Letter from DFD

22cuddles

Hi all, just after a little advice before I ring DFD.

I am almost at the end of my IVA (three payments left, wasn't able to remortgage so currently this is year 6). I've received a letter from DFD along with a variation proposal which basically implies that it should make ending and closing up the IVA more efficient, funds paid more quickly to creditors and possibility of a Completion Certificate being issued reasonably quicklyrather than held up by PPI claims. As I'm so close to the end I'm worried about whether I should sign or not especially as Equity In Finance have already informed me all PPI issues have been dealt with about six months ago. It's been a long hard slog and I'd rather not have it drag on any longer if i can avoid it.

Any ideas on what I should be asking DFD other than is signing likely to cause any significant delay to completion of the IVA?

Thanks in advance.

longtermplanner

what does the variation proposal say?

22cuddles

Sorry for the late reply.

The main points of the letter are:

Revised terms mean greater flexibility - distribution of funds to creditors and completion of administration tasks in a more streamlined way.

IP has more discretion affecting continuation or conclusion of the IVA without seeking instructions from creditors

Amendment to terms of the equity release are changed to ensure it is affordable and fair.

It says both myself and creditors must agree to the proposed amendments. The letter's dated December 2013 although it only arrived this week and from the way it's written I suspect it's been sent to several of their clients rather than just to me.

Find_The_Real

Hello 22cuddles

I am probably overly cynical but it wouldn't be the contents of the letter I would be interested in, it would be the EXACT wording of the proposal, would it be possible to outline those? What would concern me is the mention of the amendment to the terms of the equity release when you are already in year 6 and with just 3 payments to go.

If the PPI issues have already been dealt with then there should technically be no reason to delay the completion certificate as this has been generally what has been holding things up for most people.

Just my opinion though and I am sure there are others on here that can offer better advice, but I would make sure you fully understand the impact it may have on your IVA at this late stage before signing anything, as you are not obliged to agree to any amendments made to your IVA if you don't wish to.

longtermplanner

Like FindTheReal I am of a cynical nature. At this stage, so close to the finishing line, it would be very hard to convince me to agree to any changes.

22cuddles

Thank you for your thoughts. There are 21 points in the variation proposal so I won't list them all (some are quite basic such as what happens if the named IP leaves during the course of the IVA so unlikely to be relevant at this late stage)

1. IVA will be subject to terms and conditions of the Standard IVA protocol 2014.

2. If the debtor has complied with obligations then completion certificate can be issued subject to debtor completing requests for information and documentation relating any assets identified but not yet released (I've kept up to date with all my payments and am not aware of any assets that could be requested).

3. Debtor agrees to sign a Deed of Assignment and account to the supervisor the full proceeds of any PPI (as mentioned previously, EIF were dealing with PPI. I had a couple of letters from some of my creditors saying that PPI had been awarded and sent directly to the IP. I dug out the last correspondence from EIF which stated the final creditor had agreed to settle and there was some documents to sign to accepted the offer which I completed and sent back. That was August 2013 and I've heard nothing since so am assuming it's all settled).

It also covers funds being divided up between creditors when all the money is in the pot, if any creditor makes a late claim, money coming back to me if every creditor gets a return equivalent to 100p in the £ or if dividends remain uncashed 6 months after closure (I wouldn't expect either of the last two happen so am not worried about those).

There's no mention of equity release in the variation proposal at all.

In the introductory part there is the following:

Where appropriate a provision for income tax will be deducted from the proportion of interest included in the funds received from miss-sold PPI compensation payments or other claims. The supervisor is currently liaising with HMRC to ensure the payment of tax is treated appropriately for each client.

There was no mention of PPI in my initial proposal - is likely to be something to do with the 8% interest I've read about?

Thanks for reading if you've got this far. I do intend to ring DFD but just wanted a few opinions before I did so.

Anondebtadvisor

It seems to me that DFD are trying to incorporate the 2014 IVA protocol terms and conditions which means that you will be required to either remortgage up to 85% Loan to value or obtain a secured loan.

The secured loan is the addition in the 2014 protocol whereas under your current IVA there is no requirement to obtain a secured loan.

If I were in your position I would be weary of agreeing to this variation, it means that you will have done a 6 Year IVA then have to obtain a secured loan as well............ Very sneaky on behalf of DFD!!

Anondebtadvisor

"There's no mention of equity release in the variation proposal at all"

This is in the 2014 IVA protocol - don't be misled 22cuddles


9.1 Sixmonths prior to the expiry of the IVA (hereinafter referred to as the reviewdate), there should be an attempt to release the debtor’s net worth in theproperty. The review date would normallybe after month 54, unless the IVA has been extended for any reason. However,subject to 9.3 below, where the debtor is unable to obtain a remortgage, thesupervisor will have the discretion to consider accepting one of the followingalternative proposals:



· athird party sum equivalent to 85% of the value of the debtor’s interest in theproperty; or

· 12additional monthly contributions (with the aggregate sum paid to the supervisorbeing limited to 85% of the value of the debtor’s interest in the property).



9.2 Theamount of the net worth to be released will be based upon affordability fromincome and will leave the debtor with at least 15% of his/her net worth in theproperty. Remortgage includes othersecured lending such as a secured loan. Where it is appropriate to remortgagethe property, the specific limits will be:



· Remortgageswould be a maximum of 85% Loan To Value (LTV).

· The incremental cost of the remortgage, including cost ofany new repayment vehicle, will not exceed 50% of the monthly contribution atthe review date.

· Thenet worth released will not exceed 100p in the £ excluding statutory interest.

· Theremortgage term does not extend beyond the later of the debtor’s Stateretirement age or the existing mortgage term.

· Theamount of money introduced into the arrangement will be the mortgage proceedsless the costs of the remortgage, including any costs to redeem any existingmortgage and/or secured loan

22cuddles

Thanks for that, I was looking at the points in the typed sheet they'd sent out rather than the proposal booklet. My gut feeling is to reject the proposal since it's so close to completion (fingers crossed) anyway. I've paid over and above what I owed with the extra 12 months extension and before the PPI's been added in, although I appreciate the creditors won't get 100% of that due to DFD's fees etc so I really don't want to go on paying any more than I have to.

Thank you for your help. I'm off to work shortly and working all day tomorrow so unlikely to ring them before Monday so any other thought or opinions before then would be most welcome.

Anondebtadvisor

I wonder how many other people will agree to the variation terms incorporating the 2014 Protocol without realising what they are agreeing to?

Years of payments into a high interest secured loan after they have completed their IVAs................

Find_The_Real

It would appear DFD are sending this out as standard, even for those that have finished payments and are still waiting for the certificate.

http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=57819

If it were me, I would not be agreeing to a change to my IVA protocol for the 2014 one.

It is rather sneaky of them in my own personal opinion to try and sell it as for your benefit in the covering letter in the hope that their clients will assume because it is from their IVA company it is in their best interest to agree to the new terms, when in reality it probably isn't.