Should I go for an IVA

BAILEY47

I've recently enterered a DMP with with a company recommended on your site (not sure if I'm allowed to say who it is). I've been really happy with all their help and advice. However, they're now recommending that I go down the IVA route. My credit rating is already down the toilet so I'm thinking of taking their advice. However, part of the debt to be included in the IVA is an unsecured loan that I took out with my mortgage company when I first got my mortgage 5 years ago. I'm worried about how this will affect my mortgage with them. Can you advise please.

Many Thanks

samtoby

I do not know where you stand with unsecured loans but I believe that if you have a mortgage and go for an IVA a mortgage may not be included as long as there is not rediculous equity in it.

My ex has an IVA and still have his mortgage and his van finance as well as a mobile phone contract (the last two are so he can work). I believe nearer the end of the IVA they look into you remortgaging so you can pay off the debt that way.

That is his situation but I do not know about anyone elses I guess cases are judged on merit? Personal situation and circumstances. Good luck.

BAILEY47

Thanks "samtoby" that's really helpful.

FoggyBrain_2

Hi. All unsecured debt has to be included in the IVA. You allowances will include your mortgage repayment, so you will be able to keep that going. And, as long as you service the mortgage correctly there should be no problem. This situation often occurs with Nothern Rock Together mortgages!

thinkpositive1

I could be wrong in guessing it's a Northern Rock mortgage + loan arrangement?

If so I have one of those and went onto a DMP over 3 years ago. The advice I received (from one of the reputable charities) was to include the loan into the DMP as it was unsecured debt and should be treated the same as all my other unsecured debst (personal loan and credit cards debts).

Oh boy was that a mistake! All my creditors accepted the reduced monthly payments they would get as part of the DMP APART from one and that was Northern Rock for their loan.

The DMP charity dealing with me told me not to get worried as I was still paying them something and that I should continue paying them that sum in the DMP.

They (N Rock) continued not to agree to the reduced monthly amount they were getting and eventually took legal action to secure the loan on my house. They have a legal charge on my house and when I sell I will have to pay off that loan in full, whatever the balance is.

As a secured loan it then was taken "out of" my DMP and I made arrangements to pay it in full monthly seperately.

I only wish I hadn't been advised to include it within my DMP.

FoggyBrain_2

Hi thinkpositive, that's one big difference between a DMP and an IVA. In a DMP the creditors can do, basically, as they please, but in an IVA they are bound by the agreed terms and cannot change the rules halfway through.

thinkpositive1

Hi Foggy Brain...funnily enough I am in an IVA now (just over a year) and felt the 1st 2 years on a DMP were wasted time .

Could that loan (unsecured at the time) part of the mortgage + loan package have been put into the IVA agreement before it was secured on my house? I so I am even more annoyed about the DMP advice I had !!

FoggyBrain_2

Yes, thinkpositive, whilst it was unsecured it could (would) have been included in the IVA. Out of interest, is your IVA with the same company as the DMP was with?

thinkpositive1

Thanks Foggy Brain....what a pity I didn't arrange an IVA back in 2008 when I took out my DMP. To answer your question the DMP was sorted through a very well known charity and the IVA was through a highly recommended company so "no" they were 2 different agencies.

From recollection I think I was advised that an IVA would not be an appropriate solution for me at the time as some 30% of my unsecured debts related to that unsecured Northern Rock loan and the agency advising me believed that would get voted down by NRock if I tried to go straight to an IVA solution.

What's done is done but I don't think I was given the full pros / cons of DMP v IVA at the time.