a F&F or a D M P?

[Jonny Bravo]

I have contacted a mortgage broker recommended by CCCS and have initial approval on a re-mortgage which would enable me to offer a F&F which will pay off the original I V A (less IP costs), or I have no objection entering a D M P which will give back to our remaining creditors their original outstanding balances. When we took on the original credit it was with the honest intention of paying it back.

How should we proceed? If we could we would like to remove the negative impact of our I V A (to be honest, I feel no sense of stigma), although at the time I would have taken my arms off for it and would wholeheartedly recommend to anyone in difficulties such as we were to give it a go.

[Adam Davies]

Hi
I presume that you are already in an IVA and are looking to remortgage to settle your IVA early ?
Have you spoken to your IP and asked for a figure that they feel will be accepted by your creditors and do you have a fourth year equity release clause ?
I don't understand your reference to a DMP,please clarify
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

If you could afford to pay off your creditors by offering an ongoing DMP - and this appears to be rather strange advice - I cannot see you getting creditors to accept a reduced settlement from a re-mortgage. Maybe I have also misinterpreted your post, so additional clarification about the two alternatives you describe would be gratefully received.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Ghostboy]

Hi Melanie and Andy,

My original question did not copy across properly. Also changed my username (forgotton password). We are currently 30 months into a 60 month IVA with a Final Equity Release of £3,000 or continued payments to that amount.

In the past 12 months our circumstances have changed (increased salaries due to promotions and large increase in valuation of our home). As a result of the salary situation our IP has come back demanding that our payment should rise to £1,200. This is down to a clause which states that this can be done by "...a reasonable increase...." However, our combined salaries have not increased by as much as this.

I have no problem with an increase which reflects our improved position but our IP has rejected out of hand our budget and in particular has decided to refuse an element I had included which covered my daughters’ accommodation fees (1st year only) of uni.

I asked my IP if I could offer a settlement figure (assuming I could raise the money), and was told that I would have to contact each creditor individually. Of all our original creditors, some 56% (£33 350.82) have been bought out by Max Recovery. Am I correct in thinking that this would have been acquired at a figure less than the original dividend?

As to the balance of creditors (£25 905.39), would they be likely to accept the original dividend or something slightly more? I suppose what I am asking is, do you think I should offer a F&F? Or given our financial improvement, can I have the I V A status changed to a D M P?

When we took out the original credit, it was with the honest intent of repaying but due to our circumstances at the time of the IVA, it was the correct way to go. By paying £1,200 per month (if it must, then so be it), we will not be all that far away from our original amounts.

Would much appreciate any advice or pointers you could give. Thank you.


One time irresponsible borrower of irresponsible lenders' money!!!

[Adam Davies]

Hi
Your IP has a duty to check your disposible income and increase payments if required.
As for offering a full and final it is NOT for you to contact your creditors but for your IP to arrange another creditors meeting and propose your offer.
You will have to convince your creditors that the best way forward is for them to accept your F+F but given your increased income and the fact that they already have a slice of your equity it may be an uphill struggle.I also feel from your post that your IP is not on your side.
You have the option to stop paying into your IVA and to try and start a DMP plan with your creditors but as I,ve stated before you run the risk of bankruptcy.
My advice would be to crack on with your IVA and to try and come to an agreement with your IP over expenditure
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Ghostboy]

Hi Andy,

Many thanks for your reply. You are right in that I seem not to get on with my IP. Each time I contact them or they contact me, it is a different person. This guy opened up by saying that our income has increased and questioned me if we were working overtime etc.

The bottom line is that it ended up quite heated as I found his attitude offensive, especially when he denied receipt of correspondence I sent to them with my budget. This was legal threats from a debt collector acting on behalf of one of our creditors. We are still receiving them.

He simply told me to call them but I retorted that as they were picking up fees etc., it was their responsibilty to keep all parties to this agreement in check.

I also asked him that as we all agreed to abide by what is essentially a contract, could I not claim that by continuing to pursue us, one party or side of this agreement may default by taking legal recovery action. I got some kind of garbled reply followed by a huge increase in monthly contribution.

I feel at this point that we could manage a DMP without the risk of bankruptcy as we are both in secure employment. But I am not too sure how this would effect creditors who have sold their debt.

Another alternative as you say may be to ask how much the creditors would accept to "buy out" and try a remortgage.

Cheers

One time irresponsible borrower of irresponsible lenders' money!!!

[Ghostboy]

Hi guys,

Forgot to mention that payment increase is from £360 to £1 200.

One time irresponsible borrower of irresponsible lenders' money!!!

[Adam Davies]

Hi
Wow that's a huge increase[well done],what dividend were you going to pay and what were your original debts going into your IVA.
I guess that you are with a large IVA provider and that you are not actually talking with your IP but various case workers.
Please post the details and we can advise further

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

If you have received that sort of increase in disposable income, your IP may be feeling that your creditors are better off by allowing the arrangement to continue with you paying higher payments.

If you do not agree to the IP's decision regarding costs, you can always take your case to Court, and there have been a number of test cases which support the funding of children's educational costs which could be helpful to you.

Why don't you try and arrange a face to face meeting with the IP to try and sort this out sensibly, as there must be some common ground to be found.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Ghostboy]

Hi
Wow that's a huge increase[well done],what dividend were you going to pay and what were your original debts going into your IVA.
I guess that you are with a large IVA provider and that you are not actually talking with your IP but various case workers.
Please post the details and we can advise further

Andy Davie
IVA.co.uk Spokesperson

About me:

http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Andy,

Original divi was 25.6p/£ on total debts of £56k.

However, I don't believe the increase to be "...reasonable...". Yes, our income has increased but not by as much as we could comfortably afford this 4 fold increase. If we have to, then we'll just have to knuckle down.

I think I'll arrange a meeting with them and put pur cards on the table. We've played it completely straight with them and don't intend to do anything else.

Regards

One time irresponsible borrower of irresponsible lenders' money!!!

[MelanieGiles]

Why does the IP feel that you can afford such a high increase?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Ghostboy]

Melanie,

This is what I was thinking. I have telephoned a solicitor who has asked me to come in and talk with a view to advising on this. Then I think I will take both your and Andys' advice and seek a meeting. These guys have been pretty good and understanding up to now - maybe got the wrong chap at the wrong time.

Regards

One time irresponsible borrower of irresponsible lenders' money!!!

[MelanieGiles]

There is always a deal to be done at the end of the day, no-one will want to go to Court, but you must ensure that you are left with sufficient money to live a reasonable life and therefore have the incentive to carry on making the payments.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Ghostboy]

Why does the IP feel that you can afford such a high increase?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

Dunno Melanie,

It shocked us to see such an increase. I gave a budget which showed annual income backed up by p60s and sample wage slips. He comes back and disallowed childs' education costs and some sundry item. Overall these figures added to £360 come nowhere near £1,200. I think we were expecting about £550 - £600 per month.

During our phone conversation he said he would apply an increase but refused to give an indication of how much.

Regards

One time irresponsible borrower of irresponsible lenders' money!!!

[MelanieGiles]

Is the difference your child's educational costs? What are these comprised of, and have they taken out a student loan?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp