IVA Advice Needed Please

walmergreen

Hi There
I am currently trying to help some friends who have got themselves into all sorts of trouble buying a house. The home was purchased with a deposit of £40,000, but the cost of the house was £225,000. During the period of the purchase they were badly let down by the Estate Agent who encouraged them towards a cheaper mortgage. The result was that due to administration problems, they lost that house, and then had to wait a further 18 weeks before they could purchase a similar house with the same deposit and mortgage. In the meantime, due to a number of reasons they ended up having to fund the complete 18 weeks accommodation and ended up taking out a few loans to cover this amount. Since then, their period of bad luck has continued but they are basically settled now but the backlog of debt continues to affect their financial stability. They recently decided to go the IVA way and ended up with a Government recommended organisation called ‘PayPlan’. Their loans were re-scheduled and all organisations that were owed money have accepted the PayPlan timetable for debts to be paid over a 7-year period. This seemed to bring a measure of calm to their lives, but HFC have indicated that they will not work with PayPlan and state that they are taking them to Court to ‘Secure the Loan’.
My questions are as follows:

1. As I was the person who recommended that they should try PayPlan rather than other more commercial organisations, I am interested in the outcome. I am aware that even though I am informed that I am being told everything…….that I may not actually be hearing the Truth, the Whole Truth and nothing but the Truth from my friends!
2. What is the point in HFC going to Court to secure the loan when there is no equity in the mortgage….and no doubt the lenders of the mortgage will have 1st Charge anyway?
3. If I was an unsecured lending organisation, would I not be concerned that HFC are trying to place a 2nd Charge which might disadvantage me….especially when I have gone along with the PayPlan re-scheduling of the debts.
4. If HFC can ignore PayPlan, what is the point of creating an organisation that can re-schedule debt to assist people who have got into difficulties…..sometimes through no fault of their own.
5. Why would the Court look favourably on HFC and grant a 2nd charge without the consent of my friends, and surely the mortgage lender would not be interested in this anyway?

Sorry for this lengthy missive, but I had left my friends in the hands of ‘Professionals’ who latest advice appears to be………….re-mortgage and pay off HFC, which of course might not be to the advantage of everyone else involved.
Any words of wisdom are gratefully received, and I do hasten to add that HFC have a legitimate claim, and that my friends are not angels…..and I may not be aware of the full facts
Cheers
Alex

chevalier

1. As I was the person who recommended that they should try PayPlan rather than other more commercial organisations, I am interested in the outcome. I am aware that even though I am informed that I am being told everything…….that I may not actually be hearing the Truth, the Whole Truth and nothing but the Truth from my friends! Does this matter? You have done your best to help, and if they aren't honest with you, then you can't do any more.
2. What is the point in HFC going to Court to secure the loan when there is no equity in the mortgage….and no doubt the lenders of the mortgage will have 1st Charge anyway? They are banking on the house price going up such that if your friends sell there would be equity in the house, and they would therefore have 2nd dibs on that equity after the mortgage company, but before your friends or other creditors. It also may be that this is a complete try on and that they will mysteriously cave in at the last minute. Payplan would know if this is the way HFC usually behave.
3. If I was an unsecured lending organisation, would I not be concerned that HFC are trying to place a 2nd Charge which might disadvantage me….especially when I have gone along with the PayPlan re-scheduling of the debts. How would the other creditors know? Under Data Protection Payplan can't tell them.
4. If HFC can ignore PayPlan, what is the point of creating an organisation that can re-schedule debt to assist people who have got into difficulties…..sometimes through no fault of their own. Most companies do work with Payplan or CCCS or both. But it is a voluntary arrangement. So HFC can not go a long with it if they like. But for many people, Payplan is a lifeline.
5. Why would the Court look favourably on HFC and grant a 2nd charge without the consent of my friends, and surely the mortgage lender would not be interested in this anyway?How it works usually with Payplan is that all creditors are paid pro rata depending on the amount owed. HFC by wanting the charge on the house, are trying to make themselves preferential creditors. I don't know this for sure, but the court may well take this into account, and tell HFC to go away and take the money that is being offered via Payplan to them.

But the best people for your friends to ask is of course Payplan.
chev

CLAPTON

With the greatest respect...and you are clearly trying to help your friends but they should be the people here asking the questions.

orpheus

Hi Walmergreen,

I really don't have much to add, as chevalier has really laid it out very well. I have been with Payplan for over two and a half years. They have saved my life and been fantastic. However, despite their best attempts, one of my creditors still decided that, because I owned a property, they would place a second charge on my property. This is quite commonplace, sadly.

You have done your best by your friends - steering them towards Payplan (or CCCS or their local CAB) was the best advice you could give.

Most creditors work with these agencies and welcome their involvement as they have open lines of communication which makes their lives easier and reduced their administrative burden.

However, some of the less 'mainstream/highstreet' lenders will still place a charge based on a speculative guess that the property will increase in value and they will get more of their debt repayed.