New to DMPs, PPI etc and helping family

DMP_Newbie

Hi All..

I have been reading the forum quite a bit over the last few days to try and find some answers / re-assurance that we are doing the right thing.. Now for some background. Apologies if its a bit random..

We are helping our parents out who are in a bit of a mess financially. They started a DMP with Payplan in 2008 to try and get things sorted, however they have just got used to paying the monthly amount with no view to the future. They are 60 & 59 yrs old so the final settlement date of 2032 isn't much help to them!

As we live overseas we would like them to join us, but they cannot do this until they are debt free, so we are trying to help get things in order and get paid off.

To date after 6 years they still owe 62,000gbp and pay 230gbp per month.

They have recently been awarded PPI payments that should total around 23,000gbp (done through stake a claim, yes yes if we had known we would have done it ourselves.) and the payments have been made directly to them, as it appears that all of their debt has been sold on, therefore I beleive that the PPI is theirs to keep and they don't have to declare it to anybody.

We are offering to loan them some money (amount to be decided) but could be as much as 10,000gbp

We have already spoken with payplan and they have suggested a full and final IVA, however we were worried that by volunteering that money was from a loan and PPI, that they would want the PPI back. I believe however as it was paid to them directly this isnt the case and even though it will be used to pay back debt, Payplan have no say?

38,000gbp was Lloyds but has now been sold to Aktiv
9,000gbp is with Provident
14,000gbp is with Wescot
1000gbp is with Moorcroft

We know for sure that the Lloyds loan was sold, but we do not know about the others (as we do not know the companies) If you have any information as to whether the last 3 are likely to be the original loan companies or may have purchased the debt, please let me know.

I have also read that we can find out how much the company paid for the debt, any links to a guide or information on this would be greatly received, as it will help to determine how much we are likely to offer.

After some extensive reading on here, I am wondering if the F&F IVA is the right way to go, and whether we should start approaching the creditors (or ask payplan to) to see if we can settle on some payment figures.

With the IVA i beleive this goes on their credit rating for 6 years, whereas any defaults they have now will be cleared shortly, and by offering a settlement figure without an IVA this will remain this way? Is this correct?

Do you have any more thoughts and advice?

Please do not hesitate in asking anything I have missed. Please remember this is new to us and we are just trying to get our parents a clean start just before they retire!

Thanks..

Steve

Tixy

Hi

I beleive that the PPI is theirs to keep and they don't have to declare it to anybody.

As the DMP is an informal agreement they are not obliged to tell anyone, however it will likely be part of the DMP terms & conditions with payplan that any changes to their circumstances are declared, or would come up at their monthly review anyway.

Can I ask do parents own a property?

I have also read that we can find out how much the company paid for the debt

That is incorrect advice. It is not possible to find out.

9,000gbp is with Provident
14,000gbp is with Wescot
1000gbp is with Moorcroft

westcot and moorcroft are debt collectors, they could be collecting on behalf of original creditors or could have purchased the debt.

Provident are lenders but also buy debts. So it could be either.

With the IVA i beleive this goes on their credit rating for 6 years, whereas any defaults they have now will be cleared shortly, and by offering a settlement figure without an IVA this will remain this way? Is this correct?

Correct assuming all accounts have defaults (which they should) then they would stay on file for 6years from the default date showing on their credit files.

If they are going to move abroad is their UK credit rating of any value to them?

I would definitely talk to payplan about the possibility of informal F&Fs as well as a F&F IVA.
Given parents ages, amount of time it will take to clear on current repayments and assuming no property then I would think there is a pretty reasonable chance of F&Fs being accepted for around 50% of the outstanding debt.

longtermplanner

A F&F IVA seems to be the perfect solution here. The huge advantage is that it binds all the creditors in, no-one can refuse if it is voted through.

Why do you care about their credit rating if they are going to move abroad? A F&F settlement will be marked as 'partially settled' on the credit records, but I suggest this is irrelevent.

Monkeyballs

£62k repaid at £230 pcm = 22.5 years.

£23k represents @ 36% of the debt give or take...

I'd be of the mind that taking all aspects of the repayment plan into consideration (including debtors age) creditors would accept F&F's of 35%ish, possibly less...

MB

DMP_Newbie

Tixy wrote: »

Hi



As the DMP is an informal agreement they are not obliged to tell anyone, however it will likely be part of the DMP terms & conditions with payplan that any changes to their circumstances are declared, or would come up at their monthly review anyway.

Can I ask do parents own a property?


That is incorrect advice. It is not possible to find out.


westcot and moorcroft are debt collectors, they could be collecting on behalf of original creditors or could have purchased the debt.

Provident are lenders but also buy debts. So it could be either.

Correct assuming all accounts have defaults (which they should) then they would stay on file for 6years from the default date showing on their credit files.

If they are going to move abroad is their UK credit rating of any value to them?

I would definitely talk to payplan about the possibility of informal F&Fs as well as a F&F IVA.
Given parents ages, amount of time it will take to clear on current repayments and assuming no property then I would think there is a pretty reasonable chance of F&Fs being accepted for around 50% of the outstanding debt.

Thanks Tixy - Yes they own (mortgaged) their own house. They have around 60k outstanding, house is worth probably 90,000gbp and they are paying around 850p/m mortgage.

Credit rating may be an issue for moving overseas, I'm just looking into this. I'm pretty sure bankruptcy effects things, not sure how bad rating does.

I guess the only way to find out if the debt has been bought is by asking payplan..

longtermplanner wrote: »

A F&F IVA seems to be the perfect solution here. The huge advantage is that it binds all the creditors in, no-one can refuse if it is voted through.

Why do you care about their credit rating if they are going to move abroad? A F&F settlement will be marked as 'partially settled' on the credit records, but I suggest this is irrelevent.

Thanks LTP, I see the advantage of the F&F IVA and thanks for highlighting it. My main issue was the use of PPI repayments to pay it off as we don't / didn't know if Payplan would try and grab it all back.

We have 'moved' the PPI out of their account now, just in case.

Monkeyballs wrote: »

£62k repaid at £230 pcm = 22.5 years.

£23k represents @ 36% of the debt give or take...

I'd be of the mind that taking all aspects of the repayment plan into consideration (including debtors age) creditors would accept F&F's of 35%ish, possibly less...

MB

Thanks MB do you mean informal F&F or F&F IVA at 35%? payplan seem to think its worth trying the F&F IVA at 20% or lower! (this is when we were discussing figures) but if we can stand a better chance of having our offer accepted all the better.

One other concern is that some of the companies like moorcroft and provident don't have a great reputation so may refuse anything offered. The % of creditors in agreement, is the % based on value of money owed to them or simply numbers of creditors (ie if they are owed 80% of the total debt and agree to the conditions, all other creditors have to follow suit in the case of a F&F IVA)

Regarding credit rating, how long does partially settled on the rating stay for? and does it run from the default date?

Thanks for your info guys, my replies will be a bit out of time with yours due to the time difference..

Steve

longtermplanner

Trying lower was my first thought - just using the PPI money, not the loan from you. However they are paying £230 a month so why would theri creditors settle for little, esepcially as there is equity in the house?

I think they need to talk to a couple of IPs about what level single payment IVA would be accepted. Emphasise that they are going to move abroad (state this as a fact) and that abroad they wouldn't be able to keep up current DMP.

DMP_Newbie

longtermplanner wrote: »

Trying lower was my first thought - just using the PPI money, not the loan from you. However they are paying £230 a month so why would theri creditors settle for little, esepcially as there is equity in the house?

I think they need to talk to a couple of IPs about what level single payment IVA would be accepted. Emphasise that they are going to move abroad (state this as a fact) and that abroad they wouldn't be able to keep up current DMP.

Thanks LTP

The main reason for settling for less or for the creditors not waiting is the imminent retirement, 2 1/2 years time for her and 6 years for him. Her health isn't the best so i'm not too convinced that she can carry on working much past her retirement age. Mortgage is going to be a struggle once she retires. We are relying on the house as a retirement fund as they have very little in the way of pension (they cashed some in to try and keep their head above water)

We don't mind lending the money if it gets them out of this.

Is an IVA classed as insolvency? If so this may effect emmigration, whereas a bad credit rating wont. We want to do things as best as possible without the possibility of damaging their chances of leaving the UK.

With regard to the F&F IVA, if we chose this route and got rid of the debt, got a completion certificate, and they then sold the house to move over here, are there any general terms that the creditors can follow up on the debt in the instance they come into a windfall such as the house sale / equity?

Apologies for the amount of questions, I just want to be sure that we are doing the right thing and that I understand it.

Thanks again

Steve

longtermplanner

DMP_Newbie wrote: »

Is an IVA classed as insolvency? If so this may effect emmigration, whereas a bad credit rating wont. We want to do things as best as possible without the possibility of damaging their chances of leaving the UK.

In UK terms it is. Whether this would abroad would depend on the regulations there.

With regard to the F&F IVA, if we chose this route and got rid of the debt, got a completion certificate, and they then sold the house to move over here, are there any general terms that the creditors can follow up on the debt in the instance they come into a windfall such as the house sale / equity?

No, there should be no come back after a completion certificate. Obviously you will want to check the IVA terms to ensure this is correct, but it absolutely shouldn't be a problem.

DMP_Newbie

Thank LTP

I'll have to do some investigation if it will be classed the same as bankruptcy.

As an update, we have asked PayPlan if they are able to do F&F settlements rather than an F&F IVA and they have refused saying a F&F IVA is the only option.

I think there may be some confusion of terms here tho, as they have mentioned Partial Settlements thought the normal settlements team, but saying they are likely to want in excess of 80% which seems unlikely when the majority of the debt (except provident) has been sold on and the final payment date is 2032.

We'll keep plugging away with Payplan and see how we get on.

Steve