She didnt go to CCCS

RAS

Millie

CCCS set up their own IVA compamy about 6 months ago. called CCCSVA I think. They only recommend this is it is totally appropriate (they reckon about 3% of their customers) really as a way of keeping control over the quality of the service.

jackie_w

RAS wrote: »

Hi Jackie

Advice from CCCS is free but if she goes on an IVA, then she has to pay fees (about £5-6000) for the Insolvency Practitioner's fees. She has to pay these who ever she arranges the IVA with.

This is another reason why an IVA/trust deed is such a stupid idea IMO. She could do DMP or go bankrupt without paying those sort of fees. DMPs are free if organised with debt charities. Not sure what the Scotish fees for Bk are but they are less than £500 in England.

I think you need to be with ehr when she speaks to the Money matters person.

Does she realise how hard it is going to be to re-mortgage on an IVA? It is almost easier as a discharged bankrupt.

And do you all realsie that if she goes bankrupt the OR can review and undo any arrangments that she has made to reduce her assets over the previous 5 years. They tend not to go back more than 2-3 years but they can legally do this for 5 years. So there is no guarantee that this supposed fix will work?

RAS, what does OR mean?

So, let me just make sure ive got this right, does this mean that her creditors can basically make her sell her house, for 5 years even if she has paid this money?

She said that the man told her £500 of the £1000 would be for solicitor fees.

Jackie

jackie_w

milliemonster wrote: »

If this guy is coming back on Friday to sign the paperwork with your sister, is there anyway you can be there?, if your sister is determined to go through with this and you are going to lend her this money, then I think you have every right to be there and ask questions yourself

Millie,

My sister has asked if I can be there on friday. Im going to ask him who this cheque is made payable to? I want a breakdown of where that money is going too?

Jackie

Oh I should say this money hasnt to be paid just now. Apparently, it wont be needed until after Christmas.

milliemonster

jackie_w wrote: »

RAS, what does OR mean?

So, let me just make sure ive got this right, does this mean that her creditors can basically make her sell her house, for 5 years even if she has paid this money?

She said that the man told her £500 of the £1000 would be for solicitor fees.

Jackie

Jackie, OR is official receiver, they deal with releasing assets to pay off debts when you are bankrupt. Basically with an IVA as far as I understand it, they look at the equity you have in your house at the beginning of an IVA and you have to agree to release this sum at the end of the IVA on top of the monthly payments paid into it over the course of the 5 years, this is why so many IVA's end up failing because, once on an IVA it is very difficult to remortgage, so people are faced with a final bill that they can't raise and are then made bankrupt. This is why IVA's have been missold so many times as in many cases it would have been better to go bankrupt in the first place. IVA's have been sold to many people on the premise that it wipes out their debts without going bankrupt and once the 5 years are up they are completely free (although even if the IVA succeeds, your credit file is trashed for a further 6 years)

RAS

OR - Official Receiver - the person who take charge of your accounts and assets when you are bankrupt, deals with your creditors and sells any assets that you have.

The OR also has the power to investigate any sale of assets or other disposal of assets that have taken place over the last 5 years and to reverse the arrangments or demand the money back.

There was a huge ruckus when one tried to reverse a divorce settlement in which the ex got the house. I think it went to the Lords who decided that the purpose of the deal was a clean break settlement not an attempt to dispose of assets unfairly.

However if they believe you have tried to protect assets from loss in bankruptcy, they can reverse the deal. If you made preferential payments to a creditor, particularly a family member, they will try and get the money back as well. Causes all sorts of grief over on the BK forum as people often want to pay back their family debts and go BK on the rest and it is not allowed.

I am not up on Scottish trust deeds but in England, the usual deal on an IVA is that any equity in the house in year 3 or 4 will be release to pay the creditors. They will not sell the house but she will have to take out a mortgage to cover the equity release.

With no current equity, your sister could go BK now, have no equity to release and either buy back the Beneficial Interest for a small fee (£221, I think) or you could buy the BI and sell is back when she was discharged, and once she is discharged it is unlikely that there would be any further issue.

She really needs proper advice on all the options.

One thing though. if she does a DMP. trust deed or is an undischarged bankrupt, she cannot take out any further credit. And discharged bankrupts find it easier to get a mortgage than consumer credit.

misspoppy

Hi Jacky

You really aren;t doing your sister any favours lending her this money. If it were me I'd say I'm only giving you money if you speak to CCCS and they say that there is no other option but to pay this man the £1000. Surely you can't afford to blow that money because thats what you will be doing. You won't be letter her down by taking this strong stance you will doing the right thing by her.

its not easy to say no to family but I've had to do it in the past and I think it went some way to sorting them out in the long run. Think very hard before you write the cheque because that man is going to tell you everything she wants to hear except the amount of commission he will pick up as a result of this deal.

RAS

jackie_w wrote: »

My sister has asked if I can be there on friday. Im going to ask him who this cheque is made payable to? I want a breakdown of where that money is going too?

Oh I should say this money hasnt to be paid just now. Apparently, it wont be needed until after Christmas.

Do not let her sign anything. Refuse to pay the cheque until you have taken the documents to a legal advisor or independent advisor who can expalin what this ruse it about.

Do you have the nmae of this company? Have you checked them with the FSA and TS?

GeorgeUK

Jacky - what income does your sister have?

I never realised it was a Scottish debt we were talking about. The Trust Deed is the equivalent of the English IVA. Does she have any income with which to make contributions to her creditors? I would advise you to look into DAS and if this would perhaps be an option (Debt Arrangement Scheme).
http://www.moneyscotland.gov.uk/das/das_display.jsp;jsessionid=C53CDA68C572FC35D933E682CB892EBC?pContentID=92&p_applic=CCC&p_service=Content.show&

MrsTinks

Sorry had to dash off but i think RAS has answered the questions you asked anyway

In short you sister needs far more advice that this sales man (which is what he is!) can give her. She needs someone like CCCS to look at things with her and then she needs to take their advice. Unless she does that please don't bail her out in any way shape or form! It won't be helping her in the long run.

jackie_w

GeorgeUK wrote: »

Jacky - what income does your sister have?

I never realised it was a Scottish debt we were talking about. The Trust Deed is the equivalent of the English IVA. Does she have any income with which to make contributions to her creditors? I would advise you to look into DAS and if this would perhaps be an option (Debt Arrangement Scheme).
http://www.moneyscotland.gov.uk/das/das_display.jsp;jsessionid=C53CDA68C572FC35D933E682CB892EBC?pContentID=92&p_applic=CCC&p_service=Content.show&

Hi George,

Yes, she is working, she earns about £24000 per year, plus her child benefit and basic tax credits. She should be getting maintenance money from her ex of £60 per week, but, we're not sure if he is going to be forthcoming with that, so, we think that she is going to have to speak to the CSA about that.


Jackie