Could I do this?

sandalwood_2

Hello to all
I am currently trying to raise cash for a FF IVA by way of selling my property,this is the only asset we have
Between me and my partner we owe around £43k-have been in a DMP for a year,but the way things are going we will be in it until 2030!!
Anyway-I have approached an IVA company and they have said that I need to sell my property for a certain ammount to make the IVA viable,but I was thinking,instead of going through them,try and sell the property and then offer FF settlements instead of an IVA-if I go through the IVA company they will charge £4k-£5k if I do it myself that will be an extra £4k-£5k for the creditors
What are the chances of creditor accepting this?
It will hopefully be around 20p-40p in the pound,not a massive ammount,but more than they would get if they decide to make me bankrupt
hope the above makes sense and any input is greatly appreciated

thank you

Charco_2

CAVEAT! (beware!)

Two things here...
1. You CAN of course try to come to separate arangements with each of your creditors, however, some of your creditors may accept and other might not. It is also highly unlikely that you will be able to get them all to agree at the same rates and at the same time... I would doubt that you could get anywhere near the same deal that an IP would get on your behalf. Finally if an IP tries to get this deal for you then he will only require that 75% of the value of your debts agree to it and then the others will be bound to it... you on your own will need all your creditors to agree to it! (Your IP for a one off IVA would probably not be able to charge a fee of £4/5,000)

2. I doubt you would end up with a one off F&F IVA. If you can afford to pay into a DMP then you can probably afford to pay a monthly contribution into an IVA!

A quick calc and a guesstimate of your figures and I'm thinking you are going to try to release equity of about £15-20K?????? Yes/no??????

Think about your figures again.

In an IVA you would probably make monthly contributions and be expected to address any REALISABLE equity for your creditors.
So take the value of your home and multiply it by 0.85 - this is because you would only likely be able to get a remortgage for 85% Loan to Value of your property.
The subtract your outstanding mortgage... how much equity do you think you would be forced to release now? I would guess it's less than the £15-20k your thinking about in the post above!

£43,000 in a DMP, you may as well be throwing water into the ocean... how long til you are debt free by this method?
Certainly look into an IVA but accept that it's probably going to be a five year IVA, with no equity release - but probably a year extension to address a small amount of equity that it's simply not worth remortgaging or selling up for!

PS - I knew i recognised your name so i looked at one or two of your other posts.... sorry if my reply here is rather general speaking (i've made a few assuptions too). Anyway in response to a post you put on another thread, your friend or family member wouldn't HAVE to be included in your IVA if they aren't looking to be paid back (as in, if they don't consider it a debt then it's not i suppose!) If they know about your IVA though then why not include them? They'll get to vote in your favour - but will unfortunately be asked to stand aside when it comes to them being repaid...

sandalwood_2

CAVEAT! (beware!)

Two things here...
1. You CAN of course try to come to separate arangements with each of your creditors, however, some of your creditors may accept and other might not. It is also highly unlikely that you will be able to get them all to agree at the same rates and at the same time... I would doubt that you could get anywhere near the same deal that an IP would get on your behalf. Finally if an IP tries to get this deal for you then he will only require that 75% of the value of your debts agree to it and then the others will be bound to it... you on your own will need all your creditors to agree to it! (Your IP for a one off IVA would probably not be able to charge a fee of £4/5,000):This is what they have told me they will be charging-you think I should speak to another couple of IVA companys?

2. I doubt you would end up with a one off F&F IVA. If you can afford to pay into a DMP then you can probably afford to pay a monthly contribution into an IVA! -Should have explained further,my partner is due to go on mat leave in Jan,then will give up work all together as child care fees are too much-this is our second child,our first is just a year old so in around 6/7 months time we will be relying on my wage only and at the moment we are in a one bed flat so we need to get out asap
the IP did say that another option I have is to just hand the flat back to the mortgage providor and go bankrupt-I dont really want to do this as we can afford mortgage on this

A quick calc and a guesstimate of your figures and I'm thinking you are going to try to release equity of about £15-20K?????? Yes/no??????-thats what I am hoping,but the market at the moment is terrible

Think about your figures again.

In an IVA you would probably make monthly contributions and be expected to address any REALISABLE equity for your creditors.
So take the value of your home and multiply it by 0.85 - this is because you would only likely be able to get a remortgage for 85% Loan to Value of your property.
The subtract your outstanding mortgage... how much equity do you think you would be forced to release now? I would guess it's less than the £15-20k your thinking about in the post above!

£43,000 in a DMP, you may as well be throwing water into the ocean... how long til you are debt free by this method?
Certainly look into an IVA but accept that it's probably going to be a five year IVA, with no equity release - but probably a year extension to address a small amount of equity that it's simply not worth remortgaging or selling up for!-I wont be able to do this as as said above we will only be on my wages so I will fail on a 5 year IVA

PS - I knew i recognised your name so i looked at one or two of your other posts.... sorry if my reply here is rather general speaking (i've made a few assuptions too). Anyway in response to a post you put on another thread, your friend or family member wouldn't HAVE to be included in your IVA if they aren't looking to be paid back (as in, if they don't consider it a debt then it's not i suppose!) If they know about your IVA though then why not include them? They'll get to vote in your favour - but will unfortunately be asked to stand aside when it comes to them being repaid...

Charco_2

So you'd be looking to sell the flat and move into rented accommodation? I understand now and that does make sense!

Hopefully this would allow you to release the equity that is there and you could show that you do not have money available for ongoing monthly contributions (either in an IVA or on your own steam).

Which brings us neatly back to your original post...

Personally, I would use the IP (and not just because I work in insolvency). They'll deal with the hassle, put forward a more professional offer and your creditors can't bully them into making a better offer than you're giving to other creditors. Also, they'll only need 75% of your creditors to agree to it which will force the other 25% to accept it!

First thing then is to hope that you can get a decent sale price for your property at the moment.

I wouldn't worry too much about the fees, I still doubt that your IP would be able to get fees of £4/5k for a one off IVA but to a certain extent that's neither here nor there, your creditors will agree that with the IP if they accept the proposal (fees of under £3k would be more reasonable and more likely).

Who is the IP/Company you are talking to?

(sorry for the detour around my assumptions)

Charco_2

Just spoke to one of our experts here... even more expert than me!!! ha ha :rotfl:

He said you should look for an IP that would put forward the IVA in these terms:

You'll put your property up for sale and if it sells for a decent price in the open market before January then you'll bring in the proceeds MINUS REASONABLE RELOCATION COSTS! (for example you'll likely need to have a deposit to set aside for your new landlord)

If your property doesn't sell by January, then you'll place the property in an auction and your IVA will be settled for whatever receipts this can bring in... even if it's only pence in the £!


Remember your relocation costs - should've mentioned that to you before!
My colleague agreed that £4/5k would be your IP bogging his arm in but that doesn't matter, your creditors wont be shy about telling to take his arm out! (15% of realisations would be about right, £2,250 or so)

sandalwood_2

Charco wrote: »

Just spoke to one of our experts here... even more expert than me!!! ha ha :rotfl:

He said you should look for an IP that would put forward the IVA in these terms:

You'll put your property up for sale and if it sells for a decent price in the open market before January then you'll bring in the proceeds MINUS REASONABLE RELOCATION COSTS! (for example you'll likely need to have a deposit to set aside for your new landlord)

If your property doesn't sell by January, then you'll place the property in an auction and your IVA will be settled for whatever receipts this can bring in... even if it's only pence in the £!


Remember your relocation costs - should've mentioned that to you before!
My colleague agreed that £4/5k would be your IP bogging his arm in but that doesn't matter, your creditors wont be shy about telling to take his arm out! (15% of realisations would be about right, £2,250 or so)

I have just spoken to the IP and they have said that at the moment there isnt any point putting an IVA forward as there isnt a certain ammount we could get for the property,they have mentioned that bankruptcy may be the best option for us
with regards to the relocation costs,I have already had an offer of a gaurantor so wont need a big deposit
I just feel stuck,cant really see us being in a small one bed flat with 2 babys,but on the other hand I feel I may be clutching at straws and putting off the inevitable that may be bankruptcy....just really dont know what to do know,wanna do whats best for the family and maybe bankruptcy is the best option.....

Max_1066

Its so difficult trying to weigh up the various options and also trying to work out where the vested interests lie (especially IP's). My advice (from personal experience) is to take as much advice as possible from as many sources as possible.

I was on a DMP based upon advice from CCCS and it would have taken 11 years to pay off. In my opinion anyone recommending a DMP beyond 5 years should be forced to justify that advice. I realised after a year the DMP was a waste of time and that like you I was going to do a FF (with money from my brother) using exactly the same logic as you. If the creditors agreed a deal with me they'd save the IP fees.

Unfortunately as stated by Charco you need to get all the creditors to agree and at the same rate. Unfortunately the only legal way of doing this is via an IVA. I don't think IP's do very much for their fees however that's how the system works so there's little choice.

The forthcoming change of circumstances would be a good opportunity to revise your budget (downwards) and show you can only afford a reduced monthly payment or possibly a FF IVA.

I'd recommend getting some independent advice and going through the numbers very carefully. Good luck.

sandalwood_2

Max_1066 wrote: »

Its so difficult trying to weigh up the various options and also trying to work out where the vested interests lie (especially IP's). My advice (from personal experience) is to take as much advice as possible from as many sources as possible.

I was on a DMP based upon advice from CCCS and it would have taken 11 years to pay off. In my opinion anyone recommending a DMP beyond 5 years should be forced to justify that advice. I realised after a year the DMP was a waste of time and that like you I was going to do a FF (with money from my brother) using exactly the same logic as you. If the creditors agreed a deal with me they'd save the IP fees.

Unfortunately as stated by Charco you need to get all the creditors to agree and at the same rate. Unfortunately the only legal way of doing this is via an IVA. I don't think IP's do very much for their fees however that's how the system works so there's little choice.

The forthcoming change of circumstances would be a good opportunity to revise your budget (downwards) and show you can only afford a reduced monthly payment or possibly a FF IVA.

I'd recommend getting some independent advice and going through the numbers very carefully. Good luck.

I am thinking that now that all this IP is out for is to make as much cash off me as poss,and if it isnt worth there while they wont put forward the proposal,I am certain I will sell,it is just when-if a proposal is aggreed does that mean my creditors cant issue any action for around 12-18 months as that may be the time it takes to sell? All I am after is some breathing space..
I also got back in touch with Payplan last night as they have an IVA department,they seem like that they are after cash aswell as she kept saying that I will need to start a DPM again until my place is sold-I mean,I could do this myself,just work out the % of what I have spare and pay the creditors what I can afford-even though this will go down in december/Jan.
As said just want some breathing space until the place is sold,dont wanna go bankrupt,I am selling my only asset to pay them off so surely that makse more sense to wait then to issue further action which in turn they may end uo with nish!!

Can anyone on here point me in a direction of a good IP i can have a chat with-PM me if poss...

thank you

Charco_2

Max_1066 wrote: »

Its so difficult trying to weigh up the various options and also trying to work out where the vested interests lie (especially IP's). My advice (from personal experience) is to take as much advice as possible from as many sources as possible.

I was on a DMP based upon advice from CCCS and it would have taken 11 years to pay off. In my opinion anyone recommending a DMP beyond 5 years should be forced to justify that advice. I realised after a year the DMP was a waste of time and that like you I was going to do a FF (with money from my brother) using exactly the same logic as you. If the creditors agreed a deal with me they'd save the IP fees.

Unfortunately as stated by Charco you need to get all the creditors to agree and at the same rate. Unfortunately the only legal way of doing this is via an IVA. I don't think IP's do very much for their fees however that's how the system works so there's little choice.

The forthcoming change of circumstances would be a good opportunity to revise your budget (downwards) and show you can only afford a reduced monthly payment or possibly a FF IVA.

I'd recommend getting some independent advice and going through the numbers very carefully. Good luck.[/QUOTE]

I wouldn't doubt that a lot of companies - in any industry - have an eye on the bottom line (money)... but there are rules and regulations in place to stop square pegs being put in round holes! An IP may want your work but, vested interest or not, he cannot force you to fit criteria.

CCCS as you say above is another good example, do IPs have a vested interest in putting people in IVAs or do the CCCS have an interest in directing people AWAY from IVAs?

Also, you'd be surprised how much work and resources goes into drafting nominating and supervising an IVA... even the simpler ones!

FavDaughter1

Hi, i'm new to the boards and trying to absorb it all. does FF mean a final offer of settling the debts? if you get a IVA set up can you then make a final offer? my parents(both on a pension) have said they MIGHT be able to help (releasing some money that they've put aside for me to inherit when they pass away- that suggestion brought a whole load of tears,just thinking about them being gone. i'm also concerned that should they get ill they might have needed money they'd given to me to help themselves), but they couldn't help with the amount of money involved at the moment.

from what i've read a IVA would mean some of the debt is "written off",is that right?

if we can get a IVA, and like some of the posts i've read find it a struggle/fails would my parents beable to step in and pay it off at the total amount it would be if we paid monthly for 5/6 years?
also is 6 years the longest period of time you pay a IVA?
would we be forced to sell our home at the end of the IVA?
thankyou

Charco_2

if we can get a IVA, and like some of the posts i've read find it a struggle/fails would my parents beable to step in and pay it off at the total amount it would be if we paid monthly for 5/6 years?
If you entered an IVA and your circumstances changed you could inform your IP who would be able to try to vary your proposal to help you avoid failing it... this might mean reducing your monthly contributions, extending your IVA by 12 months or YES, a lump sum offer from a friend or family member.

also is 6 years the longest period of time you pay a IVA?
In common practice yes, in theory no. Your IP will propose a five year arrangement. If you're unlucky enough to have Northern Rock as a significant creditor they'll insist on six years.

would we be forced to sell our home at the end of the IVA?
No. Most IVAs have a clause to say that your WONT be forced to sell your home - that's one of the main benefits of this solution - however, you will have to address any EQUITY in your home. So if your home is worth significantly more than your outstanding mortgage you may have to remortgage, find a secured loan, ask a family member to help or extend your IVA by 12 months.
thankyou