Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Concerned75
    • By Concerned75 15th Jul 17, 6:01 PM
    • 227Posts
    • 123Thanks
    Concerned75
    Worried IVA ending up paying for 7yrs
    • #1
    • 15th Jul 17, 6:01 PM
    Worried IVA ending up paying for 7yrs 15th Jul 17 at 6:01 PM
    I'm in the 5th yr of my IVA and as far as I can remember, based on a phonecall right at the start of my IVA, I was told it would need to be extended to an extra yr. I have so far paid £8,900 into the IVA.
    Now I am in my 5th year with an original debt of £22k and I am unable to remortgage my house due to my lender Northern Rock.
    After a lot of messing about with a valuation, by my IPs, they decided to get their own agents to do a market valuation.
    They sent me the following information:
    " if you have a third party (friend/family) that are able to pay £23,634.00 into the IVA, which is your 100% debt plus our charges then your IVA would complete, alternatively you can continue to make your planned payments till April 2018, then once your 12 additional payments in lieu of the equity start, again if you have a third party that are able to pay the 12 payments in one lump sum, once this is received your IVA will complete."

    I don't remember this IVA agreed to continue for 7yrs and at the time, my mental health was not 100% after a serious illness.
    My question is:
    A: should I seek further advice regarding this large payment they are asking for which is not writing off some of the original debt as it will be greater in the end.

    B: Pay up until April 2018 as I believe was arranged, then let the IVA fail and negotiate or seek a different debt management plan that doesn't lock in my house or legally binding or:

    C: I want to sell up and move away for health reasons, so should I speak to my lender/IP and see if there is an option of selling and whatever it sells for, pay off the IVA and get away from this stressful nightmare. I just want a quick sale, I'm not looking to go through estate agents, just national home buyers etc...
    In short, I just want out as quickly as possible. 6 years is plenty for a £22k debt.
    I could be wrong, but I sense that because I owed too little in the first place my IVA hasn't generated enough money for all concerned and the fact my house isn't worth much either (£118k) that I'm being penalised for the shortfall as I'm reaching the end. I've had no missed payments or holidays since it started also.

    Constructive advice welcome.
Page 1
    • fatbelly
    • By fatbelly 17th Jul 17, 7:53 AM
    • 11,221 Posts
    • 8,389 Thanks
    fatbelly
    • #2
    • 17th Jul 17, 7:53 AM
    • #2
    • 17th Jul 17, 7:53 AM
    The way I read this is that your IVA started in April 2013. You are now in your fifth year. You cannot remortgage to raise equity. You will therefore make a further 12 payments to complete in April 2019 instead of April 2018.

    This all seems normal.
    • sourcrates
    • By sourcrates 17th Jul 17, 10:14 AM
    • 11,896 Posts
    • 11,396 Thanks
    sourcrates
    • #3
    • 17th Jul 17, 10:14 AM
    • #3
    • 17th Jul 17, 10:14 AM
    Yep, normal scenario if you are unable to re-mortgage.

    It will be 6 years, not 7, all this should of been explained to you at the start, i appreciate, due to your health, you may of missed some of this information.

    I assume you will have a big wad of paperwork from the court/IP, it will also tell you in there.

    Also an IVA is not always guaranteed to write off any part of your debt, lots get mis-sold on that basis.
    Last edited by sourcrates; 17-07-2017 at 10:16 AM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
  • National Debtline
    • #4
    • 17th Jul 17, 2:16 PM
    • #4
    • 17th Jul 17, 2:16 PM
    Hi Concerned75


    The way I read this is that your IVA started in April 2013. You are now in your fifth year. You cannot remortgage to raise equity. You will therefore make a further 12 payments to complete in April 2019 instead of April 2018.

    This all seems normal.
    Originally posted by fatbelly

    I second fatbelly's post above. I don't see any reason that your IVA will continue beyond six years, and assuming that you can continue the required payments until April 2019 you will have completed your obligations.


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • Johnsmith2016
    • By Johnsmith2016 26th Jul 17, 6:44 AM
    • 433 Posts
    • 223 Thanks
    Johnsmith2016
    • #5
    • 26th Jul 17, 6:44 AM
    • #5
    • 26th Jul 17, 6:44 AM
    This seems normal.
    • DorisTrousers
    • By DorisTrousers 26th Jul 17, 8:54 AM
    • 478 Posts
    • 280 Thanks
    DorisTrousers
    • #6
    • 26th Jul 17, 8:54 AM
    • #6
    • 26th Jul 17, 8:54 AM
    I am not so sure. I hope I am wrong, but Northern Rock were a majority creditor for a whole host of people who had to propose IVA's a few years ago because of their terrible "Together Loan" package, an unsecured loan running alongside the mortgage for 25 years. As a majority creditor, to accept the IVA they would insist on 6 years at the start, rather than 5. This may seem unfair, but if you had 20 odd years left to run on it otherwise then 6 years was, and is, a fair compromise.

    Accordingly, if NR modified the original proposal to 6 years then the equity that cannot be released means that it is a 7 year IVA. The only thing to do is check your Chairmans Report or ask for a list of any modifications of the original proposal from your I.P. You will have been given the chance at the time of the MOC to accept or reject this modification, if indeed this is what has happened in this instance.
    • fatbelly
    • By fatbelly 26th Jul 17, 6:39 PM
    • 11,221 Posts
    • 8,389 Thanks
    fatbelly
    • #7
    • 26th Jul 17, 6:39 PM
    • #7
    • 26th Jul 17, 6:39 PM
    I am not so sure. I hope I am wrong, but Northern Rock were a majority creditor for a whole host of people who had to propose IVA's a few years ago because of their terrible "Together Loan" package, an unsecured loan running alongside the mortgage for 25 years. As a majority creditor, to accept the IVA they would insist on 6 years at the start, rather than 5. This may seem unfair, but if you had 20 odd years left to run on it otherwise then 6 years was, and is, a fair compromise.

    Accordingly, if NR modified the original proposal to 6 years then the equity that cannot be released means that it is a 7 year IVA. The only thing to do is check your Chairmans Report or ask for a list of any modifications of the original proposal from your I.P. You will have been given the chance at the time of the MOC to accept or reject this modification, if indeed this is what has happened in this instance.
    Originally posted by DorisTrousers
    I didn't know this and you could be right. But then the OP has made a mistake somewhere as they say they are in their fifth year (at July 2017) and have been told:

    ' you can continue to make your planned payments till April 2018, then once your 12 additional payments in lieu of the equity start, again if you have a third party that are able to pay the 12 payments in one lump sum, once this is received your IVA will complete."

    That doesn't sound like 7 years. Maybe they started in April 2012 and they are in their sixth year now.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,841Posts Today

6,854Users online

Martin's Twitter
  • Shana tova umetuka - a sweet Jewish New Year to all celebrating. I won't be online the rest of t'week, as I take the time to be with family

  • Dear Steve. Please note doing a poll to ask people's opinion does not in itself imply an opinion! https://t.co/UGvWlMURxy

  • Luciana is on the advisory board of @mmhpi (we have MPs from most parties) https://t.co/n99NAxGAAQ

  • Follow Martin