Should I go for an IVA and shold I go with Balir Ensbury? I have doubts about them.

evenmoreconfused.com

Hi,

I would really like an opinion on our current situation.

I apologise for the long post in advance.

In Dec 2007, we bought our house (Possibly the "peak" of interest rates and house prices). we bought the house for £125k but borrow around £139k, through Birmingham Midshires. £113k is the interest only mortgage and £25.5k as an Unsecured loan (The documents say "Unsecured"). The loan part was to pay the 10% and pay off an existing £9k loan and fees etc. during this period I still had a small amount of outstanding Credit card/catalogue and Store card debt, as well as an overdraft of £1250 which I took out to help pay some upfront fees when buying the house. Our house is probably currently worth around £107k-£110k-so completely negative equity.

Overtime, as it does, our debts have risen and although each minimum payment has been made each month they have become out of control, I'll pay the minimum on the CC and then use it to top up on groceries or petrol.

My Partner was made redundant Dec 2008 and has only been able to get agency work (via NHS) since, earning between £150-£230 a week. I have a secure job and earn around £1100 a month plus £80 in Child benefit and £36 in tax credit.

But we are absolutely sinking in debt. And I'm working 6 days a week to earn enough overtime to pay extra bills etc.. (My partner doesn't have the option of OT) and yet the utilities are starting to fall behind. Money doesn't seem to stretch. (may not seem bad working all hours and had done it for years before having my daughter, but its totally different when a child needs you and a house needs to cleaned). Luckily Childcare is free.

So I have considered an IVA, I spoke to BE and they said it was probably best and could set it up, paying £180 a month for 62 months (Current payments are around £230 due to go up next month because of extra charges on Overdraft and Buy now pay later washing machine coming to an end). We have basically been making £60 worth of main grocery shopping last 3-4 weeks for the last few months. so an IVA sounded great and they said it would include the BM "unsecured" loan on top.

But since speaking to them today I'm losing faith, the person I originally spoke to was off sick and the guy I spoke to had a different opinion, the agreement arrived today and the info was wrong, firstly me and my partner's address was 10 doors apart, I was co-habiting (correct), he was married (news to me!!), I had 1 dependant child(again true) and he had none (suddenly I'm the virgin Mary??). Our debts we'reall in joint names when I told them it was only the mortgage and loan that was joint the rest was in my name (My partner only has a basic account which he's happy with). Then when i spoke to this other guy he didn't think the loan was unsecured!

So I'm already losing faith in the company and will probably cancel especially after the online reviews. I also feel I'm pulling teeth when I'm trying to get answers to my many questions. I'm losing sleep (with a 2 year old and full time job, I really need it), I'm becoming depressed and have already had the physical signs of stress i.e shingles, ulcers, tiredness...Need i go on.

So tomorrow i'm going to tell BE to stick it up their backside and phone CCCS or someone, because I cannot keep going on like this.

But I want t know what the general opinion on this company is? And mainly is it best to go for an IVA?

SOA..(monthly)

My Income-1100
My partners-800 (average)
Benefits-£116 (£80 CB and £36 FTC)

Mortgage-£661 (interest only)
BM Loan-£157 (over 35 years the length of the mortgage, payment of Mortgage and loan goes out as one payment).
Car Ins-67 (2 cars,both bangers as we work at 2 different hospitals the other side of Bristol and have to turns in picking our daughter up)
Council tax-120
Petrol-£250 (both cars are 1.4 or under)
Home Ins-25
Gas and Electric-£80-£100 (we currently pay quarterly but intent to go DD)
Water-33 (again paid 6 monthly and plan to go DD monthly)
TV Licence-£12
Virgin-£65 (phone, Tv and Internet) this can probably be smaller by £15 if we downgraded.
02 mobile contract-£23 (just me, partner is a phone phob!)
Halifax CC- £32 (minimum payment) (Balance £3300)
Halifax overdraft-£15 interest soon to double (never in the black) (Balance £1250)
Verbaudet-£10 (Balance £250)
Argos-£10 (balance £600?) minimum payment soon to rise.
Avon Cosmetics- paying nothing (Balance £220)
Groceries-£200 (ish-yet we just don't seem to be able to spend that most weeks.

Plus general extras-dentists, car tax-MOT/Car Tax/repairs and upkeep, pets, occasional hair cuts, household emergencies etc, vet bills, perscriptions, day-to-day groceries etc, etc 1 off expenses-Speeding fine (oops) etc

I look at the sums all the time, and see a + account on things, but the money just evaporates on general day to day?? I must be missing something. we do all the budget stuff...Transfer CC balances, take sandwiches to work. make home cooked meals etc.

Please advise me.

Tixy

Hi and welcome

I don't know have experience of BE but your experience so far does not sound great, if they can't take enough care to get the basic forms right then that is not a great advertisment.

Whatever option you decide on (and especially in the case of IVAs) its always advisable to get advice from at least 2 different places - preferably including one of these - http://www.moneysavingexpert.com/loans/debt-help-plan#help (which are the people recommended by this site).

So definatley speak to CCCS or one of the others before you make a decision. In the meantime you might also want to try using the debt remedy tool on the CCCS website.

Also take a look at this guide written by Martin - http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf
Well worth a read before you make such a massive decision.

trudij

Im with BE - and am now in my final year with the IVA ( 10 payments left now - yay me !!!!) and I have to say, they have been fantastic. They have new people in charge (which was news to me - but the new woman is meant to be amazing) Its like any big business really - no-one is perfect,and while Ive had a really good experience with them, they are only human,and there are people who havent had such a good time (same as there will be with every company you go to)

Having said that though - Id advise you to speak to a few IVA companies - theres also an iva forum where you can speak to people, and read lots of things about the various companies,good and bad - then you can make your mind up. Hopefully Charco will get involved in this thread too - he(?!) is a mine of inoformation about IVAs - I can only comment about my experiences,and they are only good. Of course there were a few teething problems - but they were all sorted out quickly.

Good luck with whatever you decide - I can only too welk remember the fear and stress...

evenmoreconfused.com

Thank you both for your replies, I really appreciate it.
Trudij-Did you find your monthly amount change much over the years? I'm frightemed to death that they say £180 now then change them to £300 or something as the years go by.

churchrat

hi
with the neg equity is there any reason why you are going with an iva and not considered bankruptcy? have a good look around this site and don't rush into anything. Also try posting on the dfw board--lots of help and very friendly

good luck and keep posting
churchrat

Charco_2

Trudij, You'd make me blush - This site is full such fantastic info!

Indeed BE do have new people in, including one very thorough IP I know. She is very much on the ball - and would probably go through whoever drafted this poor excuse for a proposal for a shortcut, if she ever found out!

The only obvious reservation I have about BE is that their proposal (as they've explained to you) is 62 months long instead of 60... except that the proposal itself will actually only be 60 months - if you know what i mean!? The extra two months are an up-front fee that they are charging you - which personally i would avoid HOWEVER, if you find yourself out of debt in five years time, are you really going to fret about the £400 or so you've paid up front here? You might! But you might not!

http://forums.moneysavingexpert.com/showthread.html?t=1863575

I always wonder do they take two months payments and THEN propose the IVA? (which could be rejected)
Are the two months payments refundable if the solution doesn't get implemented?
If you only paid the 60 months your IVA will run would they fail you coz they ddin't get their fees?

Perhaps Nick would be better to explain this one before i muddy the waters too much! (he works for BE)

Churchrat may have a point about protecting equity. I still prefer IVAs as a solution but did someone discuss bankruptcy with you in detail and with reference to your case? You're in negative equity now, but in four years time, if the property market improved, your IVA would be subject to a FOURTH YEAR (E)VALUATION and you might find that you've got £10k to release from your property - and you'd have to do it too or your IVA would fail! Was this discussed?

***Sorry i seem to have gone in a few tangents here! Ooops!***

evenmoreconfused.com

Thank you Charco,

I am sure that there are very professional and honest members working for BE, but I feel that the guy I have been dealing with is just wanting the "sale", no other real options have been properly discussed with me and all my questions have asked have been glazed over.

I have been trying to find out where we stand in terms of the mortgage..Although we are in negative equity the £25k loan which would be paid off via the IVA is how we paid towards the 10%, so therefor we would own that 10%. But at the moment the outstanding mortgage is still £113k (interest only, paid £125k for the house) but is currently worth £107-£110k,so negative equity despite the loan of 10%, in 5years it may be worth more, although probably not a huge amount due to the area etc..

When I spoke to him on Wednesday morning he was very helpful, then when he rang back in the evening to speak to my partner the answers he gave him were different in areas, then yesterday after the foms had arrived he was off sick and I spoke to someone else and he seemed to have a different opinion on things.

I don't want to pay out fees to then get refused 2 months down the line and end up being behind on payments that I have barely managed to keep up with in the first place.

He told me there was a 7 day cool off period-to which i'm not sure if they will still charge an admin fee for etc..But why should I pay when it's their service that has changed my mind. I also have huge fears that my payments will go from £180 one year then suddenly rise to a ridiculous, unafordable amount over the 5 year period. And checking online reviews they don't seem to be "favourite".

I'm going to get in touch with CCCS and ask them the best course of action...even freezing my credit accounts without the loan on a DMP would make a difference. They did mention DMP to me but told me it woould take 17 years (including the loan) and a charge of £35 a month.

I'm concerned that going on an IVA we wouldn't be able to remortgage-but then in our present credit rating and negative equity would we be likely to remortgage anyway? Damned if I do, damned if i don't?

Sorry for long post and endless questions, I really appreciate all the help people have given me. I'm just so confused and losing sleep. all I want to do is get straight with my finances, do my 30 hour week at work and spend quality time with my daughter who has been missing out on so much due to me working so much overtime to make ends meet and still not have the money for the occasional day out or a mummy who has the energy to dance around the kitchen when she gets home.

Would my overtime, which will show up on my bank statements make a difference towards and IVA-I told him about it but planned on only doing occasionally once the IVA was approved. also, although I do my overtime in the same employment, it's paid weekly on a "casual" basis and paid through a different payroll (but same ban account), is there a way (I lnow it sounds a bit naughty) that I could open an account for my 2 year old and have it put direct into her account so that we can have a fund in case of emergencies (i.e. car repairs etc), or would that seem really bad and bacl handed?

Charco_2

evenmoreconfused.com wrote: »

This could get longer and longer! ha ha

I am sure that there are very professional and honest members working for BE, but I feel that the guy I have been dealing with is just wanting the "sale", no other real options have been properly discussed with me and all my questions have asked have been glazed over.
IPs have a legal obligation to discuss all your options with you. This means finding out about your situation in as much detail as possible and then discussing the three or four main options with you in ways that may be relevant to your case.

I have been trying to find out where we stand in terms of the mortgage..Although we are in negative equity the £25k loan which would be paid off via the IVA is how we paid towards the 10%, so therefor we would own that 10%.
You will still not own any of your house until the mortgae drops below the value of the property.
But at the moment the outstanding mortgage is still £113k (interest only, paid £125k for the house) but is currently worth £107-£110k,so negative equity despite the loan of 10%, in 5years it may be worth more, although probably not a huge amount due to the area etc..
No-one has a crystal ball they can rub and tell you if you will or wont have equity. The whole thing is a minefield!

When I spoke to him on Wednesday morning he was very helpful, then when he rang back in the evening to speak to my partner the answers he gave him were different in areas, then yesterday after the foms had arrived he was off sick and I spoke to someone else and he seemed to have a different opinion on things.
I don't want to pay out fees to then get refused 2 months down the line and end up being behind on payments that I have barely managed to keep up with in the first place.
I know, but that's what i'm saying, I don't know what way it works with them. I know you'll only have a 60 month IVA and that, even though they'll actually be earning their fees by what they can agree within the terms of the IVA, they'll be charging you two extra payments. I dont know if that means that they will delay bringing your IVA to a creditors meeting until they've collected these EXTRA payments or if they'll collect them at the end...

He told me there was a 7 day cool off period -
I dont know what this means! Is it a sales pitch? Is it a pressure tactic?
If you sign an IVA and return it, then your IP will bring it forward to a creditors meeting. If you dont then he can't!

to which i'm not sure if they will still charge an admin fee for etc..But why should I pay when it's their service that has changed my mind.
Like all IPs, they earn their fees from the solutions they put in place.
Have you signed anything now? Some kind of commitment to them? If not then how could they enforce any charges on you?

I also have huge fears that my payments will go from £180 one year then suddenly rise to a ridiculous, unafordable amount over the 5 year period. And checking online reviews they don't seem to be "favourite".
That's not how the pay reviews work. You agree to a monthly payment and every year or so your IP will have a look at your paperwork again to see if anything has changed - if nothing has changed then there's no reason for your payments to change! The IVA is supposed to be about you paying what you can afford (no more and no less!)
So if you get a pay rise then you may have to bring 50% of it into your proposal, if your daughter turns 18, and so is no-longer a dependant, then your grocery bills etc may fall so you'll have more money to offer to your IVA. Similarly if your disposable income falls (like you have another child or have your hours cut) then you should be able to speak to your IP about coming to some arrangement to address this - it would still be important to try to reach a similar dividend to that promised at the original creditors meeting!

I'm going to get in touch with CCCS and ask them the best course of action...even freezing my credit accounts without the loan on a DMP would make a difference. They did mention DMP to me but told me it woould take 17 years (including the loan) and a charge of £35 a month.
Yeah, Debt Man companies will charge a fee for administering your Plan. CCCS get paid by the creditors who return a percentage of all they collect.

I'm concerned that going on an IVA we wouldn't be able to remortgage-but then in our present credit rating and negative equity would we be likely to remortgage anyway? Damned if I do, damned if i don't?
I'm pretty sure you wouldn't be able to remortgage in a DMP either. IT about your Credit Rating, either way it's going to be shot to bits. The sooner you deal with it, the sooner you'll be able to start mending your credit. An IVA will be registered on your file the day it starts and six years later it will be gone, you can start to rebuild it then. A DMP will keep bringing up black marks on your file until the debt is gone
(There are other bigger things to consider though when deciding which solution is right for you!)

Sorry for long post and endless questions, I really appreciate all the help people have given me. I'm just so confused and losing sleep. all I want to do is get straight with my finances, do my 30 hour week at work and spend quality time with my daughter who has been missing out on so much due to me working so much overtime to make ends meet and still not have the money for the occasional day out or a mummy who has the energy to dance around the kitchen when she gets home.

Would my overtime, which will show up on my bank statements make a difference towards and IVA-I told him about it but planned on only doing occasionally once the IVA was approved. also, although I do my overtime in the same employment, it's paid weekly on a "casual" basis and paid through a different payroll (but same ban account), is there a way (I lnow it sounds a bit naughty) that I could open an account for my 2 year old and have it put direct into her account so that we can have a fund in case of emergencies (i.e. car repairs etc), or would that seem really bad and bacl handed?
It depends on the terms of your proposal. Usually your IP will want 50% of overtime to be introduced into the IVA. Your original IVA will usually ignore overtime and be based solely on your basic income - if that is affordable and gives a suitable dividend for your creditors!
I wouldn't play silly games with the pay cheques but it's up to you! If it came back to bite you you'll be very sorry and i think it would be fraud!

evenmoreconfused.com

Thanks again Charco, that has really answered a lot of worries for me and I feel more prepared when speaking to CCCS tomorrow morning. I don't think I'll take the risk of the overtime, after all I want to be at home more. I will just have to make sure I have some money put away in case of car/home repairs etc.

I haven't signed anything yet, have the forms but but after most of the information was wrong I started to worry.

I'll keep you posted in regards to my conversation with CCCS tomorrow.

Thanks to everyone for your advise.

trudij

My payments have changed every year - but that is becuase of my overtime. If I could pay the 50% of my overtime in a lump, Id be paying £247 a month (or whatever my basic money was - its been so long I cant remember!!) right through - but becuase I cant afford to, I am putting the extra onto my monthly payments. Luckily for me, my mum has offered to lend me the £500/600 that I will need to get out of it in September - so I wont have to carry it on over.

the only thing Ive never had a straight answer to is what happens with things like my car bills - I send them in ( I managed to get that out of them!) and they log the amounts - but nothing seems to have been taken into account. I will be checking it out properly though - and with a bit of luck if they havent deducted anything, I might be able to get some money off what I owe in overtime or something. ( they want 50% of my extra earnings - surely its not unfair of me to expect them to allow for at least 50% of my unexpected bills?!!)

good luck

oh- and Charco -you are fab ! (so is Nick !!)

evenmoreconfused.com

Just an update.

Spoke to CCCS this morning, the guy I spoke to was lovely and helpful, and most of all didn't seem at all annoyed with my questions etc.. Obviously he can't advise me of the best possible route at the moment, I've got a counsellor ringing me on Tuesday next week!! (Quite a wait but understandable with being a charity and just glad to have a friendly voice on the phone).

So I'm going to cancel Blair Endesbury (hopefully they won't slap charges of me and hopefully someone will ring me as the guys number I have is going to answerphone so guessing he's still off sick).

I'm going to continue to make my minimum payments for this month as they are all due this week.

Fingers crossed there will be some light at the end of the tunnel and I won't have to do 6 days a week a work for much longer and I can have a few extra quid to spend on food shopping! And more importantly I can actually sleep at night.

Thanks all for your advice.