IVA V's Current DMP

beckyc_2

Hey everybody,

Thsi is such a fab place, and I am sure with some serious searcing i could find the answer to this, but I thought I would ask before being blinded with too much info;

My OH and I are on a DMP with CCCS, as follows;

Current Debt approx £46,000
No of Creditors = 6 (1 is Northern Roak who we owe £24K to)
Current DMP payment £117 per month

Current income = OH £1100, me £1070 - mine is due to increase in August to £1300

Northern Rock are pursuing us through the Court for their debt - and are scaring me senseless to be honest
We own our own home, on a fixed rate mortgage with Platform, rate due to expire October 2009. Due to falling house prices and the state of the property we are probably in negative equity now - or nearly there.

Is it worth me thinking about an IVA? Would NR vote yes or no? How long does an IVA last?

I just feel that to know that it would all be over at a definitive time would be better than now because it's gonna take us about 50 years to repay now, and OH is nearly 50 as it is!

Please help!
Thanks
Becky!

SuzySu

From what I understand, and IVA is not much different to bankruptcy, although you do get to keep your house.

We are just about to start our own DMP so haven't had much to do with IVAs, but they are a knowledgable lot on here so you won't have long to wait.

Good luck.

caz876

Hi Beckyc,

Hello and welcome!

from what I know about Northern Rock and through my own experiences they will chase you regardless. I also think that as they seem to be so quick to want to take people to court that they probably will not agree to the IVA.

On this site the other week there was a thread from Craftingqueen who had been taken to court as they wanted to put a chargingf order on her house, but the judge refused and said she could just carry on with the DMP, might be worth sending her a message.

I wish you luck in what ever you decide...

10past6

Were with Payplan on a DMP

We were very close to signing up for an IVA, however we pulled out at the last stage, due to our current mortgage deal expiring.

An IVA last for 65 months, the 1st 5 months are taken as payment for setting up the IVA, my understanding, the 1st 5 monthly payments do not go to your creditors, that's why it's 65 months.

One of our creditors is NR, we owe very similar to you.

As yet, we've not heard anything from NR, it's paid via PP, although I have no doubt going on previous comments on here regarding NR, we will have some contact from them eventually.

I understand that they can obtain a charging order, you will not lose your home, but will take their payment if you sell, but others will give more precise details.

I would be very very careful about committing to an IVA, it's something that once committed to, will be very difficult to get out of.

Jacks_xxx

:wave: Hiya hon,

IVA's aren't any good if a lot of your debt is secured against your house. And your creditors could force you to remortgage and can take a chunk of your equity in the house - a thought which made me feel very uneasy when we looked at IVA's

The other thing that gave me pause is that lots of people get talked into a monthly amount that's just not realistic - or get ill / lose their jobs etc and find themselves unable to keep up with their IVA payments and end up going bankrupt anyway - even after they spent about £7k setting up their IVA.

It's late and I'm not very good at maths in my head but I think your monthly IVA payment would be at least £235 - which is about twice what you're paying now. Could you afford to do that?

In August 2006 we owed £96,700 plus our mortgage and our joint income is about £2600 a month so we looked into all the options- IVA, Bankruptcy, DMP etc, and ended up running our own DMP eventually (because I'm a bit of a control freak and I like holding the reins! )

So now - less than two years later - our debt is down to about £15k.

Things change.

We made a lot of changes happen - and some changes kind of just happened to us.

We hope to be out of debt by Christmas 2008. I think running our own DMP helps us to be flexible with our debt repayments and get there faster.

After adding up our grand debt total and feeling sick for a few days I found talking to CCCS very helpful. I also filled out their debt remedy form which can point you in the right direction for your circumstances. They told me typically they only recommend IVA's for a very small percentage of people with serious debt problems. For most people it's just not the best way forward.

Here's the link to the debt remedy:

https://www.cccs.co.uk/debtremedy/(S(q2oy2l45qoybxz55t2oevv45))/start.aspx?hp=4

One thing I really wish had been around at the time was Martins Guide to IVA's:

http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf

Go get a :coffee: and read it through. He explains it all so clearly that even I understand it!

Love Jacks xxx

Leixlip1

Can only echo what Jacks has said - we pulled out of our IVA at the last minute, run our own DMP and Lloyds-TSB aside all is going well. National Debtline have been a great source of advice/encouragement for us.....as well as all of the good people on this sit!!
Good luck.

Deep_In_Debt

I'm on a DMP and not IVA. I was worried about the implications of losing my house if I went down the IVA route. I can't afford to re-mortgage and can't afford to rent anywhere as I'm on my own and my current mortgage payments are affordable and cheaper than renting. I was also worried about not being able to afford the monthly repayments on a IVA as a lot can change in 5 years and I was worried about the tight bugets. I have a bit of equity in my house but not enough to clear all my debts and mortgage and can't afford to put my house at risk by re-mortgaging and not being able to afford paying an increased mortgage in 5 years time. Also, my mortgage is due to be paid off in 5 years and I want to be debt free before then and not paying a mortgage into my retirement. As it happens, I've made the right decision in doing a DMP as I've been told that I'm about to be made redundant so may not be able to afford to pay an IVA for a few months (which would probably fail). I believe a DMP is more flexible. CCCS know that I am facing redudancy and will look to reduce my DMP payments for a couple of months if necessary.

Northern Rock are not one of my creditors fortunately as I've read on this forum some horror stories about them.

Sorry if this is a bit waffly - just wanted to post before going to work.

lisabell

Hi

Just wanted to reply as i was on a DMP but just started the process for an iva my biggest creditor is NR too we owe them £34,000 think in total we owe just over £60,000.
We decided that an IVA is best for us now as at the end of a DMP the companies can add all the interest on in one swoop where as an IVA is 60 monthly payments and thats it.
Now i own my own home and was worried about them taking equity now we also have a secured loan that cannot be included in an IVA but as long as we have that secured loan the IVA and creditors cannot take the equity as that loan is secured on your home at the end of the 5 years.
They said NR can be particularly hard when it comes to IVA 's but its worth a shot if it doesnt get aggreed then we just go back to a DMP but the point we are now we are 1 year in to a DMP and most of our creditors have started to put on interest espite me writing and asking them not too.
If you have anymore questions you want to ask please PM me and will try and help
Lisa

beckyc_2

Hi everyone,
Thanks for all your replies!

I have rung CCCS today to do a review of the budget and we can increase our payments according to them by £33 per month. They are also sending me a template letter to get a redetermination for NR - which I have to send to the Court with a £35 fee!!

The guy at CCCS mentioned IVA and Bankruptcy to me - before I even asked him. At the rate we are repaying now it will take us over 20 years to get out of debt, and by then my hubby will be nearly 70! I am due to start a new job in 2 weeks with a salary much better than what I am on now, and, as it's Local Authority it's very secure. Bankruptcy scares me, and I would like to pay back what I can, so am seriously considering an IVA. I think my house is in negative equity, so they can't have that, my car I only just bought for £350, and my husbands, although flashy looking is worth no more than £1000 on a private sale so I would hope that they would let us keep that.

The guy at CCCS said that NR should agree to the IVA provided that we are paying back at least 20% of what we owe, that means our bare minimum repayments would have to be £220 per month, which I think we could manage when I am in my new job.

If we went into an IVA and the fixed rate came to an end on the mortgage next year, and our mortgage payments increase, what would happen?

i am still dubious, but feel that I need to have an end date to all of this, I know 5 years is a long time, but it does go by fairly quickly.

Thanks
Becky!

Jacks_xxx

Blimey. 20%? That's a pretty good rate. When we looked into it CCCS advised us that we'd be looking at 30 - 40 % of what we owed.

P'raps they're just glad to be getting something at least?

Also best to check with CCCS hon, but as far as I know the amount you pay in an IVA can only go up not down. So if you get a windfall or payrise it has to be declared and go towards your debt but if you lose your job or get ill and can't make the payments then the agreement has been broken and your IVA ends.

(But you still owe all the money, and most people have to go bankrupt at this stage.)

Would you been looking at doing your IVA with CCCS? (Cos I do more or less trust them.)

Love Jacks xxx

PS I forgot to say: regarding the house. Things change hon. You may be in negative equity now but in four years you might not be, and that's when they can force you to remortgage and grab your equity.

tasha999

I'm in a very situation to you, and looking at an IVA with CCCSVA. My fixed rate ends in 2010 and the advisor said that they would put a variation?! on the IVA, which means that we could possibly lower the payment if the rate increased alot.

As for the remortgage in year 4, Our advisor stated that you can only be expected to remortgage up to the value of 50% of what you are paying on your IVA, so at most an extra £110 per month in your case. Which would be deducted from your IVA paymemt for the remainder of your IVA. Hope this makes sense