Applied for IVA. Sick with worry

judojub · 21 February 2011 at 11:32AM

Hi Everybody.
Over the last few weeks this forum has been a complete god send. Only now have I had the courage to post.:(
We are in the early stages of applying for an IVA. We sent our paperwork off to our IP last week and now it's all just the waiting game which is quite frankly making me feel physically sick.
I am, by nature quite possibly one of the planets worst worriers, doesn't matter what it is, I will worry about it.
Anyway, myself and OH between us owe approx 35k in loans and credit cards, the majority of which is with one bank! Our IP has come back with an initial monthly payment of £240 per month which compared to what we are currently paying on debts sounds pretty good to us. I know that figure may well change. I am worried sick though that when it comes to the meeting this will be rejected because the bulk load of the debt lies in the one place. If it is rejected I am worried sick that I will be back to square one in arrears with debt (never missed any payments on anything in my life until now):(
I am petrified of bankruptcy. I really don't want that. I don't want to lose my home ( it's in negative equity).
I know I am rambling and with no real questions. I guess I just need a shoulder (or several) to cry on.
This forum has shown me that there IS light at the end of the tunnel but me being typically me, I still can't see it yet:(
Please anyone, feel free to give me a good telling off, something, anything.

BudgetDude · 21 February 2011 at 12:32PM

Hi folks, I'm the other half and would really appreciate any advice from others that have been through this process. I can confirm that judojub IS the world's worst worrier, but hang in there sweetie, we'll get through this...

Just a point to add to jubs post, the majority of our debt is with Lloyds and we've still got a perfect history of making payments even though it has been to the detriment of getting further and further in debt elsewhere, we just can't keep it up anymore... do you think they'll look at this favourably? as we've been longstanding customers of theirs and have paid off previous credit as required and earlier over the years.

Grant Thornton seem to think that we have a strong case and although I don't completely trust places that command such high commissions, it really does make sense that they wouldn't support us in the first place if the process were to fail as they'd be left with zilch.

Anyway, jub has applied for a Natwest Step account card, the paperwork is with GT, so let's see how this rollercoaster ride turns out... I suspect it'll be like a rainy day at Alton Towers whereas jub thinks it's going to be like Final Destination.

NeverAgain_2 · 21 February 2011 at 12:40PM

With 35K debt and negative equity, bankruptcy would seem to be an option worth considering, you have nothing to lose.

You say you are petrified of it, but it could provide a fresh start sooner than an IVA.

There is nothing to be scared of by the process itself, a few forms, a visit to the county court, some people don't even see a judge.

You are right to be concerned about the ramifications, which no one really knows unless they've been through it.

On t'other hand, most posters on MSE who declared themselves bankrupt say they were glad they did.

I'm not recommending bankruptcy, but there are a lot worse things that could happen to you.

BudgetDude · 21 February 2011 at 12:50PM

Hi NeverAgain, do you think if we were forced down the bankruptcy route that they'd have any interest in the house? We're about 110% LTV.

judojub · 21 February 2011 at 12:53PM

Hi NeverAgain, I guess I have just had my mind set on an IVA as being the best route for us. With two young children, the thought of possibly losing my home is something that I didn't really want to contemplate. IP has explained the possibility of remortgaging in 5th year if any equity but we would still have our home. I guess I might need to read up on that side of things a bit more.

NeverAgain_2 · 21 February 2011 at 4:23PM

...that they'd have any interest in the house?...

If the house is a major part of your debt, you might be better off without it.

There are worse places to be than debt-free and renting.

I believe bankrupts can keep hold of the house, but it's not something I know a great deal about.

As you say, worth a bit of research on your part, and maybe a question on the bankruptcy board if bankruptcy emerges as a serious option.

AintGotAClue_2 · 21 February 2011 at 5:12PM

I am in a very simular position to yourself and looked at both IVA and BR with unsercured debt totalling 51k. The only reason that I choose IVA over BR was the future employment difficulties, not being able to be a director of a company if registered as BR.

A friend of mine went through a simular thing 18months ago and he couldn't get the IVA agreed because the dividend was too low. He went BR but was allowed to keep his house and the mortgage as he was in negative equity and could afford to pay the mortgage as his only debt.

Look into it further.

FoggyBrain_2 · 21 February 2011 at 6:43PM

Rules have recently changed regarding houses .... the OR will now keep a charge on the house for 2 and a bit years, in the hope that some equity materialises --- if, at the end there is equity -- the house could be sacrificed for the benefit of creditors. Grant Thornton should explore all avenues with you before you commit to IVA.

judojub · 21 February 2011 at 7:03PM

Thank you all.
Grant Thornton have up to now been very forthcoming with their advice. I briefly spoke to them about DMP but this was never a serious consideration for us and apparently it would take us just over 14yrs to pay the debt off!!
They have also spoken to us about Bankruptcy and IVA being the only realistic options. I told them from the start that I wanted to avoid bankruptcy ( I had only researched IVAs).However, I must start acknowledging the fact that BR is very much a possiblity. All I know is that for my own sake and the sake of my little family, we can't carry on as we are any more.

FoggyBrain_2 · 21 February 2011 at 7:09PM

By the way -- on the subject of GT's fees ... the norm these days is about £1750 - £2000 for the prparation of the proposal ( Nominees fee) and then 15% of the realisations thereafter (Supervisors fee). This is what is usually asked for by the creditors, although some IP's will pitch a little higher in the hopes it doesn't get forced down by the creditors (bargaining room).

Don't be afraid to chat to several companies ( a list with reviews can be found at https://www.ivs.com) -- after all this will be a long association, so you need to be happy with your choice.

judojub · 21 February 2011 at 7:13PM

Thank you FoggyBrain. Those figures you mention are indeed the figures that our IP has put down in the initial paperwork she sent to me!
As I said earlier, she has come up with £240 pm on approx 35k debt. According to her figures that would be around £14,400 (less her fees I suppose).
Does this sound reasonable or ridiculous?

Applied for IVA. Sick with worry

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