15,000 people are being asked by Creditfix to agree to a variation that will increase the fees Creditfix gets from 15% to 23%. These are the Knightsbridge customers whose IVAs have recently been sold to Creditfix,
If you have had one of these emails, do you have to agree? What are the pros and cons?
IVA fees do matter
Creditfix has said in the email about the proposed variation:
The adjustment does not affect your monthly contribution. The cost is borne by your Creditors and reflects increasing costs of administration.
It is true this increase won’t change your monthly payment. But there are three situations in which you are affected by how large the IVA fees are:
- if you have a joint debt in your IVA and your partner doesn’t have an IVA, then higher fees mean that less of this joint debt is repaid by your IVA payments so your partner has to pay more. For most people this is irrelevant or would be a fairly small amount;
- if your IVA fails, then you are left owing your debts plus the IVA fees, less the amount you paid in. So if the fees are higher, you are left owing more money. About a quarter of IVAs fail, so this affects a lot of people;
- if you pay off your IVA in full, paying all of your debts, perhaps because you have an inheritance, a redundancy payout, sell the house or large PPI refunds, then you are the one that pays the IVA fees, not your creditors.
And there is another case where you may be affected by higher fees. If you want to settle your IVA early because you are struggling, your creditors may want a larger settlement because higher fees mean they get less. This is less definite than the other three situations, as the decision to accept an early settlement is based on each individual case.
What are the pros and cons?
The advantages of agreeing to the variation
The proposed variation includes the removal of any minimum dividend clause. This sort of clause is very unusual. If you have one, then deleting the clause would be good. If you aren’t sure, ask Creditfix to tell you, including sending you a copy of the minimum dividend clause.
I can’t see any advantages for the large majority of ex Knightsbridge clients. When Creditfix did a similar variation a few years ago, they offered to let the customers keep some PPI refunds, but I don’t think there is an incentive being offered to Knightsbridge customers.
Higher fees are a disadvantage – and they will affect people near the start of their IVA more
If your IVA is in the last few months, you can be pretty sure it’s not going to fail, and it’s unlikely that you will get a sudden windfall. So you may decide you don’t care about the proposed change and you are happy to sign.
But if you are at the beginning of your IVA, then it’s much more likely that either your IVA will fail or you will repay it in full, and then the higher fees are much more likely to matter to you.
The other changes in the proposed variation seem minor and I don’t think many people will be worried about them.
Do you have to agree to the variation?
I have seen some comments on forums saying that some people have been told by Creditfix that they have to sign or they are in breach of their IVA and it may fail.
UPDATE I have been told by Creditfix that that is incorrect, that they won’t propose any variation without the client’s agreement and that no-one should be told their IVA will be terminated if they don’t agree, which could never happen. Their customer service team manager has today reminded all of this team that this is definitely not the case.
That’s good news.
I can’t say if you should agree to the variation. That may depend on the terms of your IVA and the details of your own financial situation. If you want advice, go to your local Citizens Advice or a Law Centre.
Should you take a loan to end your IVA early?
Improve your credit record after an IVA
Mr S. KILBEE says
Proves the point iva companies are only in it for their own gain. Creditors lose millions due to these astronomical fee’s so you owe 100,000 they want 23,000 grand of it.. So you pay in full that would be 123,000. Sorry iva companies are gunna shoot themselves in the foot because more people who don’t own property will just go bankrupt as it will be cheaper in the long run. Enough said
A Piglit says
Nice one Camel! They have stopped pestering me. What a bunch of weasels.
Gary098 says
I agree but 300 pounds each from 15000 peaple to transfer from Knightsbridge to creditfix is a lot of money to arrange a variation meeting
Jonesy says
Oh crap, I’ve signed it not really understanding this!! For god’s sake ????
Gary098 says
Hi received a letter from creditfix this morning say they not received payment from me for the last three month and haven’t received a compete income and expenditure form .Both these things are wrong just checked my records bank statements say I have made payment income and expenditure was received on 18 Nov also received annual report saying may revert to the creditors in due course.ps when sorted out now want a explanation from creditfix and apology in law it state their should be correct systems in place and peaples personal data should be correctly stored and passed also work as security in part time.Also in Nov checked direct debt(standing order with creditfix) they Sayed to keep things as normal direct debt will transfer over from Knightsbridge .Could if mistake also ask for correct annual report done .Ps haven’t phoned yet but no I’ve made payments with evidence and evidence of income and expenditure been sent and you have received at creditfix or Knightsbridge
Jo says
I need to cut a very long story short but my IVA with Knightsbridge was meant to end in November 2017 however I instead get notification to say Creditfix was taking over my Iva. It had been 5 years and I hadn’t missed a payment however Creditfix are saying that Knightsbridge raised my payments a year ago after a review they insist Knightsbridge informed me by phone and letter I received neither. Creditfix say my Iva is not ended, I am £800 in arrears Knightsbridge never informed me I wasn’t paying enough and when I spoke to them in July last year they said all was on track for me to finish in November. I now don’t know what to do why should I accept these arrrers when I wasn’t informed of an increase and why should I even trust just Creditfix word on this a company I have had no dealings with do I have to accept them as taking over my case when in my opinion there should be no case anymore does anyone have any ideas? Thanks
Sara (Debt Camel) says
I am afraid you have no right to object to Creditfix taking over your IVA. £800 extra would be £67 a month – did your income go up? if so, did any of your expenses also increase?
Jo says
Tbh my income is very varied. A large amount of my income is unsocial hours my income can go either up or down depending on how many unsocial hours I work. Plus even if my income went up my child tax credits went down.My main issue is I was not informed that my monthly payments had to increase, Creditfix insist Knightsbridge send me a letter and tried to call me about it once but I honestly didn’t receive any and why would they only attempt twice in a year to contact me, I spoke to them over the phone on many occasions for other issues in that year and they never mentioned I was not on track or I wasn’t paying enough, I can’t increase payments if I’m not aware I should. Also I just find it a bit suspect that in July Knightsbridge tell me I’m all on track to finish in November then all of a sudden this company I know nothing about takes over and all of a sudden I’m looking at another maybe 6 months of payments. I’ve made adjustments to my life now to fit into the financial means I thought I now had, made promises to my son and booked things for myself I haven’t been able to before so this is a huge blow one I’m not convinced is fair. Thanks for replying to me
Sara (Debt Camel) says
“I just find it a bit suspect that in July Knightsbridge tell me I’m all on track to finish in November then all of a sudden this company I know nothing about takes over and all of a sudden I’m looking at another maybe 6 months of payments.”
I am afraid that is probably just an unfortunate coincidence. Suppose Knightsbridge had decided you should may more. It is now Creditfix’s job to check that you have paid everything so your IVA ompletes.
Sara (Debt Camel) says
But I think you should ask for details about how these extra payments were calculated as you don’t feel they were correct.
Gary098 says
They usually take your payments for bills off your bankstatements if like me you are on a electric key and gas card you will need to send in electric and gas statement in .Also been asked for petrol cost how much do you use for work and for pleasure but cost still does not breatch original allowance I make sure always use pay at pump as this appears on bank statement as petrol if doesn’t will reduce expenditure and say you are not using this amount try not to pay cash for essential bills make sure they appear on bank statements
Lynn says
My IVA was taken over by Creditfix this year and they charged me £400 to ok they with my creditors at a meeting at which they proposed they would up their charges to 23%. However my creditors rejected this. They have now done my review and despite my incomings lowering and my outgoings raining I have been told I have to pay an extra £30 pm. I’m considering letting it fail. I’ve worked so hard for 3 years to pay it but the pressure from month to month is making me ill. I accept I have to make reasonable steps to pay my debt but I can’t even afford to eat properly! Their assessments are not fair. It’s no wonder that people do silly things to themselves in these positions.
Sara (Debt Camel) says
That sounds a very difficult situation. Have you asked Creditfix why they want to increase your payment when your income has fallen and your expenses have increased?
Are you buying or renting?
Garry says
Hello just been informed creditfix had variation meeting for the above terms all were rejected including the minniman dividend thought they were supose to have it within three months. Next approaching end of year 4 will get a pay rise of 2’2 percent which is less than inflation .Also had a accident at work early in the I sliced the top of my finger off I could claim currently pay 80 pounds a month into iva is their any point in me claiming would all the money be taken into my iva could I try to make a deal with been in year 4.Also one of the creditors asking me to reduce energy gas and electricity and says I could have got cheaper car insurance also say their is cheaper energy company tariffs out their.Annual review due November took your advice will send in six months pay and bankstatements in.ps are they allowed to ask me to reduce my bill costs they do not breatch my original allowances on my income expenditure my car insurance as gone down.Ps the creditor said he will keep phoning me Any advice on any of above would be appreciated
Sara (Debt Camel) says
“Also one of the creditors asking me to reduce energy gas and electricity and says I could have got cheaper car insurance also say their is cheaper energy company tariffs out their.” one of the creditors in your IVA just approached you and told you this?
Gary098 says
Also received telephone call from possible false hm inland revenue saying I have not paid enough tax .ps I’ve traced the telephone number to Manchester area .Also got my last year income and expenditure and say they can help me reduce them.
Sara (Debt Camel) says
the HMRC phone call sounds a lot like scam to me. https://www.gov.uk/government/publications/phishing-and-bogus-emails-hm-revenue-and-customs-examples/phishing-emails-and-bogus-contact-hm-revenue-and-customs-examples
“.Also got my last year income and expenditure and say they can help me reduce them.” who sent you this?
gary smith says
hi thanks for help, on original income and expenditure said was allowed 45 pounds on electric and 45 pounds on gas a month. First year income and expenditure review team said I was only allowed 10 pounds for electric and 10 pounds for gas they said I was only allowed this allowance because it only showed 20 pounds on my bank statements all the figures they take for bills are taken from my bank statements a part from statutory allowances .that is a month .On first review seemed they had earmarked my fuel costs for reduction .Also got a car this was agreed in my original proposal was allowed in original agreement 145 pounds of petrol a month on first annual review asked to divide how much petrol I need to get to work and how much of this is for pleasure..i no 145 pounds for petrol is a lot but it was agreed in original proposal. this is in first year by making these adjustments and more would make a saving of 110 pounds I would be allowed to keep 50% and my payment would rise from 80 pounds to 135 pounds a month .ps I use a electric key and for gas card have not had smart meters installed .now send in payment transaction statement both from electric and gas..rent of course is going up by more than inflation now on year 4 review with credit fix