Hi
I am currently in a trust deed (just passed 1 year) for about 8,700 of debt and 4,250 fees initially. I have paid 1,700 so far. With CPI increase it should be about 12,200 left.
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I might be receiving a large pay increase - from 2,250 monthly to about 2,950 - due to switching jobs. This would increase my spare from about £120 which is my current payment to £700 approx. This is not including any increase in cost of living. (would reduce it to perhaps £600)
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However, unfortunately, being missold the IVA based on having no assets and having a low debt - If I were forced to pay the £700 I would clear the debt in 17 months. I would also feel pretty miserable about not being able to treat myself for getting such a pay rise.
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If i were to pay everything off by the end of the trust deed (should end Aug 2027) then the payments would be:
12,200 / 36 = 338.Â
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Is this irrelevant? Would they just make me pay more and pay it off early? Would I end up overpaying the debt and fees?Â
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I don't mind paying £340/month and enjoying the rest as a pay rise..
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Hi Hawthorn,
You've mentioned "IVA", given the forum, I'm assuming this is in error and you are in a Trust Deed? This is an important distinction as the two solutions treat pay rises differently. If you are in an IVA, you will likely have to commit 50% of the payrise to the IVA, though you should check the terms set out in your Arrangement.
On the basis that you are in a Trust Deed, the commitment you have made is to pay the full balance of your disposable income to the arrangement for 4 years. The net balance of the payrise will need to be paid to the Trustee, though both your income and your expenditure should be assessed to verify what your new affordability is.
The allegation of misselling is a serious one. Having been assessed as having £120 disposable income per month, the three debt solutions you qualified for (assuming you're based in Scotland) were DAS, Protected Trust Deed and Sequestration. Sequestration treats your income the same way as a TD, and you would still have been required to commit your full disposable for 4 years, under a Debtor Contribution Order. There would also likely have been an application fee of £150, and if you came into a windfall sufficient to clear the debt, the costs of Sequestration are usually greater than a TD.
Based on £8700 worth of debt and a disposable income of £120 per month, DAS would have taken six years and one month - quite a considerable difference to the PTD or Sequestration.
If you do believe you were missold, you should complain to the Insolvency Practitioner's firm, and if unsatisfied, complain through the Insolvency Complaints Gateway