity at the beginning of the plan. I ended up paying back 98.35 in the pound left me feelin abit raw about IVA'S.good luck anyway!