Another IVA, chalange CCA or just go BR

[Disco Dave]

A right mess

Hi All

Looking for some advice as my IVA has now been failed and I don’t know where to go next.

In Nov 2007 I entered into a IVA covering £50,000 + of debt. The basis of this agreement was that following 12 nominal payments of £150 being my judged available spare income, I would then introduce £23,000 by way of a re-mortgage on my property.

No one knew of course that the world would go into recession, house prices would crash and mortgages would be like rocking horse droppings. How a year can change things! When the lump sum was due the administrator contacted me asking me to make the arrangements. I duly contacted my mortgage adviser who informed me that my loan to value ratio was at its maximum with my current lender and that a request for a further advance wouldn’t be successful and even if an offer was forthcoming it wouldn’t be for anything like the £23,000 I was looking for. He also told me that self cert mortgages just weren’t available any more and certainly not with my credit record. So I did the one thing that got me into this mess in the first place, STUCK MY HEAD IN THE SAND for several months till my administrator contacted me again.

At this time I let him in on the problem his reaction was to tell me that if I was unable to discharge my responsibilities he would have to fail my IVA, he suggested a visit to the local CAB. Whilst I was waiting for my appointment I actually read the IVA document for the first time and discovered several errors, this proved to be the most enlightening part of the hole two hour sham, I knew more about my situation than the woman I was talking too, she failed to fully and properly answer any of my questions!

However reading the IVA document caused me to request I variation to the IVA agreement and forwarded a proposal using the figures in my original IVA that would offer my creditors a 12.5p in the pound return against a bankruptcy return of 3.5p in the pound, my administrator refused to propose this on the basis that in his experience creditors would no except a return less than 19p in the pound.

He has now refunded all the payments I made over and above the 12 required by the IVA and issued a certificate to fail the IVA and a final statement. This was toward the end of September.

So far the only creditor who has contacted me is Hillesdon securities re. City Finical (credit Card £14,747), I have requested the CCA in an effort to stall.

Most of the debt is un-secured on credit cards, internet loans, benefit over-payments and overdrafts, so could be challengeable.

BUT

Would I gain anything or is bankruptcy the only option?

The thing that worries me about Bankruptcy is the house?

Wife with 50% ownership and two kids (13 & 9), value for fast sale £180,000 sit and wait £200,000, with a mortgage of £156,000.

At best my share is worth £12,000 this would be unaffordable for us to buy back from the receiver.

My income is made up from my full time employment as a shop assistant £12,000PA and profit from running a mobile Disco is currently around £3,000PA, the disco kit is worth at best £3,000 including the van.

Would the disco equipment be considered an asset by the receiver or would it be classed a tool of the trade and therefore be safe?

Is there any way I can legally protect the disco equipment, a partnership maybe?

Any ideas as to what I should do??????

Help

Dave

[Guest Old_andrew2018]

Hi dave

As you have no replies I have bumped your thread in hope that someone can answer

[loobyloo85]

Hi, I am sorry to hear that you have had problems with the IVA.

In response to your queries:

At this time I let him in on the problem his reaction was to tell me that if I was unable to discharge my responsibilities he would have to fail my IVA, he suggested a visit to the local CAB. Whilst I was waiting for my appointment I actually read the IVA document for the first time and discovered several errors, this proved to be the most enlightening part of the hole two hour sham, I knew more about my situation than the woman I was talking too, she failed to fully and properly answer any of my questions!

However reading the IVA document caused me to request I variation to the IVA agreement and forwarded a proposal using the figures in my original IVA that would offer my creditors a 12.5p in the pound return against a bankruptcy return of 3.5p in the pound, my administrator refused to propose this on the basis that in his experience creditors would no except a return less than 19p in the pound.

The IVA proposals contain a bankruptcy comparison which shows the creditors how much they would receive from you in bankruptcy, compared to the IVA, and for anyone making more than a 10% offer in an IVA (as long as IVA % is higher than bankruptcy), you can propose this.

I understand that you included within your proposal, an offer of equity. Usually this amount will be proposed based on the value and balance of any secured charges as of the date when your proposal was put together to calculate the amount of equity you would have had then. But as you say, with the economic climate the way it is, it is likely that the equity would have reduced dramatically. However, when you come to remortgage for this amount, as you did, if you find that you cannot get a remortgage with the way things are, there is a clause within the IVA proposals which states that you must give evidence that you cannot remortgage. If you cannot remortgage, you must contact the supervisor, who will either arrange another meeting with your creditors to see if they are willing to accept payments in lieu of any equity on the end of your IVA, or just continue to make monthly payments. Your IVA would only fail if you have missed 3 or more payments (or depending on the company you were with, this may be slightly different), however I cannot understand why they would fail your arrangement on the grounds of you not being able to get the remortgage.

BUT

Would I gain anything or is bankruptcy the only option?

There are other IVA companies out there who are far more professional than others. Therefore, bankruptcy is not your only option. You would be making a good offer in the IVA, therefore it would be worth applying for another with another company. Some companies do not charge upfront costs to the IVAs, so you wouldnt lose anything by trying.

I understand your proposals were put together a while ago now, but as of now anyone who tries for the IVA with a mortgaged property, will just need to have a valuation at this stage to show how much equity there is, if any in your property as of now. If you have more than £5000 equity in your property, you would be expected to remortgage to pay in 85% loan to value of this amount, in the fourth year of your IVA. In the 4th year, the creds may ask for a further valuation to see if equity has changed. If you have less than £5K equity in the 4th year, you wouldnt have to pay anything in, and if you have £5K plus equity, you would need to attempt to remortgage to release 85% loan to value of this amount to pay in on top of your monthly payments. As above, if you cannot get a remortgage, you must provide proof of this, and then make an extra 12 months payments in lieu of any equity on the end of your IVA.

The thing that worries me about Bankruptcy is the house?

In bankruptcy, your property along with any assets will be at risk. The IVA is an alternative to bankruptcy where all assets are protected.

Wife with 50% ownership and two kids (13 & 9), value for fast sale £180,000 sit and wait £200,000, with a mortgage of £156,000.

At best my share is worth £12,000 this would be unaffordable for us to buy back from the receiver.

If you go bankrupt, and your property is at risk, I think you can buy your share from the OR, but I would not be sure on any amounts that could be acceptable.

 

My income is made up from my full time employment as a shop assistant £12,000PA and profit from running a mobile Disco is currently around £3,000PA, the disco kit is worth at best £3,000 including the van.

Would the disco equipment be considered an asset by the receiver or would it be classed a tool of the trade and therefore be safe?

You would need to declare this as an asset, however due to the value of this, and the significance of having this for your trade, it would be unlikely that the OR would ask for this from you. If you lost your disco job, they would get nothing.

Please remember that although bankruptcy is 12 months and a good option for some, the OR can ask for you to pay into bankruptcy for 3 years before you are discharged, as an income payment order.

Best wishes

 

Is there any way I can legally protect the disco equipment, a partnership maybe?