OneAdvice.co.uk - An IVA Is A No Fees Solution ?

The smoke and mirrors art of mis-selling IVAs is littered all over the ads that pop up alongside google searches. Another outrageous example from a graphically clean site. Smooooth web design - shame about the content !

One Advice are claiming that an IVA is a no fees solution. They follow this startling revelation with the news that (quote): "There are costs involved in setting up and (sic) IVA, however, fees are deducted from the money paid to your creditors. Fees are not added to your payments."

Digest this for a moment:
Apparently, the debtor does not pay. The fees are deducted from the money owed to creditors. Great trick these IVAs. Creditors are actually paying for you to refund as little as 25% of the money that you owe them ?

Are the banks and credit card companies really that dumb ?

Of course not. The only money that is paid into a voluntary arangement comes from the debtor. That money has to cover both the payments to creditors and the fees.

It's simple maths. Let's say you have a rare 'rock solid' five year IVA and your debts total £50k. You have proposed payments at 25p in the pound. Creditors have agreed to that - so you have to repay £12,500.

If you have not contributed any other assets to your IVA fund then payments would be c.£208 per month for sixty months. So where are the fees ?

Let's say the nominee/supervisors fees total £7,000. That money still has to be paid. It is added to the total sum that you have to repay and increases the monthly repayments (over 60 months) from c.£208 to £325 per month.

That sounds like an addition to the payments to me !

But the smoke and mirrors continue to work their magic because it passes without mention that IP fees take precedence over payments to creditors. So, no matter what happens the IP will always take their money first.

An IVA is not a 'no fees solution'. It is always a 'fees first' solution for insolvency practitioners.