Help IVA/DMP?

dipsy

Hi thanks for that

I am not really doing anything out of the ordinary and I haven't entered into the IVA yet or missed any payments

I have done my road tax

will get my key card done as I can't sell the car without it or if I keep the car and the card goes I am screwed

I also need to get some shopping but again no where I wouldn't normally shop or for anything I wouldn't normally buy

spoken to my folks who are mortified, mum coming to see me later at work,.... will try and show her the IVA info I have gathered.

Not a good day today, drank myself to oblivion last night, it can only get better yesterday was a dark day, sometimes I feel it would be better if you had a partner, someone to share the load :-(

UpToMyNeckInIt

Hi dipsy. I remember this stage vividly. (I was on a bottle of wine a night at one stage in an attempt to block out the stress). I too had never missed a payment, but I reached a stage where I literally had no more credit to fall back on (at one point, I could not even afford to replace our broken kettle until pay-day).

Eventually, I faced a choice: Feed the family or pay my creditors. I chose to feed the family. From that point I paid no more to my creditors, but made sure I got the IVA proposed sharpish.

In my opinion, you too should get the essentials sorted. If you can afford token payments after that - great (but you will still get hassled for the full payment, so personally I think why bother?).

You have a good IP working for you. Just get all the paperwork sent off quickly, to get everything up and running soon.

All the best.

Depth_Charge

dipsy wrote: »

ok here we go

I have 1478 and 193.05 coming in each month

I hav £961.63 s/o for gas/elec/mortgage/council tax /life insurance/car insurance/payment to partner for daughter £120

I have allowed as follows
car serv £30
Road tax £25
Fuel £130
food/toiltetries etc £200
Pet food £7
Hair dressing £10
Clothing £20
Emergency £10


Leaves £157.42

I owe approx 32k

would I be allowed to do an IVA?#

I have a car worth about 2k and there is no equity currently in my home.....

I have opened up a coop cash minder account yesterday I should get the account number tomorrow

currently I have no missed payments at all on any of my unsecured debt

any help would be most welcomed

Many thanks in advance

Hi

Just going on what you have put so far and looking at your figures -

You dont seem to have anything down for water or telephone.

Clothing & housekeeping are low compared to trigger figures.

Is your mortgage on a fixed term?

Also if you have any sort of emergency or house repairs you do not seem to have much in hand.

Payments to your partner look like a voluntary amount and not through the CSA, could this change in the future?

How much negative equity is in your home - have you had a recent accurate valuation, this could be important

Many IVAs fail leaving people back at square one or worse, there is talk of secured loans being offered if you cannot re-mortgage where equity is concerned, do you understand this?

Your home can be at risk if the IVA fails and there is equity as you can be made bankrupt.

Dont get rushed into an IVA make sure you FULLY understand the pros & cons of all your options and taking into account what you say Stepchange have advised.

Maybe give another genuine charity such as CAB or National Debtline a call if you have any doubts.

Remember IVA companies are profit making organisations and I have not heard one yet who say they are not better than others.

5 & 6 years is a long time and a lot of things can happen and they do, I deal with failed IVAs almost every week now (including two cases just yesterday) and could write a book (maybe I could call it IVA horror stories)

I have to admit to a wry smile at some of the suggestions made by another poster:)

Just a guide from me though, a little tongue in cheek even but no apologies and it has to be your choice at the end of the day

Genuine Best Wishes

dipsy

Hi sorry meant to say the water /etc etc i.e. all essential bills are included in my £961.

I wasn't aware of potentially being forced to take a secured loan against my property should I fail to remorgatge, I was told that should I be unable to then I would potentially be locked in for another year.

Also once I am in the IVA if I could borrow money from my parents, would I be able to offer them a full and final settlement and get out of the IVA early

so many questions, not sure I understand everything at all .....

I range from being upbeat and trying to take control to falling apart and crying like a baby.....

:-(

UpToMyNeckInIt

Glad to hear that you have thought through all your expenses (good of DC to highlight this though, as so many customers miss stuff off, and then struggle with their IVA from day one).

I too have heard of only ONE IVA firm attempting to make some customers take a secured loan in lieu of a remortgage - this has been extensively debated on another IVA forum. This gist was that some pre-protocol compliant IVAs required equity release, by forced sale if necessary, without the 85% LTV clause, so it should not be an issue now).

I also know of one customer who successfully disputed the secured loan offer with this company, and was granted a 12-Month extension to the IVA instead - in line with protocol-compliant IVA terms.

An argument in favour of the secured loan however was that, if you were granted a remortgage, the entire amount would be at a sub-prime rate, so in some cases - ie: where a customer HAS been offered a sub-prime remortgage, a sub-prime secured loan would work out cheaper (as only that element would be at a sub-prime rate).

Regardless, the monthly repayment is limited to half your IVA repayment, with any remaining IVA payments reduced accordingly (thus making it affordable).

However, this is only likely to be of concern if you have significant equity come Month 54, and let's face it, most solvent people cannot get a 85% mortgage at the moment, so you stand no chance if you are insolvent. BUT who knows what the economy will be like in 4 Years.

Clarify these points with your IP if in doubt though.

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).

Do a bit of research. In the rare instances that 'Stepchange' recommend IVA's, they outsource most of them to 'Grant Thornton' (a widely complained-about firm - mostly surrounding delays in the completion process). Sadly, even the CAB cannot claim impartiality. They too have a close working arrangement with GT (just google 'CAB Grant Thornton' and you will see that they are virtually in each others pocket, as far as IVA referrals are concerned).

I accept the point that IVA AND DMP companies (including the charities, who accept 'donations' of around 11% from the creditors) charge fees, but this makes not a jot of difference to your IVA payment. It becomes relevant in F&F offer situations though I guess.

Finally, if you have decided upon the IVA route, might be worth checking iva.com for some customer reviews of the various companies out there (ClearDebt seem well regarded though).

Depth_Charge

UpToMyNeckInIt wrote: »

Glad to hear that you have thought through all your expenses (good of DC to highlight this though, as so many customers miss stuff off, and then struggle with their IVA from day one).

I too have heard of only ONE IVA firm attempting to make some customers take a secured loan in lieu of a remortgage - this has been extensively debated on another IVA forum. This gist was that some pre-protocol compliant IVAs required equity release, by forced sale if necessary, without the 85% LTV clause, so it should not be an issue now).

I also know of one customer who successfully disputed the secured loan offer with this company, and was granted a 12-Month extension to the IVA instead - in line with protocol-compliant IVA terms.

An argument in favour of the secured loan however was that, if you were granted a remortgage, the entire amount would be at a sub-prime rate, so in some cases - ie: where a customer HAS been offered a sub-prime remortgage, a sub-prime secured loan would work out cheaper (as only that element would be at a sub-prime rate).

Regardless, the monthly repayment is limited to half your IVA repayment, with any remaining IVA payments reduced accordingly (thus making it affordable).

However, this is only likely to be of concern if you have significant equity come Month 54, and let's face it, most solvent people cannot get a 85% mortgage at the moment, so you stand no chance if you are insolvent. BUT who knows what the economy will be like in 4 Years.

Clarify these points with your IP if in doubt though.

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).

Do a bit of research. In the rare instances that 'Stepchange' recommend IVA's, they outsource most of them to 'Grant Thornton' (a widely complained-about firm - mostly surrounding delays in the completion process). Sadly, even the CAB cannot claim impartiality. They too have a close working arrangement with GT (just google 'CAB Grant Thornton' and you will see that they are virtually in each others pocket, as far as IVA referrals are concerned).

I accept the point that IVA AND DMP companies (including the charities, who accept 'donations' of around 11% from the creditors) charge fees, but this makes not a jot of difference to your IVA payment. It becomes relevant in F&F offer situations though I guess.

Finally, if you have decided upon the IVA route, might be worth checking iva.com for some customer reviews of the various companies out there (ClearDebt seem well regarded though).

Hi

Thanks for the compliment (it was one wasnt it?

Interesting comments on the secured loans, are you definitely saying that they will never be offered on any existing or new IVAs?

I presume that you have heard of The Shawbrook Bank / The Select Partnership 'IVA' secured loan 'product' so to speak?

You make some good points on the charities but as I think you are aware not all CAB branches are in their pockets as you put it.

If an IVA is the appropriate solution then I would always say speak to a number of IVA providers and compare, preferably those that do not charge up front fees and this would include a number of IPs on the other forum you mention.

Of course there is no such thing as a free IVA whoever you go with.

Creditors do not pay the IVA fees the person or people in the IVA do, thats a fact, just ask some of the thousands of IVAers whos arrangements have failed (I spoke to one today)

Full advice on all options and possible implications, affordability and sustainability of any arrangement short and long term is the key.

The bottom line is that the solution is the right one at the outset for the person in debt and in their best interests. I am afraid to say that some of the people I see this has not been the case in my opinion and cost them too.

Interesting here in this case though is that I believe that Stepchange have suggested bankruptcy so a theory or two might have gone out the window with that one.

Its just my take again

dancingfairy

Hi. I'm just wondering why you have gone for an IVA over bankruptcy? An IVA will last for 4/5/6 years and it's not like you have any equity in your house to protect. Also you are pretty much committed to paying the payment for the 4/5 years otherwise your IVA will fail.
Is there something in your work contract about IVAs/Bankruptcy at all?
Why not read up about bankruptcy and what actually happens to houses as opposed to just panicing and being convinced your house will be taken off you? My understanding is that if there is little or no equity (and unlikely to be so) then the OR will hand back the interst in the property to you and if there is a small amount of equity then you can make them an offer. It's only if there is likely to be a significant amount of equity in your house that the OR will be interested in the house.

Why not ask on the bankruptcy board?
I honestly can't see why you don't just go bankrupt and get it all done and dusted. You may have to make 3 years payments as a sort of contribution to some of the costs though but this is nowhere near as much as 4/5/6 years of IVA payments (and bankruptcy can't fail in thesame way if your circumstances change and you can'tafford to maintain payments).
df

Depth_Charge

dancingfairy wrote: »

Hi. I'm just wondering why you have gone for an IVA over bankruptcy? An IVA will last for 4/5/6 years and it's not like you have any equity in your house to protect. Also you are pretty much committed to paying the payment for the 4/5 years otherwise your IVA will fail.
Is there something in your work contract about IVAs/Bankruptcy at all?
Why not read up about bankruptcy and what actually happens to houses as opposed to just panicing and being convinced your house will be taken off you? My understanding is that if there is little or no equity (and unlikely to be so) then the OR will hand back the interst in the property to you and if there is a small amount of equity then you can make them an offer. It's only if there is likely to be a significant amount of equity in your house that the OR will be interested in the house.
Why not ask on the bankruptcy board?
df

Hi

Fair points really

Info on bankruptcy & the home here

http://www.bis.gov.uk/insolvency/personal-insolvency/bankrupts-home

UpToMyNeckInIt

...A lot for the OP to think about.

Lots of differing opinions, but all very valid points.

As dancingfairy suggests, BR was originally recommended. If the house is in a lot of neg. equity, and providing there are no employment restrictions, then it seems a good solution.

However, your house is your home (and I love my home!). Merely considering equity is too simplistic. You have to weigh up the life costs of selling up and renting vs paying a mortgage.

In my opinion, even if there is little or no equity currently, property is a good long-term investment and worth protecting. An IVA allows you to do that. BR does not necessarily - especially if the house market improves in the next 3 Years (and personally, I think that is realistic). If that's the case, I assume the Official Receiver could then require the sale of the property.

Whilst I cannot say if any IVA company will try pushing a secured loan on other IVA customers or not, my view is that the wording of most modern IVA's, is that they require attempted equity release 'by way of remortgage'. They mention nothing of secured loans. Hence, I would tell my IVA company where to go if they tried it on.

Frankly though in my case, (and as unlikely as it is to happen): A secured loan/remortgage (subject to affordability criteria), is preferable to losing my home and then renting (probably for the rest of my life), and forking out twice what my current mortgage repayment is for a comparable property each month.

Everyone's circumstances are different though - I accept that.

yat360

dipsy wrote: »

Hi thanks everyone you are being most helpful

right here is what I have done so far

opened new account

transfered all my d/d to new account less the ones for the cards and loan

I haven't cancelled them off my old account yet, they aren't due out till May as I have everything come out in first week of the month.

My salary is too late to put into new account so when it goes in on Wednesday I will transfer it all out into new account to cover the d/d

then I will cancel all the d/d inc the card/loan ones, I just didn't want natwest to think something odd going on as all the d/d were cancelled if you get my drift

I will then ring each of the companies c/cards and loan etc and explain to them the situation - yes no?

The I will apply for the IVA - I have been in touch with IVA company and they say I should be ok..

anything I have missed/should be doing/shouldn't be doing?

I also need to have a repair done on my car, would I be foolish to put this on my card as it stands no one knows anything as of yet and all payments are up to date?

many thanks again for all your help with this

ps just spoken to a friend who has scared the life out of me, she tells me I will loose my house on an IVA

I thought you kept your house but were expected, should there be any, to release the equity in say month 54(ish) of the arrangement.... can anyone advise

Many thanks

We handed the keys to our home back to the mortgage provider as we went into our IVA. God it was hard decision...but sadly we had huge secured debt against it. You know, you soon learn that a home is made with a family and not necessarily a house that has a mortgage attached to it.