New IVA

nannymc

Hi I am in the very early setup stage of an IVA, I currently owe £17500 and my advisers have said that I can realistically afford a measly £101, what do you think the prospect of this being accepted is. I also have the problem of having a reasonable amount of equity in my property. I am in the horrible position due to a divorce 18 months ago, my ex was on a fantastic wage, plus my minimum wage, and I have struggled to cut my cloth accordingly. Having been used to just buying what I wanted without any consequences, well guess what the consequences have caught up with me. Scared stiff as I have never missed or been late with a payment having cut back on food to keep the payments on track, now the adviser has told me to stop all payments this just feels so wrong, I know I owe the money but I cannot survive much longer with the stress and sleepless nights oh and the lack of food

cheesedoffwithdebt

A brief calculation at my end shows your creditors, over a 60 month period, would get a dividend of 34p in the £ for your debts which I believe, but may be out of date on, is acceptable. What concerns me is why this hasn't been explained to you by these advisers. My understanding (I went into an IVA nearly 3 years ago) is that the initial period is 5 years, and then at the end of that if there is 85% or more equity in your property you will be asked to release some of that equity towards your debt.

However- if you do have alot of equity could you not just remortgage?

Without knowing all the figures, your age, and everything else of course it's impossible to validate whether thats a real option for you, but because an IVA scuppers your credit file then anything else is better if possible.

You do have to stop paying by the way and yes it does feel weird but the Insolvency Practitioner starts to send payments to your creditors.

You are right to put an end to the stress though- others I am sure will post on here -and I hope you start to feel better.

nannymc

Hi again, I am 48 and the remortgage route was my first port of call, but as I am on minimum wage there is no hope of that, I currently have 50% equity in my property and have 8 creditors to the value of £17-17.5k. I have no dependent children all having flown the next and building their own lives. I just want to get out of this mess so that I no longer feel a burden to them. They have been there for me and listen to my woes all the time, it would be nice to be able to tell them some good news for a change:(

Depth_Charge

nannymc wrote: »

Hi I am in the very early setup stage of an IVA, I currently owe £17500 and my advisers have said that I can realistically afford a measly £101, what do you think the prospect of this being accepted is. I also have the problem of having a reasonable amount of equity in my property. I am in the horrible position due to a divorce 18 months ago, my ex was on a fantastic wage, plus my minimum wage, and I have struggled to cut my cloth accordingly. Having been used to just buying what I wanted without any consequences, well guess what the consequences have caught up with me. Scared stiff as I have never missed or been late with a payment having cut back on food to keep the payments on track, now the adviser has told me to stop all payments this just feels so wrong, I know I owe the money but I cannot survive much longer with the stress and sleepless nights oh and the lack of food

Hi

More information would help

The IP company must think you have a chance of the proposals being accepted or they would not be putting them forward one would hope and this might happen and may work for you.

You need to make sure you understand and compare all your options, fees & implications etc

5/6 years in an IVA is a long time, things can and do happen during a period like this, make sure you have fully read and understand the IVA proposals especially where the house & equity are concerned.

Are your advisers charging any up front fees?

Could you put up your Statement of Affairs (SOA)?

How much equity do you have (your share in £s)?

Are there any ptoential PPI claims on your debts?

A second or third opinion might be worth thinking about, up to you though and your decisions at the end of the day.

Best wishes

nannymc

hi I have already started paying the £101 per month even though the IVA has not been agreed yet. I take home £923 per month and my expenses (all necessary, no frills) are £822. I have already checked and there are no PPI claims that I am eligible for. I have £65k equity in my property but am unable to remortgage because of my low salary. The house is in my name only. One of the perks of a divorce I suppose. Would rather have had the old man though

dorisday

seems a bit strange paying without it being accepted who have you gone with hope its not a fee paying one. x

nannymc

Immediate Financial, to be honest I was scared and panicked after making the first payment, but have since spoken to a couple of their clients who are more than happy with the way they have been dealt with, so not quite so worried now. How long does it normally take from your first contact with them to the IVA being put forward or agreed?

Depth_Charge

nannymc wrote: »

hi I have already started paying the £101 per month even though the IVA has not been agreed yet. I take home £923 per month and my expenses (all necessary, no frills) are £822. I have already checked and there are no PPI claims that I am eligible for. I have £65k equity in my property but am unable to remortgage because of my low salary. The house is in my name only. One of the perks of a divorce I suppose. Would rather have had the old man though

Hi

Are you sure this is an IVA we are talking about as it does not make much sense given the level of debt and taking into account the amount of equity you have stated?

Are you sure this is not a debt management plan or one those 'debt settlement schemes' where a type of full and final settlement is offered to creditors when there is sufficient amount of funds in the pot.

If you are already paying then you should have something in writing about the procedure and any fees.

You need to check things out by the sound of this in my opinion

nannymc

yes they say its definitely an IVA but have explained that i will have to try to release equity in the final year, however, they also understand that I have already tried to do this to pay the debts off in full but have been unable to do so.

This is when it gets scary, because you get mixed stories some saying it doesnt seem right and others saying that they have been in a similar situation. I just cannot wait until it is agreed and in writing, then at least I will be sure as I get differing opinions whichever website I go to

UpToMyNeckInIt

This is purely my opinion, speaking as an IVA customer:

Please consider the ramifications before entering an IVA (sounds like you are dealing with an upfront fee-charger, which isn't necessarily a deal-breaker, providing their fee is not too extortionate). Speak to a few providers to see if an IVA is the right option for you. Remember: It is a form of insolvency, which in turn puts all sorts of restrictions on everything from the ability to open a bank account, or even get a mobile phone on contract.

I only went down the IVA route as I had no real option after an unexpected change in financial circumstances.

Check out the forum at: www . iva . co . uk. Loads of really helpful info. On IVAs there as well.

By all means seek advice from the ‘charity’ organisations, but don’t be afraid to approach a private firm if they don't think you are eligible for an IVA.

Go to www . iva . com, and contact a couple of well-reviewed Insolvency Practitioners. Many don't charge you anything, and their fees would be paid out of your monthly IVA payment (and agreed by your creditors).

I have a cynical view of the so-called 'independent' charities (Stepchange, National Debtline etc…) - they are all sponsored/funded by the banks/credit companies, and I can't help feeling that was who’s interests they were looking out for when they advised me. They tried pushing me towards a debt management plan (would have taken 10 years to pay off my debt + loads of interest).

Saying all that, I am sure that some private firms will ‘over-sell’ IVA’s to people for whom it may not be the best solution.

The following link to Stepchange, gives a brief ‘iva pros & cons’ guide though which is a useful starting point:

http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Individualvoluntaryarrangement/IVAprosandcons.aspx

Below is a link to the Straightforward Consumer IVA protocol which the vast majority of new IVAs are compliant with, much of which will form the basis, word-for-word of you IVA agreement:

http://www.cleardebt.co.uk/media/303...20protocol.pdf

You will have to work out your income and expenditure. Whatever is left over is your IVA payment. Regarding what is deemed 'reasonable' expenditure: All IPs that I’ve come across make reference to the CCCS Budget Guidelines Report 2011. Download a copy here:

http://www.insolvency-practitioners....AL%20DRAFT.pdf

I believe these were effective from October 2011, and used in my IVA implemented in August 2012. They may therefore still be current.

It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc if so required.

If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. I have come across people who underestimate their expenditure and subsequently have difficulty. As for stopping creditor payments: best take the advice of your IP.

Equity release (if applicable): Bear in mind that, however unlikely it is currently likely to happen, most IVA's require homeowners to (subject to a property valuation in Month 54 of the IVA), attempt to release equity via remortgage / secured loan up to 85% LTV to increase creditor dividend up to 100p in the £. (Subject to the resulting payment being max. 50% of you current IVA payment for affordability reasons). For most, equity release is not possible, so your IVA goes on for a 6th Year instead (which usually works out a lot cheaper). But who knows what the economic climate will be like in 4-5 Years time?

Bank Accounts: If you still are in the pre-approval stage, and any of your debts are with your existing bank, you need to open a full current account with a non-creditor institution now! (less overdraft of course). Best not to reveal that you are considering an IVA though (no requirement to volunteer such information).

Important to do this before you are on the register, as you will then probably be limited to a handful of basic accounts.

Do not switch to HSBC/First Direct: when they find you on the insolvency register, (which they will), they will make you close your account.

Most IP's reckon on a 96-99% IVA-acceptance rate. After all they don't want to go to the time/effort in putting together an IVA proposal, unless they are reasonably certain of creditor approval (they don't get paid otherwise).

Glad I went the IVA route in the end - can now sleep at night, Hope you get back on track financially soon as well.

Just my opinion though.

nannymc

To be totally honest, I am not too bothered about the stigma attached to all of this, I just want to keep my home. Not being able to get further credit will be a bonus and will make me think more before I spend.

I have had a rough few years (11 to be precise) struggling to keep my marriage going which eventually failed, going through a nasty divorce only getting my absolute 18 months ago. My youngest daughter giving birth to my first grandson only to find out that he has severe heart problems and having to cope with trips to Great Ormond Street and Glenfield hospitals, people seem to forget that these things cost money too, fuel and accommodation for whilst these children have surgery and aftercare. My daughter has no partner therefore relies on me heavily and to be totally honest it is only her and my grandson that has kept me going and given me a purpose in life again.

I feel sorry for my creditors because it is not their fault that I have overspent, even though they have made it easy with all their 0% offers and letters of cheap loans, the interest does finally catch up with you, and you can only deny it for so long.

No as I say I just want to keep my home so I can help take care of my grandson to give my daughter a break, plus which my mortgage is less than half of what i would have to pay in rent x