1yr in to my IVA - still confused and angry

Gardening_Glen

Hi,

I had an IVA approved in Feb 2009 , but i am 1 year into it and feeling very frustrated and confused. I had a 100% mortgage with 20% unsecured loan (£35k) tagged onto the mortgage + a further £50k on loans and credit cards. I had a hard divorce in 2004 and took on all the debt from my marriage, plus released all the equity to my ex wife. I thought i was on top of the debt, but in reality I was spiralling downwards. I have now remarried and feel terrible that my wife has married into the debt. It's put a huge strain on us both and i am constantly stressing about the situation.

Although i was earning good money before entering the IVA , i realised that on a monthly basis i was paying over £2k in interest payments alone and was not making a real dent in the £85k unsecured debt. I searched on google for citizens advise bureau and debt management. The search gave me what appeared to be a CAB advice forum and i completed the questionnaire. In hindsight i was naive as this was just a use of google adwords to attract people to a private website. I was contacted the following day by the IP who, later, was to propose and pass my IVA. When i first spoke to my IP it was proposed that i put £750 towards an IVA proposal. My mortgage payment was £1370 per month and other outgoings ( not including cards and loans that were to be put in the IVA ) totalled around £800. At the time, i was earning around £60k a yr in a sales job and with my wife's income of around £15k per yr, we would bring home around £4400 net . This left us around £1400 a month . I was told by my IP that i could save around £1000 a month in order to accrue around £60k over the 5 years of the IVA and have a lump some available when the IVA was over . Again , i was naive and thought that this would be possible, something that in hindsight is impossible to do with my IP monitoring my every penny spent. I feel so stupid for believing their tactical use of a difficult situation

On the day of the IVA I received a call stating that the creditors would not agree to £750 a month and was told that the new figure was £1386. I did not know where to turn. I'd spent 6 months waiting for this day and had endured months of aggressive calls from my creditors . I agreed as i thought this would be the end of the problem and i could get on with paying off the IVA

The total monthly outgoing is £3600 now and although my OTE income + my wife's income should be around £4300 net , i work in a very volatile market. My basic is £25k /yr with a 'discretionary' loyalty bonus of £8k /yr . The rest is commission and is based on my monthly sales figures. Over the first 8 months i was earning slightly less than when the IVA was signed but it was easily manageable. However over the last 4 months, i have had a very successful time. I was looking at bringing home between £8k and £9k gross every month, but i asked my employer to cap my pay @ £5k gross. Initially i did this so that i would have some money in a pot and could top up a bad months pay with previously held commission.

I have read that if i earn more they can request a % of this figure ( up to 50% ) , but they can also increase my monthly contribution. Last week , my IP requested all my payslips and bank statements. At present my pay slips do not show any difference between my income last year and my income now. However there is potentially a lump sum that I have to take before the end of the financial yr and in reality i should have been earning around 3k a month more for the last few months.

I am concerned that if i declare the lump sum , i will lose nearly all of it. However, my main concern is with my regular income. If i do start earning more and they increase my contribution, what happens if the market crashes and I don't have enough to pay the monthly figure. I have read that they have no problem asking for more, but are very unlikely to lower the monthly payment. If you subsequently miss a payment, they can file for bankruptcy. I understand that at present, the requested payments are being met easily, but i have had pay fluctuations of £25k / yr in the past and it seems impossible to explain this to them . I have no guaranteed bonus or commission. I could potentially pay another 40k to 50k towards the iva and be bankrupted because of 1 missed payment

I have been advised by 2 independent companies to look at Bankruptcy now, but the cons still seem to outweigh the pros. Does anyone have any thoughts on this or has anyone else filed for bankruptcy during an IVA ?

If so , did you experience any problems that were not explained to you??

If I could get some impartial advice or you could point me in the right direction , i'd be very grateful

pure_dead_dopey

Hi Glen

I'm just bumping this so that someone with more experience can help, I know what it is like to have the pressure of permanently achieving high commission, but please bear in mind that you must be very good to maintain this this long, so pat yourself on the back

Charco_2

First question is to sate my nosiness, who are the two companies recommending that you go bankrupt?

Your IVA sounds like a mess from start to finish - an IP that puts forward an IVA for £750 and then agrees it at twice that should be struck off or heavily fined! Who is your IP?

I don't understand why you were expected to save up a lump sum for the end of your IVA!

I DEFINITELY WOULDN'T BE CONSIDERING BANKRUPTCY. At your high income, even with out all the commissions, you'd be paying an IPO for three years anyway!

kaya

My Mrs has recently started to work for a major and well known iva company, i cant name names until she leaves which will be next week hopefully but the way they conduct there business is not only immoral but also illegal and downright disgusting, they regularly forge and tippex documents, lie to customers and also phone creditors up and lie pretending to be the client!!, this is all deemed acceptable behaviour by the company directors and managers and staff are activley encouraged to behave in this manor in order to sell the product or get the sack, needless to say my wife is looked at as an outsider as she refuses to partake in there illegal behaviour , they dont make money from you if you go bankrupt so they will do whatever is nessecary to sell you there product, i would definately be asking somebody else to look over your iva if it seems at all suspect, which it will be if this company had anything to do with it!

Charco_2

They will take your house regardless of if you have no equity,
who will?
you'll go in the paper;
What paper?
read the april 2009 ammendment to advertising,you employer will find out In some cases yes, but IPs didn't run up your unaffordable debts, they offer a way out
This is why IVA companies spend so much on adverttising. What you mean spend all that dough to say no an IVA is bad?
What? An IVA is only good if it suits your situation, if it doesn't then most IVA Companies will advise where you should go instead. Sometimes bankruptcy, sometimes a short-term stop gap in a DMP... NEVER a DMP life sentence!
Some IVAs are appropriate , however why does the Director of the CAB talk about 'Miss selling ' as does the independant and guardian on a regular basis.
There's practically no such thing as mis-selling, it's a new buzzword invented by crook companies who self appoint themselves a "Watchdogs" to patrol the industry - in actual fact they patrol the Insolvency Register looking to fool already poor debtors into paying them £XXXXs to "free them"
Actual mis-selling is rather rare. (It involves convincing people to go into an IVA for five years rather than simply going bankrupt - but in many cases people actually just prefer not to go bankrupt and that's ok too...)
Wake up wake up IVA is 5/6 year expensive bankruptcy.
It's not but i suppose it does have similarities.
It seems the only appropriate use is for houseowners in good equity. Who said that? Well Martin on this site under IVA info go see people. He also tells of the 'hugly profitable fees' . Beware beware
Well if Saint Martin says it then it must be true!

It's unbelievable how willfully mis-informed people are determined to be!

Gardening_Glen

Hi

- pure dead dopey, i appreciate your comments and those words, in what has been a tough year, they do give me a glimmer of light. I've only been on this website for 24 hrs but it makes a difference when you realise you're not alone and that others have been there and got through it. A week ago , i was ready to quit my job and had the attitude of 'what's the point' . Thank you for your support

-Charco, i'm still nervous about my position and i would prefer to keep my IP details confidential until i am more sure about my options and the route that i am going to take. I'm not sure what visibility this website has and from the info i've given, i'm sure they could work out who i am if i start slating their practices , whilst still under their control. I will say that i spoke to a company last week after receiving a flyer through the post. The company is called Crystal Clear Debt Solutions. I spoke to someone in depth about my position and he explained that a number of solutions should have been made available to myself ( or at least discussed with me ). He did explain options and said that he would recommend filing for bankruptcy. I spoke to another company ( around 6 months ago) who sent a flyer also and they also recommended bankruptcy, but i can't find their info and just cannot remember their name.

Kaya, thank you for your info. It's very disturbing to hear this type of info especially when I've trusted people with my financial decisions. Unfortunately, it's becoming more and more clear to me that , when it comes to money and finances, you can't really trust everything that you're told and that i wish i'd been given more options 12 months ago. I think my current plight is down to my own naivety and mistakes, but has clearly been enhanced by misleading or misselling of information given to me be highly trained ( or corrupt ) finance companies. I'm still trying to ascertain my exact thoughts for my IP I think it's clear that there is a huge grey area and that even my situation has immediately caused discussion between certain areas. I see most IVAs write off up to 90% of the debt. I owed £85k but my IVA will pay back £83k ( which i know includes IP costs ) and in 4 yrs time, i'll have a 100% mortgage still and no equity ( admittedly i will also have no debt ). It just seems like a hell of a lot of money to pay out to end up with 0 . Especially when most of my creditors have already received more than i originally borrowed from the 'interest' payments i was making for the last 5 yrs.

I have 2 further questions if anyone can give any info:

1. I am capping my income with my employer so that, when i have a good month , money is held back. This enables me to receive a steady income and cover my mortgage and IVA + all monthly outgoings when i have a bad month. I have around £10k credit with my employer now and want to carry this on for the entirety of the IVA ( if my employer will do this ). I know this sounds like a lot, but my commission can, and does, fluctuate by up to £5,000 from month to month . I may finish the IVA with nothing in the pot, i may have £100k. However, the £10k may disappear quickly and i may have a situation 6 months before the end of the IVA where i cannot pay the monthly payment. I am trying to cover my back , whilst hopefully establishing a pot of money that i can receive as a lump sum after the IVA completes. My wife and i have combined basic wages of £2600 net , my IVA and mortgage combined are more than this. I am just wanting to ensure i make 60 payments , but am hoping for some left over commission. Is what i am doing unreasonable ? Can i receive a large lump sum in the year after my IVA completes without any penalties ? Has anyone else ever done this before or something similar ? Under my contract, i am not legally entitled to any commission , it is discretionary from my employer

2. I have been in my job for 11 yrs and get a good loyalty bonus based on my previous 4 yrs profit. This yr this is around £780 a month and could get higher. I am pretty much guaranteed to continue receiving this , but if the market was to take a huge turn for the worse, it could be stopped. However, I have an option to freeze this completely. ie. i could stop receiving the payment. The bonus is not part of my contract and my employer could cease payments at any time . This could be due to a market crash or could be at my request. I could stop receiving this at any time for either reason. If i informed my IP that i had stopped receiving it, could my monthly IVA payment figure be reduced ?? The reason could be due to a bad financial year . However , the market could pick up immediately and i could choose not to receive the monthly bonus and instead accumulate a lump sum and receive it in 1 payment ..... say .... 4 years down the line. Again, is this unreasonable? Would the IP consider lowering the monthly payment ? And again can a lump sum figure posted after the completion of the IVA be received without penalty. [FONT=verdana, geneva, lucida, 'lucida grande', arial, helvetica, sans-serif]
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Charco_2

I understand Glen, I'll get onto the rest of your post shortly I hope but I do understand your retisence in revealing too much about your situation. Still think you'd be mad to go bankrupt - see out the last year or so of your IVA and then slap in a big complaint once you've gotten your completion certificate...

Even it comes to nothing, it's going to result in an awkward inspection for your IP and no-one would thank you for that!

***Sorry, for some reason I picked up that you only had a year to go in your IVA, not that you'd only done a year! That does change things HOWEVER,
DO NOT USE A COMPANY TO "DO YOUR BANKRUPTCY FOR YOU"...

I dont know the two companies you've named but there are a number of companies out there that make contact with people shortly after they enter an IVA (because your information is freely available on the Insolvency Register). These companies use official sounding names like IVA Watchdog and IVA Council but they are not appointed by anyone... they are private companies who view you as a quick easy buck and will make promises of "getting you freed from your IVA" and "helping you into a more suitable debt solution" They do not know about your situation, nor if you were mis-sold an IVA, nor if it is (or was) the best solution for you. What they do know is that you're in an IVA - and for a fee they will get you out of it and bankrupt you.

If you wish to leave you IVA and go bankrupt you DO NOT NEED TO PAY ANYONE A FEE -
1. Stop paying your IVA, it will fail
2. Go Bankrupt yourself for about £510 fees to the courts (plus then your Income Payments Order)***

Charco_2

Are you insane?

kaya

hi glen , was it a watford based company you got your iva from?

Jimbo06

There will usually be scrupulous and less than scrupulous companies in any business sector. Indeed, within an organisation there will be a mix of people with differing levels of scruples.

It is wrong to suggest that all companies that contact people in IVA's and offer advice should not be listened to.

The person in the IVA should weigh up what they have been told by their IVA company and balance it with what has been suggested by companies that contact them. A lot of official information is available on the internet, so it does not take much to sort fact from fiction.

It is true that anyone in an IVA can simply stop their payments, obtain a failure certificate and file for bankruptcy.

However, as well preparing documentation, part of the fee charged by these companies is to help communicate with creditors keeping them appraised of the situation, help prevent potential harassment and offer peace of mind.

Indeed if you are in the financial services, yes, filling in a bankruptcy petition is simple enough. If you're not in the financial services, then it may not be so simple.

It's also the case that you don't need an IVA company to negotiate a deal with your creditors. It's simple enough to call your creditors and strike a deal to freeze interest and make stage payments at x pence in the pound. You could save yourself thousands of pounds doing it yourself if you know how and have the wherewithal.

Most professionals can be circumvented by doing the work yourself e.g. conveyancing, decorating your home, servicing your car, selling your home. Who needs solicitors, decorations, car mechanics and estate agents when we can do it all ourselves. Simple answer is the professionals do their work repetitively and know the advantages, shortcuts and pitfalls.

What have the IVA companies got to fear from companies that offer bankruptcy advice?

Jimbo06

Can the moderator explain why my above post was deleted?