Possible IVA and so confused

breezeblock

The more I read the more confused I am!!! Through burying my head in the sand for the last year I have debts of 24000. Unfortunately 5 years ago I was asked to be guarantor on my dd's mortgage but we were advised at the time that I should be joint mortgagee with a 1% share in the property. For whatever reason we kept no paperwork concerning this and having telephoned the solicitor they say they have no record of this therefore we have 50% share, although my dd pays the mortgage.

Due to unemployment and relationship breakdown circa last July the above debt has acrued. Luckily I have been living with dd and paying a token amount for my living expenses. I need to sort myself out asap and it seems an IVA could be the way to go. I am now earning a modest amount self-employed and with my minimal living expenses which dd has agreed to for the term of the IVA I could afford to pay up to £200 a month.

With all the things I have read it seems like it could be a veritable minefield though.

1- how do I choose a reputable company? the one step change advise seems to be the worst one???

2 - is £200 pm an acceptable amount?

3 - how do I/can I ensure that I can pay and extra year not re-mortgage? (theres very little equity from 5 yrs ownership)

4 - Will I be persued after completion for all this PPI hassle I've read about? Don't even think I've ever had it?

My head is going round in circles and any advice would be gratefully received!!! Thank you

Edit to say my debt is 16800 as I had added one twice, and £150 is more like what I can afford to pay monthly.

UpToMyNeckInIt

Hi breezeblock,

Do your research before going for the IVA. Have a look at the 'debt Camel' website and compare your other options. Also worth a look at the 'Support and discussion' thread on this board.

to answer your questions:

1). Google 'insolvency practitioner reviews'. 4th result down, after the sponsored links, takes you to a very good review site;

2). Yes: £200 over 5 years against your debt will provide a very good return. But you may find that by the time you have properly reviewed your income/expenditure, with the assistance of a good IP, that you may be able to whittle this down a bit, and still provide something acceptable to creditors.

3). The area of 'equity release' is quite complex, and best you discuss your exact circumstances with 2-3 different IP's. Bottom line though is that it is currently extremely unlikely that you will qualify for any sort of remortgage or secured loan. The only cases I have come across where IVA customers have been caught out, are where there is say 50% equity, the customer is repaying something like £700-£900pcm towards their IVA, and they have had a dramatic increase in income over the course of the IVA. Furthermore, they all seem to be customers of 'DebtFree Direct'. So perhaps a firm to avoid.

Any resultant increase in remortgage/loan repayments are subject to ALL of the following applying: capped at 50% of your current IVA payment, subject to a max remortgage of 85%LTV, and having equity over £5,000. Additionally, the usual affordability criteria apply: eg: multiples of household income, and nothing going past state retirement age.

4). Your chosen IVA firm will want to explore the possibility of PPI recovery (you should of course attempt to recover any beforehand, if appicable). I'm gong through the process myself, despite never knowingly taken any out. They should start this shortly after your IVA is put in place, so that it is done and dusted long before completion.

Unfortunately, with the whole ruling regarding PPI recovery being a fairly recent development, inevitably those IVA customers in the latter stages of the IVA are having completion delayed by the recovery process. Saying that, some IVA firms are much better than others at concluding things than others - so I suggest avoiding Grant Thornton for example.

Take your time with whatever you decide. It took me 6-Months of careful research before I went for the IVA.

Good luck.

Custard_Pie

Your IP should be able to give you a break down between an IVA and bankruptcy. Creditors will be looking at a return on each £1 owed. Sit down and list everything you have to pay out in a month. Don't forget anything, like food, smoking, postage, etc, etc. Everything within reason can be listed. With an IVA you have more scope to add to the list, where as with bankruptcy it's limited. Do you have assets? If yes, then they can be scoped into an IVA, where as bankruptcy they are sold regardless. IVA is limited to 5? years. Bankruptcy lasts for longer (I believe). IVA is a better option in most cases I'd say, unless you literally have nothing to lose.

breezeblock

Thanks very much for all the advice. My position is more complicated due to being on my daughters mortgage, so bankruptcy isn't an option I'm afraid!!!

UpToMyNeckInIt

Are you sure about that Custard Pie? I'm no expert on BR, as I knew it was never an option for me, but I understood that BR is either done and dusted in one hit, with discharge after 12 Months, or over a 3-Year IPA. ...Both way shorter than a 5-6 Year IVA.

I think you are right regarding the more generous living allowances in an IVA, providing for stuff like Sky TV, mobile phone contract etc. which I believe are not allowed for in BR living expenses.

However, even if going BR leaves a relatively spartan lifestyle for the customer compared to the IVA, if they have no assets to start with, it is arguably an option that provides a faster track to a 'fresh start'.

breezeblock

I am still concerned about the equity release. As my daughter is joint mortgagee I am pretty sure she isn't going to agree to re mortgage or secured loan, so I presume this will stop me from doing an IVA?

UpToMyNeckInIt

breezeblock wrote: »

I am still concerned about the equity release. As my daughter is joint mortgagee I am pretty sure she isn't going to agree to re mortgage or secured loan, so I presume this will stop me from doing an IVA?

No it wont.

The other thing I forgot to mention is that only your half of the equity is at risk.

Besides, it is nonsensical for your daughter to disagree, because you otherwise (presumably) risk going BR instead, and the OR MAY require that you sell the house. (Although, as you only 'own' half of it, I am not entirely sure on that point).

If you can go BR, without risk to the house, that may provide a quicker solution. Have a chat both with the debt charity sector (Stepchange, CAB etc), as well as 2-3 private companies, and see what your options are.

Your alternative is to struggle on - which will not be possible for very long, or a 15-20 Year DMP, and that option really sucks.

althas

1st off, bravo for doing something about it. I know it is a hard thing to do. Been there and doing it. So well done

The following are my opinions from personal experience
1. Have a visit to iva.com. They have a wealth of reviews on insolvency practitioners and companies, all by the people in the know. The Clients (including me). That is how I found my IP and she, and her whole team, have been nothing but 100%. If you wish to know the name shoot me a p.m. and I will happily share that. Also they have a very active forum where a lot of the IP's participate to answer questions and help, even if you are not a client

My number 1 tip is get 3 or so names and numbers and call them all as a preliminary thing. Get a feel for the company. After all, if your proposal is accepted you will be dealing with these people for 5 or 6 years so you have to be comfortable with them

2. Most proposals will be looked at I would think. But do not get fixed on the £200 figure. You will be going through a full income and expenditure and there are certain allowances available for rent, housekeeping etc. and it may be deemed you can pay £175 for example. If you have a good IP they will make sure you have sufficient to live on (albeit with no luxuries) and will not struggle to eat, keep warm etc. But your £200 and level of debt are a similar ratio to mine (mine was bigger) and mine was accepted

3. There will be a clause written in to your proposal for this. Usually along the lines of raising a certain amount in year 5 and if this is not possible then the IVA will continue for another 12 months

4. The PPI is a hot topic at the moment. It is an asset in the IVA and if you are eligible for it, it normally is paid to your creditors in ADDITION to the IVA. Hopefully you can deal with this during the IVA so there should be no worries

My main piece of advice. be totally honest with your IP. Do not hide ANYTHING from them in relation to this. I know it is a scary prospect, facing up to this, but it happens to us all. I was petrified but my IP helped me through everything. Discussed the options available to make sure an IVA was suitable, and taken care of me during it. The light at the end of the tunnel may look a long way away, it is, be realistic 5 or 6 years BUT the light is there and it will reach you in no time at all. I know, mine is almost upon me