How to get out of an IVA - urgent help needed

[fermi]

Remortgaging in an IVA doesn't seem to be as impossible as you would imagine. It's a loan secured against property/equity, so it doesn't (or at least didn't ) present the same risk as unsecured lending.

 

I know of people who have obtained mortgages/remortgages while the record of full bankruptcy is still a recent memory on their Credit Reference Files. They don't exactly get the best deal, but it is possible. Going to be harder now and in the future I imagine though.

[Goldlady]

Thanks (again) fermi. I will contact my IP friend and see what he says. Watch this space;)

[Goldlady]

Hi again, saw my friend the IP on Monday. We are looking into the possibility of remortgaging although in the current climate it is not easy. He said that the 85% remortgage clause effectively meant that if they could not remortgage in year 4 they would have to sell the house. I have been advised that there may be other alternatives, such as extending the term of the IVA (thanks Gizmo) but I am hoping we don't have to find out.

 

I spoke to the company they got the PPI refund from yesterday just to test the water about borrowing a bit more to clear the IVA. They were in arrears on this loan for quite a while and when the PPI was refunded the company restructured the loan and sent them a refund. However while they have restructured the loan for internal purposes the records available to the call centre still show the account as being in arrears for all that time. However with the PPI taken out they were never actually in arrears. So I guess I need to make contact with a higher authority within that company about this;)

[kazdoc]

Hi, If you or your friends get stuck, why not look at http://www.iva.co.uk it is a site very similar to this one with all sorts of specialists answering queries.

It seems like the IP didnt go for the personal touch with them and kept them in the dark e.g when the creditors suggested modifications. Above all you can settle an IVA early.

Is it possible that they take some equity out of the house and offer a full and final settlement? Not sure how much they have left to pay on the IVA as it stands now, but say for example they still owed £15,000 then perhaps an offer of £10,000?

Look on the above site and see if they can switch IPs. It really is a very useful site. You'll have answers in minutes.

[Goldlady]

I will go there now. Thanks Kaz.

[Goldlady]

Interesting development. The IP have sent my friends the form to register the charge with the land registry - seems they forgot to sort it out originally. I wonder what would happen if they sold their house (assuming of course that they could).

[Goldlady]

Update on this one. We have managed to get the secured loan company to remove the default from their credit file and now looking to remortgage (know it is not the best time to try this). I am hoping that we can raise enough to make a sensible offer to the creditors to get rid of the IVA once and for all.

 

Does anyone know whether the approach should be made to the creditors themselves or to the IP? I was planning to write to the creditors - as from their point of view they stand to get zilch until the five years is up and the IP has finished lining his pockets. Opinions welcome.

[Penfold92]

When we settled our IVA last year we got the IP to earn their money and organise the deal, which they did and to our terms as well...

 

I think it is really down to the IP people choose. We searched and found a local one (who charged us) but was obvious from the start were on our side. The IVA worked out very well for us and given the now fall in house prices we are very happy with our decision to do it.

 

All the best,

 

Penfold

 

PS Since ending the IVA I discovered that most creditors had written the money off anyway and are grateful for whatever little they actually get...

Edited August 14, 2008 by Penfold92
added a PS

[Goldlady]

Here I am again on this one. I have discovered that the IP has not registered the charge with the Land Registry which is good news. They have written to my friends to say that as all their charges have now been paid they are proposing to pay a small dividend to the creditors, but want my friends to confirm that they agree with the amounts claimed by the creditors.

 

A brief synopsis of this situation is that one of the creditors increased the debt by 3k a year after the creditors meeting. I had been contemplating what to do and have now decided to SAR all the creditors to see what exactly these debts are made up of.

 

I have read other threads where the same IP has backed down once their fees have been paid. This is a totally new area for me and I have been wondering for a while how best to sort it out. I would be grateful to hear from anyone who has been in a similar situation.

 

So - unless I get any further suggestions I am going to write back to the IP and tell them to hold back on paying the dividend until we have established the true amount owed to each creditor, send SARs to all the creditors and see if it is possible to firstly reduce the O/S amounts and secondly whether the debts are actually enforceable, and then see if any of the creditors are open to FFS offers. Or should I do this via the IP?

 

In view of the current situation I suspect my friends will have no equity in the house in which case BR might be the answer.

 

Any suggestions welcome.

[Goldlady]

Further to the above post, which I still need answers to if anyone can help, I have been studying all the paperwork for this IVA and have realised that on the initial IVA proposal my friends were in a negative equity situation, based on the forced sale value of their house at that time. In that situation the advice of any IP worth their salt would have been to go bankrupt.

 

So does that mean that the IVA was mis-sold? I seriously think it was but have no idea how to go about sorting this. I am sure I will be finding out shortly and will keep posting about progress.

[Dangermouse]

Hi

 

The IP have had their money & are now faced with a year or so's work without much more. Therefore your friend and the IP now have a mutuality of interest in ending the IVA as soon as possible.

 

I am not an insolvency practioner but I have been through one myself. My advice is that the IP will be very motivated to help your friend end this nightmare. What with property prices as they are the IP has a good chance of going back to the creditors to have a full and frank conversation about the realities of your situation and the decisions you have to make in the current financial crisis. Is it not likely that your frinds now have no equity in their house? (even if the charge was put in place)

 

If an IP made a persuasive case to me (as a creditor) stating that your friends were quite likely to go BR with the result that I would likely get nothing, then I would rather settle for a signifcantly smaller payment now.

 

I know that you might not like this situation but my advice would be to focus on ending the IVA...do not worry about the claims being inflated (it happened in my case also) your friends are only paying a proportion anyway (who cares what the total is if you are making a final dividend offer?).

 

The IP will want a swift end to this and it will not help if he has to have an unnecessary argument with creditors.

 

I think you want to focus on life after IVA!

 

Good luck

 

 

Dangermouse

[Goldlady]

Thank you DM, that really extends/confirms my thoughts on what to do. I have read on here and other forums that IPs don't really pursue once they have had their fees, and you are quite right that in spite of everything my friends will still be in a negative equity situation. I am not sure how approachable the IP will be in the first instance but have written to them to say that we are trying to establish the correct amount of the debts and to ask them to withhold the dividend for a few weeks.

[Goldlady]

Update on this one. I have got the IP to agree not to issue a dividend to any of the creditors until we have established the true nature of the amounts outstanding. I haven't broached the subject of termination as suggested above as yet.

 

I have sent SARs to all the creditors. First one has responded - credit card, no agreement or application form, statements showing 1k of charges and interest thereon. Letter states that copy statements from last six years are all the info they have.....

 

Question is, can I go back to the IP, assuming that other ones come back in a similar fashion, and tell them the debts are unenforceable due to the Wilson case and the CCA 1974?

[clemma]

This is what I am going to test. I am going to send CCA's to all the OH's creditors and see what happens. If any of them are unenforceable/paperwork doesn't arrive etc., then surely the OH can stop paying them (the creditors, not the IVA). This will give the IVA people more money to put into any enforceable debts (of which I think there will be 2 for approx. £3000 in total) and get them paid off quickly! (Although, as I have typed this, I have just realised that your debt must be at least £15,000 to be in an IVA. Ah, well, I will cross that bridge when necessary.)

 

I hope it works out - an IVA is only voluntary after all.

 

ps. IVA people told me that I can write to the creditors and claim back any unfair charges (which, of course, HAVE to be paid into the IVA ).

 

So on that reckoning, it should follow that we can challenge all the agreements. Oh, I'm in a tizz about this one.

Edited January 11, 2009 by clemma

[Goldlady]

Oh cool, I am glad we are working on the same thing here. I felt so alone on this one so it can now be a joint effort.

 

Keep me posted on your progress:D

[clemma]

Will do. The biggest problem so far has been the IP. They did not want to send me the creditor letters that they had without me telling them why I wanted them. Suffice to say, I told them that I did not have to explain as the letters belong to my OH and he is within his rights to ask for copies. That shut them up.

 

I'll keep my fingers crossed for you x

[Goldlady]

Ha well done you. So far the IP has been quite helpful but then I am writing to him in my 'professional capacity' as I have authority to act on behalf of my friends. I hadn't thought of asking the IP for correspondence but that might be necessary, depending on the outcome of the SARs.

[clemma]

The one thing I do need to find out though - the OH's IVA is due for it's annual review so they want pay slips and the like. I have had a nice pay rise recently - can my wages influence how much the IP wants?

 

*apology's for the mini hijack goldlady *

[Goldlady]

It's not a hijack - most helpful. We have same problem and have so far avoided the payslips bit. And yes if your income has increased then the IP will want more money.

[clemma]

And yes if your income has increased then the IP will want more money.

 

 

How do you avoid sending the payslips though?

[Goldlady]

We have so far just stalled them. I am hoping to get this resolved asap so we don't have to send the things but they are starting to hassle for them.

[clemma]

Time to deploy my "acting dumb" technique with them then

[bizzib]

Watching this thread with anticipation as in similar situation.

 

[StinkyFeet]

Even though a annual review can increase payments if you have received a pay increase, you normally also have to advise what your outgoings are now.

Use to your advantage the fact of fuel, groceries, gas and electric increasing so double check that the actually outgoings are ok as within 1 year alot happens and requires more money to pay for these.

Dont forget that a pay rise normally rises to cost of living, hey not always the case but think that the general idea.

Also check other things such as insurance increases on cars and home, road tax that increases upto 2 times a year, mot's have increased. Taxi / bus & train fares have increased especially if this is method you use to get to & from work.

If you've had a pay increase, make sure that your increased outgoings are noted.

[Goldlady]

Thanks SF, will look at that.

 

So far we have two unenforceable debts on my friends' one. A few statements but confirmation from the creditors that they have no further information - not even an application form............ Still not sure how to convey this wonderful find to the IP. Will they accept that these debts are unenforceable?