Please help - IVA Approved but mortgage company applied for Court Order

Daisy4567

Hope this is the OK place to post this...

Cannot believe it!!

2 days after getting the IVA approved we have come home from work today to find a letter from Northern Rock saying that they have instructed their Solicitors to apply for a Court Order as we have arrears.

It says that the result could be they take the house.

What do we do? Just when we think we've got a more structured and affordable Finance Plan with the IVA to enable us to ensure we meet our mortgage payments, this happens.

Please help

kns_2

Was the arrears included if so contact your IP.
If Northern Rock want to take your house back let them and then go Bankrupt

Daisy4567

No the arrears weren't included as IVA's won't include mortgage arrears with these being secured.

If we end up losing the house we will have nowhere to go as we've already tried to find somewhere to rent and with our credit the won't touch us

kns_2

That's not good is there no way you can come to an arrangment with northern rock,
How much is the arrears ?
How much is your IVA a month?

Daisy4567

Arrears are currently £2356.64 from when we went through a terrible time of 3 consecutive redundancies and illness.

Mortgage Balance is £47,945.21

IVA is £222.00 per month

Charco_2

Hmmm, it's not good, but it's not insurmountable!

Speak to your IP obviously - that's always first advice!

If its going to court already, then you'll need to go to court to put yourcase forward.

NR don't want to take your house from you. It's just hassle for them and then they'll definitely lose money. In the current scenario they're going to get paid... This is simply a letter from their mortgage dept who haven't been in contact with their insolvency or bad debt dept!
If they take the house they'll sell it for a loss and try to reclaim the difference from you but by then it's unsecured and they've a reduced chance of getting paid!

You do need to sort this out but it's sortable!

You may need to take a payment break in the IVA to try to make up the difference (10months!!!!) OR reduce your monthly repayments (they're already quite low) until you've caught up... This is very likely going to result in an extension to your IVA by a year.

Good luck, be proactive and sort this out!

(if your IP had been more on the ball this would already have been dealt with - even tho it is secured debt! You would have originally proposed reduced repayments for x number of months rising to £222 after and then your IVA might not have needed to he extended. Regardless you can still sort it out now!)

Charco_2

Hmmm, it's not good, but it's not insurmountable!

Speak to your IP obviously - that's always first advice!

If its going to court already, then you'll need to go to court to put yourcase forward.

NR don't want to take your house from you. It's just hassle for them and then they'll definitely lose money. In the current scenario they're going to get paid... This is simply a letter from their mortgage dept who haven't been in contact with their insolvency or bad debt dept!
If they take the house they'll sell it for a loss and try to reclaim the difference from you but by then it's unsecured and they've a reduced chance of getting paid!

You do need to sort this out but it's sortable!

You may need to take a payment break in the IVA to try to make up the difference (10months!!!!) OR reduce your monthly repayments (they're already quite low) until you've caught up... This is very likely going to result in an extension to your IVA by a year.

Good luck, be proactive and sort this out!

(if your IP had been more on the ball this would already have been dealt with - even tho it is secured debt! You would have originally proposed reduced repayments for x number of months rising to £222 after and then your IVA might not have needed to he extended. Regardless you can still sort it out now!)

Daisy4567

Charco - I was so grateful to see your post! Thank you for taking the time reply.

I am gutted to learn that this should already have been sorted by Grant Thornton - they never even asked about the state of play really with the mortgage - other than when we met with their representative the first time (and they did write down then the state of play with the arrears on both the mortgage and the secured loan). We have been paying what we could when we could but now obviously there will be much more structure to the finances now the IVA is in place.

The irony is that Endeavour (secured loan) were the ones who were really putting the frighteners on and NR were fine and now it's stepped forward with NR to this stage - I am gutted!!

Charco_2

It really should have been dealt with already and arrangements made for the arrears within your current IVA... This is the most basic of conversations to have when considering an IVA, one of the first questions you should have been asked!

HOWEVER there are two options open to you now - well one and a half! (and you'll not like it - you'll probably want to try the half option but I would probably recommend the other option)

Your I&E as drafted is fundamentally flawed. The IVA is flawed!

First you're take a copy of your IVA to the courts and ask for a SUSPENDED POSSESSION ORDER instead of the Possession Order your secured creditors will be looking for. A possession order would allow your creditors to take possession of your home after 28days, a SUSPENDED possession order allows them to take possession of your home 28 days after you fail to comply with arrangements of the court. (So you'd be hoping the judge would force your creditors to compromise with you and the courts would arrange for you to repay the secured creditors at a rate you can afford over a reasonable timescale).

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do you understand the difference here?

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The half option is that you would reduce your monthly repayments in the IVA and attempt to repay the arrears.
The better option is that you petition for your own bankruptcy and use the full £222 per month to catch up on your arrears - there would be no way you'd end up with an Income Payments Order!

Depends on if there is any equity in your property however!

(I'm sorry if this wasn't the advice you wanted. Whatever you do decide though you'll need to discuss it with your IP)

reviewbyme

Have your mortgage lenders not just gone for the court order due to existing arrears. As said before your IVA should have taken into account your secured payments before calculating your disposable income for the IVA. As long as you can at least maintain your monthly payments going forward your lender would generally not look to enforce the order (possession). Try speaking to them to put an arrangement in place for the monthly repayment only.

Daisy4567

Thank you both for your reply.

Charco, I took your advice and contacted the IP this morning who advised that £40.00 per month has been factored into the IVA and The Northern Rock should know this. However, on contacting The Northern Rock they say they have nothing at all from Grant Thornton - who's telling the truth??

Now, the problem is this - we already had a sort of payment arrangement in place but due to illness we defaulted on this and now they are taking this action.

I have been on to them for an hour today and they will not budge nor will they stop court action, even though they know we are now in IVA and are in a position to pay monthly, regularly and with contribution to the arrears. I cannot believe that the IVA is sorted, Endeavour (secured loan) is sorted but now we have this with Northern Rock and they just will not budge.

However - what they did say (and is the point reviewbyme was making??) is that they wouldn't look to action the order unless we defaulted on a new payment arrangement BUT!! They will not put a payment arrangement in place until they go to court.

I am already on antidepressants from the Dr for depression and anxiety and this is just making me ten times worse.

Now - the other HUGE factor is this... I read over the weekend that they are meant to give 15 working days notice that they intend to pursue through the courts. They have not dine this!! The first we get is the letter saying they have already instructed their solicitor to apply to the courts. (This was only done on Thursday 20th - the same day as the Creditors Meeting!!! GRRRRRR!!!)

So, what next?