We are being made Bankrupt by our IVA providers!!!

Banco44

Hi there, was wondering if someone could give us some advice.
Me and my wife entered into an IVA with Debt Free Direct (DFD) in March 04 where we agreed to pay £499 per month, which at the time was affordable as we were both in full time employment and had no children.

Within the first year my OH got pregnant and we advised DFD, whilst on maternity leave they allowed us to reduce the payment to £360 per month.

After having the baby my wife went back to work but only on a part time basis 16 hours per week, we advised DFD that our income had vastly reduced along with the added expenditure of having a child, they advised us over the phone to pay only what we could afford and after completing an income and expenditure form this was only £70 per month.

18 months later we had another child again we advised DFD and continued to pay £70 per month.

During this period we have on at least three occasions requested a variation to the original proposal, but this seems to have fallen on deaf incompetant ears at DFD.

we have also tried 3 times during that last 4 years to remortgage to make an early settlement of the iva and each time we have been told that there was not enough equity to cover what they want.

In 2006 we received a certificate of non compliance, we immediatly spoke to and wrote a lenghy letter to DFD re explaining our circumstances, after not hearing from them we called them to see if they received the letter, they tild us they had and to ignore the certificate of non compliance.

In January/February this year we received a letter from DFD as we do each time at this time of year to review our income and expenditure, we completed this and found we could up the payment to £131 per month, After making 2 payments of this new amount we received a petition for our bankruptcy with the hearing being on the 9th May.

My questions are:

1. Does anyone know who DFD's governing body are? as we wish to lodge a complaint against them.

2. Does this sound like DFD has been incompentant and not lived upto there side of the deal?

3. What is involved in the process of us being made bankrupt?

4. We know we are likely to loose the house, CAB advised us to stop paying the mortgage, is this ok?

5. Can we leave our house to privately rent before the OR gives us notice to leave.

Sorry for the length of this posting but is has been a long and difficult time and i'm hoping someone can help us. I now wish i'd gone bankrupt 4 years ago and so would have saved paying those incompetent idiots any money at all, out of all we have paid to them nearly £11000 seems to have gone in there fees and administration of the IVA!!!!

Zebedee69

It sounds like while your IVA is going reasonably good there is some process going on in the background. Perhaps an admin guy pressed the wrong button I dunno..... Sounds like although your doing okay some automated process is in the background.

You need to get in touch with them straight away to find out whats going on. Making you BR achieves nothing as far as they are concerned as they wont get a penny from you.

Banco44

Zebedee69 wrote: »

It sounds like while your IVA is going reasonably good there is some process going on in the background. Perhaps an admin guy pressed the wrong button I dunno..... Sounds like although your doing okay some automated process is in the background.

You need to get in touch with them straight away to find out whats going on. Making you BR achieves nothing as far as they are concerned as they wont get a penny from you.

I have called them several times, and we even submitted a new offer of £350 per month, (i forgot to add this on the original post) not sure how we were going to afford this though, but they just came back to us and said we either Sell the house ourselves and continue to pay them for a further 12 months or we go bankrupt, what a choice !!!!!!

fermi

IVA's are not quite my thing, but I must admit that I'm surprised that DFD are petitioning the bankruptcy. They normally try to wiggle out of doing it, or more importantly for them paying for it.:rolleyes:

Banco44 wrote: »

1. Does anyone know who DFD's governing body are? as we wish to lodge a complaint against them.

May be of some help: How to make a complaint against an insolvency practitioner

Banco44 wrote: »

2. Does this sound like DFD has been incompentant and not lived upto there side of the deal?

DFD have certainly been incompetent. However, I'm a little surprised that they didn't completely fail the IVA earlier if you were only paying £70 per month.

Banco44 wrote: »

3. What is involved in the process of us being made bankrupt?

That is not a simple one to answer. If you need to start doing some reading, then this is a good place to start:

Link: Insolvency Service Publications & Factsheets.

Banco44 wrote: »

4. We know we are likely to loose the house, CAB advised us to stop paying the mortgage, is this ok?

We would need to know a lot more about your situation to be able to comment on that. To start we would need to know how much equity there is in the property and whether you could afford the mortgage payments if you did not have to make payments on your other debts.

Sorry that is not a lot of help, but if you need to discuss the BR side of this then there is the Bankruptcy & Living With It board here on MSE.

Banco44

fermi wrote: »

IVA's are not quite my thing, but I must admit that I'm surprised that DFD are petitioning the bankruptcy. They normally try to wiggle out of doing it, or more importantly for them paying for it.:rolleyes:



May be of some help: How to make a complaint against an insolvency practitioner



DFD have certainly been incompetent. However, I'm a little surprised that they didn't completely fail the IVA earlier if you were only paying £70 per month.



That is not a simple one to answer. If you need to start doing some reading, then this is a good place to start:

Link: Insolvency Service Publications & Factsheets.



We would need to know a lot more about your situation to be able to comment on that. To start we would need to know how much equity there is in the property and whether you could afford the mortgage payments if you did not have to make payments on your other debts.

Sorry that is not a lot of help, but if you need to discuss the BR side of this then there is the Bankruptcy & Living With It board here on MSE.

Hi there thanks, there is about £15000 - £20000 equity in the house i beleive according to the last time we tried to remortgage.

fermi

Banco44 wrote: »

Hi there thanks, there is about £15000 - £20000 equity in the house i beleive according to the last time we tried to remortgage.

Even in bankruptcy it is possible to prevent the house being sold to release the equity if you can find someone who is willing to purchase the bankrupt's share of the equity (or "beneficial interest") from the OR/trustee.

But you would have to consider if that is possible, and how this compares to your overall debts in the IVA. No point raising that to buy the equity in BR if it could allow you to complete the IVA. But if you have to go BR anyway then maybe.

I must admit that you are in a difficult spot here.

I presume that if your CAB advisor advised you to stop paying the mortgage, then it was their opinion that you should accept the BR and losing the house? If you are going to be struggling to meet the IVA payments even if it could be rescued, then perhaps that is your best option. But only you can judge that.

Have you talked to any of the other free/impartial advice agencies that are in my signature?

Banco44

fermi wrote: »

Even in bankruptcy it is possible to prevent the house being sold to release the equity if you can find someone who is willing to purchase the bankrupt's share of the equity (or "beneficial interest") from the OR/trustee.

But you would have to consider if that is possible, and how this compares to your overall debts in the IVA. No point raising that to buy the equity in BR if it could allow you to complete the IVA. But if you have to go BR anyway then maybe.

I must admit that you are in a difficult spot here.

I presume that if your CAB advisor advised you to stop paying the mortgage, then it was their opinion that you should accept the BR and losing the house? If you are going to be struggling to meet the IVA payments even if it could be rescued, then perhaps that is your best option. But only you can judge that.

Have you talked to any of the other free/impartial advice agencies that are in my signature?

Hi, no we have not spoke to anyone other than CAB and a free legal advice line i get with my Union subscription. Can they help us as it has already gone this far? or should we just accept our fate!?

boredofbeingathome

I would try the complaints procedure,free advice, everything and then see what you can do from there. losing your home is a big deal and i would fight all the way.
Just to make you smile....
If it helps their office is near to me and i can suitably adorn their windows with offensive graffiti for you!!
but seriously, i hope you have a good outcome.

Banco44

Thanks i will consider your proposal of adorning their windows!!!

We are going to complain but i still can't seem to find who is governing them, even with the help "fermi" has given.

fermi

Banco44 wrote: »

Hi, no we have not spoke to anyone other than CAB and a free legal advice line i get with my Union subscription. Can they help us as it has already gone this far? or should we just accept our fate!?

I know plenty about the bankruptcy side, but I'm afraid I'm not quite read up enough on IVA's to risk attempting to suggest what hopes there are of rescuing the IVA.

That is really why I was suggesting contacting one of the other professional and 'not for profit' debt advice organisations. You really need to talk to someone expert enough that they might be able to give you a fair and honest assessment. They may see it the same way as CAB, or they may see it differently.

I've just noticed that you actually have a hearing set for the 9th of May! I missed that in your original post. If DFD have done that, then I would be surprised if they went back on it.

My suggestion (for what it is worth) would be to have a talk with one of the other free debt advice agencies tomorrow and get their take on your situation.

Banco44

fermi wrote: »

I know plenty about the bankruptcy side, but I'm afraid I'm not quite read up enough on IVA's to risk attempting to suggest what hopes there are of rescuing the IVA.

That is really why I was suggesting contacting one of the other professional and 'not for profit' debt advice organisations. You really need to talk to someone expert enough that they might be able to give you a fair and honest assessment. They may see it the same way as CAB, or they may see it differently.

I've just noticed that you actually have a hearing set for the 9th of May! I missed that in your original post. If DFD have done that, then I would be surprised if they went back on it.

My suggestion (for what it is worth) would be to have a talk with one of the other free debt advice agencies tomorrow and get their take on your situation.

Thanks i will call them tomorrow (Or today as it now is)
CAB didn't think we could oppose the bankruptcy, they said all we might be able to do is get it adjorned for a bit due to DFD not following correct procedures, But i just wondering if thats just prolonging the inevitable and prolong the stress that me and the mrs are going through, i feel quite ready to just up sticks and leave the house and privatley rent, we've simpley just had enough!