IVA rejected what now?

wanttoseethelight

Hi, we've had our IVA rejected and its going to be re-admitted. The only person to refuse was NOrthern Rock, whom we only consolidated debt with on advice from a financial advisor! We've sold our home and in 4 weeks will have to be in a rented house.( not got that sorted yet!) If the IVA is rejected again, is bankruptcy the only option as there wont be enough from house sale to settle debt; far from it. It seems mental that we have been to CAB and now have a specialist company dealing with the IVA (free as recommended by the CAB) and if the IVA is rejected, where we're offering to try to sort the debt, then if we go bankrupt, nobody gets any money! I'm confused, stressed, ill, sleepless and after over 1 year of initially going to the CAB, it seems no further forward. I feel hopeles and cry too much. PLease help.

churchrat

hi
just wanted to say hello and welcome, most of us have felt like this at one time or another. This too, will pass, although I am sure it feels never ending at the moment.
Can I ask why you are still going ahead with the IVA if you have no equity to protect? does one of you work in an area where you are not allowed to be bk?
lots of clever people will be on with help soon, keep posting

churchrat

wanttoseethelight

Hi, phew, I am not alone, I panicking here. Thanks for replying. Advised to go ahead again to reapply for IVA and we need the resettlement money to get us into another house. CANT move ourselves as hubby medically retired and has back prob so cant lift stuff- my back is dodgy and had op on it so we have to have help with this. We've sold house and if all goes through in next few weeks, the money will help us relocate, as advised from IVA people and if it coes to it, we could use £1k plus to go bankrupt. The IVA people come free as recommended by CAB and we're just following their advice but Im in circles

wanttoseethelight

Hubby doesnt work and Im not sure about my job..I daren't ask! Was hoping to sort things without them knowing. However, a coleague of mine has gone BK and he still works there

Ames

Really don't understand why you're going for an IVA instead of BK? An IVA gives you a much tighter allowance and will last for 5 years. BK would last a year (maybe less), you'll have more to live on. Either way your credit rating's a mess, but with BK the stress is over with quicker. If your Hubby's medically retired it sounds like you've got enough on your plate without stressing. What happens if his needs change, in an IVA you wont be able to alter the payments accordingly.

Charco_2

While there are more reasons than that for people to consider an IVA over Bankruptcy (jebus i hate the IVA negativity on these boards)... it would look like your better option would be Bankruptcy!

In answer to the original question, NO bankruptcy would not be your only option if the IVA is rejected again! Bankruptcy certainly would be AN option but you would still be able to consider a DMP also. Or you could consider putting a shredder under the letterbox and ignoring Norn Rock when they write their begging letters!

wanttoseethelight

Thanks for all the replies. I'm posting on the wrong boards and even messing this up-sorry. I thought BK lasted 6 years? I'm sorry to sound so pathetic but I've had so much duff info and the stress is killing me. I've done all the CAB have suggested and after a year now, I wish I had done BK and will look at that. We went with IVA as it was the only way we could get a relocation help from the sale of house. Plus we would need 1K plus to go BK ive been told.Ive not defaulted on any mortgage or any utilities. God, Im oncoherant- sorry. so messed up

Useless_with_wonga

Hi,
This happened to us too about 18 months ago now and in retrospect it was the best thing that could have happened.
I remember the feelings of hopelessness and sat praying for the IVA to be accepted.
It wasn't but as I say in the intervening period we have shifted more debt than ever we would have been the case if we were now 18 months into an IVA.
In addition no one other than the mortgage company have any say or control over our house. No one other than us has any say over how much overtime I work and how much of that resulting money I can or can not keep. In an IVA I would have lost 50% of it straight away.
So all is not lost. We went into a DMP. It might not be suitable for your circumstances but what I am trying to say is that all is not lost there are always options. It's choosing the right one that is difficult. There are a lot of negative posts about IVA's and I remember when we were going through it I could not understand why this was so.
It's only now that I am far more educated in these matters thanks mainly to this forum that I can see where the negativity comes from. IVA's can be an option but are not athe panacea that the IVA companies make them out to be.
As for your IVA being free that certainly will not be the case. I suspect that there will be no upfront fees which is a good start but remember these people regardless of recommendation do not and can not work for free.
In a nut shell what happens is that they will get a cut of your payments into the IVA in their fees.
These are agreed with the creditors during the IVA meeting hence some creditors disagreeing with the fees and voting "No" to the IVA as from their point of view the money being skimmed off in fees could be going to them.
This is often the sticking point in IVA's not the amount you are paying but the amount the IVA company are taking in fees.
Say you are paying £100 a month into an IVA as an example on a £12000 debt.Thus a 50% return.
The creditors see nothing until the end of the 5 year period by which time you have paid in £100 X 60 months therefore £6000 (50%) which is sat in the IVA companies bank earning interest.
Let's forget about the remortgaging clause as it clearly does not apply to you.
The IVA company now take £2000 in fees leaving £4000 for your creditors. You can see where it falls down from the creditors point of view.
Not forgetting of course that should you be unable to maintain your payments into the IVA you will still end up using the example £12000 in debt plus the £2000 in fees plus the loss of any payments made into the IVA making your situation even worse than it was to start with.
If your IVA proposal has failed my advice would be to let it be. If a DMP is not an option then as you say Bankruptcy looks like the answer unless it will impact upon employment which I don't think was applicable in your case.
You are already secured in rental accomodation so that's a positive and as others have said it is all over and done with within 12 months. If it is pride then I say swallow it take control and get it sorted as quickly as you possibly can in order that you can get on and live your life free of debt.

wanttoseethelight

WOW that was enlightening and I'd not thought about it in those terms, perhaps due to ignorance. Thank you so much. We're NOT in rented house yet as the sale of this has to complete first, but hopefully it should happen within 4/5 weeks. I need to get clued up more! As you say, the IVA people will be creaming off their cut and I have to say Id not considered that. With illness and stress, Ive not learned enough and need to asap. Thank you so much for taking the time to reply so eloquently.

wanttoseethelight

So do I need to stay with the IVA company who the CAB advised us to go with or do I just go back to the CAB or go to the court and ask for the BK forms? Sorry, Im not sure what to do x

Nargleblast

Re UWW's point about creditors not getting anything through an IVA until the end of the five years.......I am six months into an IVA and have just received statements from some of my creditors showing that they have started to receive payments. It also states in my IVA terms and conditions that they get so many percent in the first year, then so many months at so many percent etc. Obviously terms and conditions may vary with different companies.

You have no obligation to stay with the firm recommended, there are other companies around you can try if you wish. As many would say, don't go to a firm that charges you up front for advice. If you go on the bankruptcy forum someone will help with specific questions re bankruptcy. If you want to do a statement of affairs using the SOA calculator at the top of the forum, then maybe some people can suggest ways of budgeting so that a DMP could be feasible. Whatever you do, get as much info as possible and don't be pushed into something you are not totally happy with.