IVA Refused twice- :( Im at witts end now

Mummy2211

Hi All,

Im really starting to worry and panic loads now.

Fist off we are in debt of around £55k credit cards, 2 loans, and other bits Plus £3k behind on our mortgage.

We were advised by our mortgage company about Payplan so we went with them, sorted everything out, but the IVA got refused because, we have a Loan out with In-laws, and the creditors would not honer a payment to pay off this loan, So we submitted the IVA again, with a halfed payment to the In-laws and the other half to the IVA, but this has been refused again, and that they want all of the money into the IVA, and then start paying back the loan to the In-laws after the IVA has ended which is 7 years due to longer payment terms.

Heres the thing, My In-laws are fully retired and in the mid 70's they are paying this loan out of their pension, and have already had to pay half of it because we haven't had the funds to pay it, But now my father in law has become poorly what heart problems, so we can not cause anymore stress to them as it is. I have explained this to the IVA but they are adamant that they can not do anymore.

What do i do now!!

I do not want to go bankrupt as i do not want to risk the house, we have two children.
We can get anything out of the house because of having arrears on the property at the moment, and the credit file being very bad. The house is in my partners name, and so are all of the debts.

We haven't got this debt because we didn't keep a check on our spending, this had come about because a old employer changed pay grades and pay wasn't as it was when we go the loans out, and then we went self employed, which has done well, but the turn over for payments from contracts are 30-60 days so its not like we have a day of each month we get paid.

I suffer from panic attacks and if the door knocks while im at home, i get in a state and hide in my own house, i cant even bring myself to open the curtains for fear that they will know i am in. Its getting a joke now, and taking over my life It just feels like there is nowhere to turn and no help.

Where can i go from here? What more can i do to get things back on track again....

National_Debtline

Hi Mummy2211, welcome to MSE.

From what you have said you need to get your mortgage arrears under control before worry about the credit debts. Have you made an arrangement with this? If not, then try one of the free advice services for detailed advice about your options (such as capitalisation of the arrears, or switching to interest only temporarily to help clear the arrears quicker etc).


As far as the credit debts are concerned, you will have a few choices to deal with them and should try not to worry about people knocking the door. These debts would need a CCJ to use a bailiff. So unless you have a CCJ and you have defaulted on it, you shouldn't be at any risk of bailiffs at the door.


If an IVA is unsuitable at the moment then you can try informally negotiate with your debts - you may be able to get a free Debt Management Company to help you and take some of the pressure off. You can do this until you have cleared your mortgage arrears and family debt and then re-evaluate things. (You should be careful with IVA's if you have equity in your home. IVA's are a form of insolvency and can be quite strict regarding monthly payments. Failure to maintain the monthly payments can mean the IVA would fail and there is a risk of bankruptcy - this can put your home at risk).


Laura
@natdebtline

Mummy2211

Good evening,

Thank you for your reply.
In regards to our mortgage, they have been really good with helping us, and underdtanding. I have wrote to them today (I am not on the mortgage so wont talk to me on the phone and OH is working till late) we have agree to pay over the amount for the mortgage and to clear the areas, We are already on a interest only anyway, I have wrote to them to offer an extra £100 on top of our agreed overpayment so hopefully they will be ok with this.

We didn't see another way to clear these debts and would take us years to pay it all off, But after reading what you have said, Maybe i should stop any help now with Payplan and call the creditors myself and offer a payment with them direct.

I think there maybe 1 or 2 that have a CCJ im not sure i would need to double check again. Payplan have really dragged this out its been nearly a year since we actually started this whole IVA thing.

would the creditors give us a second chance at paying them direct? and agreeing a doable payment plan without really making us struggle?

Is there somthing that could possibly help us budget affordable amount to offer each creditor?
In two years, thats when the loan ends with the In laws so we will have an extra £300 to pay to each on..

All such a mess and stressful. We got everything we have because we could afford it, and have never been stupid and got things we could never afford to pay back, We ended up having to use our Credit cards to pay bills but that only lasted so long. I feel like we've really failed and i don't want our children to carry on seeing us so stressed about money.

crazy_cat_lady

There are other free organisations that could offer advice - try Stepchange or Christians Against Poverty. I did a dmp through Stepchange (but just because I was too stressed and busy to want to deal with my creditors myself), but you can definitely deal with your creditors yourself if you want to.
The simple fact is that with unsecured debts, they can't take what you don't have. Someone much more wise than me will be along sooner or later to help out, but definitely don't give up hope. And definitely don't feel like you've failed - all of us have been in some sort of financial bother - that's why we're on here. Be proud that you're doing something about it.
Oh, you can even go online and do a 'debt remedy' with Stepchange.
Have you completed a budget that you're ok with? Does it leave you much to pay your debts with?

sourcrates

Mummy2211 wrote: »

Heres the thing, My In-laws are fully retired and in the mid 70's they are paying this loan out of their pension, and have already had to pay half of it because we haven't had the funds to pay it,

Where can i go from here? What more can i do to get things back on track again....

Hi,

Ideally you should of anticipated this creditor responce to a family loan, payplan should of known the IVA would be refused because of this, they have had enough experiance.

There is one possible solution, re-adjust your budget proposals to cover as much of the family loan as possible.

For example, if you don't smoke, budget for a 40 a day habit, if you don't drink, become an alcoholic, etc etc.
Make your emergency fund contribution larger, food shop.

There are ways and means without been dishonest increase your budget all round to cover what you can of it.

Mummy2211

Hi Sourcrates,
I havent done a budget form just yet, we have givent everything to our IVA company who was dealing with out IVA, but they have emailed me today to say that they dont think they can see this IVA going forward anymore. So i have their form they have filled out on our behalf.

Where we have been self employed my partner has now gone back to full time employment, so it will be so much better for us to make payments on a certain day of the month, as a pose to now money comes in left right and centre being self employed.

I think what i will do is talk with someone who can advise me on how to go around talking to creditors and talk with them myself, The only problem i have is that 90% of the debt is actually in my partners name, so i will have to get a form from him to state that i am able to talk on his behalf.

I just want to get everything sorted asap so we can move on with our lives and stop worrying, and then hopefully my panic attacks will !!!!!! off and leave me to sleep more.

Thank you for the replies, tomorrow will be a new day to get things moving.

sourcrates

Mummy2211,

How old are your loans and credit card accounts, what year (roughly) did you open each one ?

You shouldn't worry too much about these debts, really, you should concentrate on paying your mortgage arrears first, that is an essential payment.

Worst case scenario is that your creditors take you to court, and you end up repaying the debts at an affordable rate set by the court !!

Just because a creditor threatens to take you to court dosent mean that's anything to fear, they won't make you pay more than you can afford, even if it's £1 each per month, in some ways it's good, as they can't force you to pay more than the figure the court sets, so really, it's a bit of a non threat.

People panic when court action is threatened, but it can also be of benefit to you, creditors realise this also, so don't always follow through on court action for precisely this reason.

fatbelly

I've had a few clients over the years who have opted to just keep paying the mortgage and give all the non-priority creditors £1 per month (no negotiation, just paid them £1). Some creditors have gone on to get a ccj and a charging order. The majority haven't.

It's not a great strategy but your mortgage arrears are priority so you need to sort them first, as others have said. Then reevaluate when that is back on track

Mummy2211

Thank you all for replies im starting to think that i can do this on my own now (without an IVA) The credit cards he's had for years as in probably about 2007 so 8 years, and the loans we got out in 2010 and 2011 or 12, they were only over 7 years, and the loan with the in ln-laws only has two years left. And one of the loans was to pay off a credit card and an car loan, but as we went into self employed we had to then use the credit card to pay bills and food etc, then payments each month were falling behind on everything.

I will sit down this morning and do a write out of everything and what we have coming in, as we now have a guarantee income ever month, and i have offered the Mortgage £600 and not £500 as we were paying (Our actually Mortgage is £350 a month).

Fingers crossed they are all helpful and willing to agree a suitable amount.

fatbelly

Bear in mind if they took court action for possession and you were able to show that you could pay the contractual amount plus something to the arrears, that 'something' only needs to be enough to clear the arrears by the end of the mortgage term in order for the judge to suspend the possession order (C&G v Norgan).

Your £250 per month offer clears the arrears in a year. They would almost certainly get a worse deal at court, so they would be stupid to refuse.

Mummy2211

To be honest our mortgage company have been ok so far with us, and have said before that they will always try and help us with getting the payments sorted. So hopefully after emailing them yesterday to state the guaranteed monthly income now, and a raise in offer they will be ok, They will more than likely say the same as before, that they will set this up for 3 months, and then do a SOA to check that this is still an affordable amount.

The IVA company have just said that One of the credit card company refused point blank to accept the offer from the IVA all together, Dose this mean they will be a night mare with myself to agree a payment plan with then personally?