54th month in iva

Skalfie

I got a phone call from the iva practitioners in the 56th month stating I had to pay another 12 months onto my iva. Are they in breach of their contract by not advising in the 54th month?

sourcrates

No, it will be in the proposal, it’s standard procedure to either remortgage or face another 12 months of payments in year 5.

Skalfie

sourcrates said:

No, it will be in the proposal, it’s standard procedure to either remortgage or face another 12 months of payments in year 5.

Thanks .I knew this could happen but because they contacted me late in the 56th month and not the 54th month as in the proposal is this not a breach of their contract. 

fatbelly

No it's not

Skalfie

Ok thank you 

ObservingAnnie

Hi, can I ask if you are a homeowner and if they had told you to try and remortgage to release equity to pay the balance or anything rather than extending by another 12 months? Also can I ask as you’ve gone through 5 years or so of your IVA, what happens at the yearly reviews? I’m just in the early states of applying for an IVA and so confused and worried. Thanks for any advice you can give.

sourcrates

ObservingAnnie said:

Hi, can I ask if you are a homeowner and if they had told you to try and remortgage to release equity to pay the balance or anything rather than extending by another 12 months? Also can I ask as you’ve gone through 5 years or so of your IVA, what happens at the yearly reviews? I’m just in the early states of applying for an IVA and so confused and worried. Thanks for any advice you can give.

Hi,
Standard IVA terms and conditions, if your a homeowner, in year 5 you must try and remortgage.
If that’s not possible, then 12 months more payments is again, standard.
Yearly review is just that, if your income goes up, so do your payments, if it doesn’t, then they don’t.
What are your circumstances ? would you like to give us more details ?

An IVA can be the right choice for some, but not always.

ObservingAnnie

@sourcrates thank you for responding. Certainly, my circumstances are I am a homeowner since Dec’2019. I purchased my property using HtB and therefore the government has a 20% stake in my property. I am in just over 32k worth of debts, no defaults or missed payments as yet but I have had a couple of repayment holidays because of Covid. I’ve approached Creditfix for some advice and they have suggested an IVA. I’ve received my proposal but haven’t signed it yet as I am really concerned about a couple of things.

In terms of homeownership, given that I’m so early into my mortgage, and that there is the HtB loan to go on top of my mortgage regards to ever selling or releasing equity etc, what are the chances of me having to (and being able to) remortgage after the first 5 years of the IVA? Is it likely I’ll have to pay another year instead of releasing equity to pay? Any advantages or disadvantages of this please? Really don’t want there to be any risk to my home!! 

In terms of the yearly review, I’m concerned because basically the ‘nominee’ (advisor?) I spoke with and gave all of my income and expenditure to, including sending two/three months worth of bank statements, has ‘jiggled’ with the figures slightly. He has made it seem that I’m paying more out each month on certain things in order to demonstrate that my income / expenditure only allows for a certain amount to go towards the IVA each month. Is this right? Can I get in trouble for this? What about when I come to my yearly review, is it likely my payments will shoot up if the ‘true’ figures come to light? I must stress I have not given any misinformation, as I say I’ve submitted bank statements and the nominee has arranged the SOA. 

Grateful for any advice or experiences shared. Thank you. 

sourcrates

Hmmm, Creditfix just sell IVA`s, so the advice you get will be greatly tainted by that, there are certain allowences in insolvency, and it could be you were not claiming the full allowence for everything, as you are entitled to do.

As a homeowner, you have very few options for dealing with problem debt, the re-mortgage issue is a concern, my suggestion to you, is not to deal with a company like Creditfix, instead go to Stepchange, who are the UK`s leading free advice debt charity.

Run your situation past them, if they come back with IVA, which they probebly will, then they can answer all your questions in a fair and impartial way, as they have nothing to sell you.

They have recomended companies for IVA`s so you know you won`t be led up the garden path, all IVA`s attract fee`s, but the insolvency practitioners stepchange use charge the least, and you know all will be legit.

RauHughes

Hmmm, creditfix aren't the best, as Sourcrates states they're only really interested in selling an IVA. They're also only interested in volume - you're unlikely to be given a great service over the term of your IVA as they only really care about volume and not dealing with trick issues which might arrise that don't fit with their business model. 

I disagree with Sourcrates assessment of StepChange however. Yes, they're a debt charity but they're funded by contributions from the credit industry. I know many clients I have sent to them have been given anything but impartial advice. Year to date for 2020 I've had 9 clients go to StepChange for a DRO only for them to be 'advised' a DMP or IVA would be more suitable. Miraculously, when they then approached Citizens Advice Bureau they were then successfully approved for a DRO. StepChange also have an in-house IVA provider - StepChange Voluntary Arrangements - who are not a charity and charge more in fees than most insolvency practices; £2,000 in nominees fees and 15% of contributions in Supervisors fees, plus disbursements. Most IPs have adopted a fixed fee structure now which has been agreed with the majority of creditors over s number of years. This structure means fees are proposed at £3,650 total with no additional.charges for disbursements. This normally works out less on all but the lowest disposable income cases. Ultimately, the IVA fees have little impact on you unless there is a chance you will pay back your debts in full.

Your income and expenditure statement is comprised two main parts - your fixed expense such as mortgage, council tax, utilities, insurances etc then your sundry items like clothing, food, entertainment etc. Sundry items work on guidelines set out each year. If you spend £50 a week on food, but they give you £80 don't threat at all - this is fine and won't cause you any issues even at review. Do not let them talk you into making up expenses tho - I've had clients who have told me Creditfix and their introducers have asked them to make up letters to say they pay childcare or other fictitious expenses to make their application 'fit'. This is a criminal offence and you could be fined or worse for making false declarations to creditors in your proposal. 

You need to speak to a good IP practice. I find a good indication is the consultation appointment you have. This call should be at least an hour, you shouldn't feel rushed or pressured and your advisor should encourage you to take our time in reaching a decision. I've worked in debt and insolvency for almost 20 years. I've had to walk out of jobs a week in because of questionable practices as I've worked for companies who place customers above profits and everything inbetween. TrustPilot is a good place to start, and your CAB will also be able to make good recommendations. If you have any general questions or queries post them on here and I'll try to help or drop me a PM. 

Good luck!

ObservingAnnie

@sourcrates and @RauHughes Thank you both so much for your detailed help and advice.