Have I been misold an IVA

Concerned75

Hi.
I've just joined this site.
My question is have I been misold an IVA? I owed the bank £8,000 in overdrafts and PPI insurances etc..due to poor health and unstable work in 2008. In 2009, I was seriously ill in hospital for 3 months, so my mortgage also fell into arrears. In 2010 I managed to find a job, although low paid, I was still very vulnerable with my long term illness, but was pestered and intimidated by my mortgage company via phone calls and debt letters to make greater payments or risk court proceedings. The mortgage company told me on one of the calls, that I should go into an IVA with Payplan. Payplan were very helpful in the first year and arranged everything, as I felt pressured this was my only option. The 2nd year, when my health had settled down, I rang National Debt Advice for some help/advice. They told me that £8,000 wouldnt qualify for an IVA and other debts have been added. As I had now found a job, I could have negotiated with the bank a payment each month and settled with them within 3 years. The court /IVA agreement was showing a total cost of £15,000 so the mortgage company had put my unsecured loan debt amount with the banks debts to create an IVA. Last year, I found out that the IVA payments I make each month are only going to the bank, as I pay my mortgage, unsecured loan part and the arrears directly to my mortgage company.
Sorry, for the long overview, but have I been misold this IVA? I am very concerned and now in year 4, where the IP letters and requests for additional payments every year are cold and very "bailiff" esque.
Thanks in advance.

foxy-stoat

An IVA has to include ALL your unsecured debt liablilties, do you know how much you owed and to who and which lenders are included when you signed up for the IVA?

You should be paying your IP, Payplan, the monthly payment, after the agreement ends you will be debt free. Your mortgage should always be paid to the lender as these are not included in your IVA.

Sounds like you would of been better off in a DRO, maybe this is what you are in, do you have the paperwork you signed?

Concerned75

I know who my creditors are and after speaking to my mortgage company today, my unsecured loan of the mortgage is in the IVA.
I agree with you on reflection now, I should have been in a DRO, but at the time, this option wasn't emphasised by my mortgage company. Only the IVA route, as it's a fastest and a higher monetary way of recovering debts and favours them in the end. At present, I'm trying to get a breakdown of who's paid what in the IVA. Can they withhold that information. Can they?

Concerned75

Sorry. I asked them who's paid what and they didn't give an answer. Can they withhold that information? T isn't an annual statement sent out, listing your payments, only a summary.

foxy-stoat

Concerned75 wrote: »

At present, I'm trying to get a breakdown of who's paid what in the IVA. Can they withhold that information. Can they?

I do not think this is relevant, you have to pay an affordable amount agreed with your IP and creditors at the start and reviewed every year into the IVA for a number of months. At the end all of the liablilities included in the IVA will be settled.

If you do not like the tone of the letters from your IP then complain, ask them why they want to increase your payments, may be because you are earning more this/last year. If you think you have been tricked into taking out the IVA by Payplan then contact your local CAB office for advice.

You are 4 years into the agreement, assuming you may have to release equity this year or continue for 6 years, you are over half way and you should be seeing a light at the end of the tunnel.

Depending on the numbers from your mortgage lender, you this may or may not have been the best move for you. What did your last annual mortgage statement say about your arrears?

fatbelly

It doesn't immediately strike me as missold, though we'd need the full details

You wouldn't qualify for a DRO as you are a homeowner, so the choice would probably have been between IVA and dmp, as bankruptcy or ignoring debts would have been risky options. If a dmp would have cleared the debt in under 6 years then maybe you have an argument.

sourcrates

Concerned75 wrote: »

I know who my creditors are and after speaking to my mortgage company today, my unsecured loan of the mortgage is in the IVA.
I agree with you on reflection now, I should have been in a DRO, but at the time, this option wasn't emphasised by my mortgage company.

Hi,

Your post has worried me for various reasons.

Firstly, you should not be taking debt advice from a mortgage company, payplan have had some dubious connections in the past whereby they have provided, shall we say "incentives" to creditors, to recommend IVA's, to people for whom they were not suitable.

Are you absolutely positive all your unsecured debts are included in the arrangement ?
Check your paperwork, you should have a bundle half an inch thick.

You are subject to an annual review, whereby if your budget shows you have spare money, they can up your payments to compensate, this is normal practice.

National_Debtline

Hi Concerned


As fatbelly says, DRO is an absolute non-starter as it's not available to homeowners, hence it not being suggested by your mortgage lender, Payplan or anyone else.


IVA mis-selling is generally very difficult to argue conclusively, as the paperwork tends to be drawn up using standard templates which will carry all the key facts you are supposed to be made aware of. You have nothing to lose by launching a complaint, but it can be trickier doing so several years after the events in question.


Re: asking for information - yes, in principle you can ask your IVA firm for copies of any relevant paperwork. However I'm not sure it'll help you a great deal to confirm what dividends have been paid out to your creditors - they have agreed to the IVA's terms and so they know what they can expect to recoup.


Dennis
@natdebtline

Concerned75

Thanks for all your replies. I must admit, I now know an IVA is something that you should get previous advice and look into carefully, but as my original message briefly mentioned, I was still getting over my flare up from my health condition. I should have said mentally. It was during this time that under all the stress of chasing payment letters from the banks/mortgage, I feel I was "leaned on" to go into this. (I should add the frustrated irony that I had PPI with both of them, which didn't get paid out for reasons known to them.
All my unsecured debt is in the IVA. However, as I am in full time work, couldn't I just ran a bigger payment each month to my mortgage to include the unsecured part, which was £15,000? the bank was £9,000 owing and just avoided an IVA altogether by dealing with my creditors direct?
There is no equity in my property that I know of, unless that's changed. The house was remortgaged, hence the £15,000 unsecured loan.
I have £500 left to pay on the arrears.
Is there nothing else I can do, but sweat it out until the end?
Thanks in advance.

National_Debtline

Hi again Concerned


If you can show that the parties involved were aware - or should have been aware - of any mental health difficulties you were suffering at the time you entered into the IVA, that may support any arguments of mis-selling.. If you are unhappy with your IVA supervisor, you should request details of their formal complaints procedure and take it from there. Complaining does not affect your statutory rights, but you should ensure that you maintain any payment obligations in the meantime.


Dennis
@natdebtline

Concerned75

Thanks for your advice Dennis. I was physically ill with an autoimmune disease, which spread to experiencing mental health issues such as stress, confusion; a bit complicated to explain as no medical profession expected it, let alone the mortgage company. I did mention my state of health on my court statement, but I don't think much notice was taken.
As for complaints about the IVA, every year they change my IP, so my complaint might probably fall on deaf ears, but I am keeping a note of their attitudes and housekeeping my IVA this year much more closely.