Advise needed please

[claire]

Hi, I posted last week about my IVA being rejected at the 1st Creditor meeting and that my IP was re-proposing it on the 22nd March and was hoping that in the mean time that MBNA (one of my creditors) would seel my debt to Max Recovery.

I have recevently received a statement from MBNA saying the account it overdue and requesting immediate payment and telling me that my credit facilities have been frozen. I have forwarded this to my IP but does this mean that MBNA are not proposing to sell my debt? If they dont are they likely to reject at the next meeting because nothing in my proposal has changed? If the IVA is rejected for a second time what happens then? are they likely to accept a DMP? or is bankrupcy my only other option? If that is my only option would I have to sell my house? I have a 50% share in a shared ownership property (other 50% is owned by Accord Housing) there is approx £6k equity but after early redemption penalty and legal fees prob be about £2.5k left. I am a single mom and have a 4yr old daughter so dont really want to end up homeless.

Sorry to ask so many questions its just my IP is on holiday till friday and its worrying me and playing on my mind all the what ifs!!

Claire

[MelanieGiles]

Claire

Surely there is someone else at your IP's office who can help to address your concerns?

The letter from MBNA does not indicate any intention to sell on the debt. It is possible that they may reject your proposals at the meeting, but this is not certain. Why not have a chat with them directly to see what their position is?

If the IVA is rejected for the second time, the you are left with the option of bankruptcy proceedings or an offer of settlement directly with your creditors. It is unlikely that your equity would be at risk under a subsequent bankrupty, given the low value of equity available and your personal circumstances.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[claire]

Hi Melanie

Thanks for your reply

I have left a message with my IP but as yet I have not received a reply. I will try and call them tonight.

When you say I have the option of an offer of settlement directly with my creditors, what does this mean? is it a type of DMP or something different? I am unable to offer lump sum payments as i have little equity in the property and could not release it without selling, as part of the terms of a shared ownership mortgage, I have no savings and my total debt is £36k between 4 creditors. I owe MBNA £4.5k approx, Northern Rock £7k, Lombard £17000k and the remainder with Lloyds TSB. At the original creditors meeting both TSB and Lombard accepted but Northern Rock and MBNA rejected. I have had no correspondence from anyone other than MBNA is this normal?

[MelanieGiles]

Claire

Yes I do mean a DMP. How much are you offering to pay each month into your IVA?

Differing creditors have differing policies with regard to ongoing correspondence. There is no harm in only receiving letters from MBNA.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Claire
If the proposal is rejected again then I would suggest an informal arrangement with your creditors with a view to propose your IVA again at a later date.There will be changes made to the insolvency procedure where a lesser percent of the vote will be needed to approve IVAs and this will assist you.
Is this very far ahead Melanie ?

[claire]

Hi Melanie

I will be paying £394.00 per month into my IVA which will give a return of 40p in the £. Is that not enough?

[lesley]

MBNA alone could not reject your iva as they are only about 12.5% of your total debt so your IP needs to chase Northern Rock for a vote. I have had the exact same letter from MBNA this morning I wouldn't worry about it I don't think you want more credit anyway that's what has caused the problem to begin with.

[MelanieGiles]

Claire

A return of 40p in the £, providing that this is the very best offer you can afford to make, ought to be acceptable, however this is ultimately a decision for your creditors so I cannot really comment.

Neverending

The 50% majority you refer to may never come, it is an idea at present, but if it does then you are looking towards the end of 2008 probably.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[go_4_broke]

Oh dear, the Grant Thornton website is still saying November 2007......

Claire, how old is your MBNA debt, or to put it another when did you last pay them? Your letter above suggests not that long ago. Don't like to bring bad news but debts would not normally be sold for at least a year after default in my experience.

-Best

'5 years sticking my head into the Lion's mouth of debt !'

[claire]

Hi go 4 broke

The last payment i made to mbna was at the beginning of february just before i started down the IVA route. This was the last payment i made to all my creditors, i had never missed a payment on any of my loans or credit cards until my IP told me to stop paying them!!