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IVA and Correct Credit Marks

edited 30 November -1 at 1:00AM in IVA & DRO
16 replies 3.7K views
Jam99Jam99 Forumite
8 posts
edited 30 November -1 at 1:00AM in IVA & DRO
Hi, my IVA was approved Feb 2018.
My IVA is with Aperture (not by choice as was with Swift).
I am wanting to make an offer in full and final settlement.
Apeture has advised the amount to offer.
My 2nd charge lender has proposed to lend the amount required in principle, however for this to proceed to a formal offer which I can then confidently put to Aperture. The lender has requested that 2 out of all my unsecured creditors on my credit report are showing as marked 6,6,6,6 each month and status “Arrears”. All the other 6 unsecured creditors are marked as D each month and status Default at time of approval or just a month or two after.
My lender has said the 2 need to be set and read as “D” each from the date of or a few weeks after the IVA was approved and status Default. Then we can move to formal offer stage not a problem.
My lender has said that all the unsecured would expect to be marked as “D” each month status Default (happy to lend if Default is more than 12months old).
Also I still get letters of Arrears from the 2 creditors. Which I have forwarded to Apeture (3wks ago, no response chased up with phone calls no answer no response, extremely poor service). I have checked if there were included in the IVA and yes they are.
I have asked Equifax to look at correcting them. Waiting for an update (quite responsive though).
My question is what should the marks and status be once an IVA has been approved?
Who should review the creditors status immediately after IVA approval and pursue any changes required?
Desperate to get this sorted and settle early (which I am sure creditors would appreciate instead of going to the 5/6 year term). Also calculated settlement after the 15% equity retain rule and the 5k rule. All figures stack up to the suggested figure by Aperture.
Thanks in advance.
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Replies

  • foxy-stoatfoxy-stoat Forumite
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    I would read your IVA agreement - you are not allowed to take out any further credit while you are in it, apart from in year 5 to release equity.

    You sure that your IP is ok with you obtaining credit in this way?
  • PrettyKittyKatPrettyKittyKat Forumite
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    Taking out more credit to offer a full and final settlement variation is certainly a new one on me! Although I acknowledge things have changed since I worked in insolvency foxy-stoat makes a good point about additional credit not being allowed.

    Is your IP happy to put forward a f&f variation based upon taking out more credit?

    In response to your question if the full and final variation is accepted, once the final report and completion certificate are issued (approx 6 months on average but some firms are more or less) then the creditors should update their accounts to show the debt as 'partially settled' and any defaults should be dated from the date the IVA was accepted or before. Depending on how fast the creditors process their incoming mail, and when they report to the credit reference agencies it can take up to 3 months. Once 6 years from the date of your IVA being accepted has passed the debts are then removed from the credit file (as the default is then over 6 years old). If any of this is not done correctly it is your responsibility to contact your creditors (NOT the credit reference agency) to get them to update their records. It is recommended to send a copy of your final report with your query.
  • PrettyKittyKatPrettyKittyKat Forumite
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    Sorry I have misread your OP. You have asked about what happens upon acceptance not completion (sorry).

    After an IVA has been accepted different creditors show the debt in different ways. Some may show an arrangement is in place. The most important thing is that if they have defaulted you then this must be dated from the date the IVA was accepted or after. To be honest most people do not worry about the status on their credit file upon acceptance as they have 5-6 years on an IVA and can not get credit in that time anyway. If you want a creditor to default you and show this status on your credit file then you need to contact the creditors and request this.
  • Jam99Jam99 Forumite
    8 posts
    Thanks foxy-stoat for you comments appreciated.
    A solicitor has checked all my documents, IVA proposal and Chairman’s IVA approved report. Also made contact with Aperture to discuss early settlement and where the funds would come from. No issues have come back.
    Your valued comments gave me more food for thought as well. So I have undertaken further research into equity release to offer f&f. It seems there are one or two debt help websites and chats that do say it is possible to offer to end an IVA early via equity release.
    The only issue is the status of 2 particular creditors not being marked as D from when the IVA was approved, to move to formal offer with confidence.
    Many thanks.:)
  • Jam99Jam99 Forumite
    8 posts
    Thank you PrettyKittyKat for your valued comments appreciated.
    I have been looking into what the status should be and that your statement relating to creditors status on date of IVA approval is really helpful. I will keep pursuing to get my creditors status corrected. To give some grounding is there some resource where I might find this statement so I could formally include it my correspondence?
    Many thanks. :)
  • mwarbymwarby Forumite
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    Jam99 wrote: »
    So I have undertaken further research into equity release to offer f&f. It seems there are one or two debt help websites and chats that do say it is possible to offer to end an IVA early via equity release.

    Seems very odd as the lenders and IP would have known about this equity when the IVA was drawn up. Would the lenders and IP not be expecting to get the monthly payments and equity, not one in exchange for the other
  • foxy-stoatfoxy-stoat Forumite
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    Still scratching my head as to way you went down the IVA route only to try and pull equity out shortly after, but if your solicitor has looked at your paperwork then happy days....still dont know why you would get your solicitor involved in your insolvency.

    Good lucks
  • PrettyKittyKatPrettyKittyKat Forumite
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    I have to echo foxy-stoat's post.

    Equity is included in an IVA. Creditors would not accept this instead of monthly payments to end an IVA early, as they are expecting you to release the equity and introduce it in month 54 anyway. Don't forget a f&f variation offer has to be accepted by the creditors so they need to be pursued that it is in their best interests to do it now.

    Please ensure the solicitor you have approached specialises in insolvency. Sadly we had many customers call us and declared that a solicitor had advised them of /x,y and z' which were completely incorrect. Whilst I think most of the client were just saying this and had not actually approached a solicitor (not saying that is your case btw) we did also have the odd solicitor letter trying to say that the requirements of the IVA were illegal, which of course they were not.

    I'd hate for you to spend all the time and money (as I presume the solicitor is charging for their advice) when what is being proposed is not possible.

    I don't have a link to the exact wording re: the default date. Your solicitor should be able to find this for you though.
  • Jam99Jam99 Forumite
    8 posts
    Hi, all thanks for these valid comments.
    Sorry I have tried to get an understanding of how my credit report marks can be corrected (and what should the read after IVA approval) and who is the best person to enforce it to help me move forward to settlement.
    Noted comments relating to equity, I have tried to keep my case brief and focused on the above and I understand some head scratching going on.
    So here goes some way to help give a more fuller picture. From a failed business I still had 2 personal guarantees to obligate to pay back (60K was the balance at liquidation around 2 years ago). I managed negotiation of a repayment plan of 10 years and no further interest. However, they would only agree to this with my property as collateral (2nd and 3rd charges). So this negotiation was agreed then I needed to tackle the unsecured creditors which where the IVA comes in. 6 months down the line and some sleepless nights (got a job etc). An IVA was approved based on equity available which was around 15/20%.
    Now since the time has passed (over 2 years since liquidation) the balance of the 2 secured creditors has come down and I have also managed with help from my solicitor to get an agreed discounted lump sum settlement agreed in writing, which enables to offer to settle the IVA balance. My property has gone up and there is just enough to settle all round (hopefully the 2 secured creditors will be patient as it has been 3 months since the lump settlement figure had been agreed in principle without PJce etc).
    Potential savings per month is around £650. So big incentive to get this all sorted with creditor status/marks.
    I have taken further advice and that it is possible to release equity from you’re home to offer a full and final lump sum variation.
    Really appreciate all feedback and further comments would be welcomed very much appreciated (it has a minefield and I have experienced some very dark times) However, I have loving supporting wife and children so life is good and can only get better!
    Thanks��
  • PrettyKittyKatPrettyKittyKat Forumite
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    Ok. I must admit I'm still curious as having seen several hundred variations it isn't something I've ever known be accepted (although that's not to say it won't!). The creditors would be expecting your equity to be introduced, so if it has increased they would expect more not just the amount estimated at proposal.

    I know you say you have had alot of advice from a solicitor, we are just trying to make sure you have been given the best advice.

    Just to check - have you been made aware that it is not a given that the creditors will accept you getting a second charge on your property to introduce the money?
    Have you completed the application to ensure that the creditor would definitely give you the funds? As if they then change their mind you are in breach of your IVA and it could fail and creditors petition for your bankruptcy (i saw similar with a customer offering a pension payout and then weren't able to release it)

    How soon after the variation is accepted will they then send the money? I would recommend your IP writes a timescale into the variation (e.g. 4 weeks after the variation is accepted would probably be standard however your IP may be willing to suggest longer if needed).

    Has your IVA company drafted the variation proposal and send it to you for approval yet? If not, have they told you the timeline for doing this? As for some IVA companies it can take up to 3 months for them to do this.
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