When we entered ours we were told that a mortgage at 57 and also having been in an IVA, was impossible and that was the selling point over selling the house then and renting and going bankrupt.This was in 2006.
Our main debt was my husbands( a reposesed house before he met me with not enough equity to pay off the mortgage) who incidentally have not even claimed their money, and we wanted to make him bankrupt to protect my house which for obvious reasons is still in my name, but we had a joint bank account and an overdraft of £1500 all credit cards were in my name but because this was in joint names they told us he could not go bankrupt. It has worked out all ok for us but obviously a serious mis selling again no doubt there will be huge claims in the future on this one as well...
meanwhile could I please ask anybody who knows about clearing the credit files, we are down as iva completed but all loans still in default, doe these droop off in august after the 6 years or do they have to be marked as satisfied before they drop off. thanks
ITS OVER WE ARE FINALLY DEBT FREE, CERTIFICATE ARRIVED
Vinnie - don't open up another mis-selling can of worms please!!!!
I don't know a lot about credit files, but if any defaults are posted after the date your IVA was accepted you can have them backdated to the date your iva was accepted. The creditors can do this for you - get intouch with their complaints department. It's probably not the right department but they are the ones who only have 28 days to resolve queries.
Bol. Can understand what you are saying . Don't think anyone is damning michael but seriously the proposals would make bankruptcy seems more attractive. Ivas would drop off . More people would sell before entering into an iva. Vinny they drop off anyway I was told but you can also contact creditors on your credit report witha acopy of your conpletion cert and ask them to mark them satisfied as they should be.
five years of payments and then selling your house would make ivas very unpalatable!!! It would leave a dmp as the only guarantee of keeping your home.
It is a no brainer for me! If we had had enough equity in our home to repay our debts I would have sold straight away! I would not recommend an iva in any way shape or form
If u can release enough money in which to repay your debts! People really do not realise what they are entering into and the options they may have!!
It all depends on priorities I guess - some people will protect their home at all costs and some are happy for the house to go if it clears their debts.
An IVA or BR definitely isn't an easy out and I would never recommend either purely as a money-saving exercise. There is a lot of commitment involved!
BOL as you say IVA or BR definately isn't an easy out and even after, hopefully, my succesfull conclusion of my IVA in 60 or 72 months, my debts will still not be repaid.....after all to obtain my IVA I went from "capital" to "interest only" on my mortgage, effectively signing up to a further £19,800 (60 x £330) of debt in the coming years, and I do not have anything in place to repay that money.
Obviously in the coming months/years my bank may not allow me to continue on IO mortgage, which itself could prove a major sticking point in my IVA, as creditors would have to take a major shortfall in my repayments, something that I dont think they'd relish......only time will tell.
So whilst Michael champions the cause for the creditors and lack of commitment from some of those in IVA's, lets not forget that theres many of us, for whom the fallout of our debts and ensuing IVA's will of cost many more years than the statutary 5/6 or even 7 years.
Any ideas on how I can raise the £20k on my Mortgage shortfall anyone or should I just keep my fingers crossed that, as Michael says, mortgages may be easier to come by in the future...in my case not only to repay any equity due to my poor creditors but also to continue living in my house, after all at sometime the bank will want the £20k shortfall.
The joys of an IVA eh.
Last edited by Pennyless on Fri Jul 06, 2012 6:23 am, edited 1 time in total.
I came into this world with nothing and still have most of it left!
'So whilst Michael champions the cause for the creditors and lack of commitment from some of those in IVA's, lets not forget that theres many of us, for whom the fallout of our debts and ensuing IVA's will of cost many more years than the statutary 5/6 or even 7 years.'
Pennyless.
I do not champion the the cause of creditors but I do try and be fair. I give my clients every option and whatever decision they make is made with full knowledge of the facts. Broke you are completely right. I am trying to point out the realities of what is happening and creditors are getting annoyed with 12 month extensions in lieu of substantial equity. The protocol wording says 'remortgage' but you can bet this is changed very soon to 'refinance' or 'release equity'.
At no stage have I ever said that someone should enter an IVA and then be obliged to sell their house in year 5. I have said that if they can raise equity and can afford the repayments and those repayments do not exceed 50% of their IVA payments then that is what they agreed to do at the beginning. I have only stated that a loan may be cheaper than a remortgage but some people here seem to think that a remortgage is fine but a secured loan is somehow bad regardless of the actual cost of the monthly payments!
There will be finance available in the future for people in IVAs and the rates will be severe. I know that some companies are already looking to develope products for IVAs so it is possible that when some people are in for a serious shock. You could find that a remortgage is possible after all and if the IP demands you extend the term or switch to interest only to maximise the equity release you may have little choice. As far as I am aware the protocol does not say anything about remaining on the same term or repayment mortgage so perhaps protocol is not the safety net people seem to have been lead to believe.
A final point just for clarification. Any suggestion I made about selling a house refers to before entering an IVA as an alternative to the IVA. It is an option which should be discussed and clients do sell and repay debts. I have never advocated the sale of a property while in an IVA unless that is something the clients wish to do themselves.
Perhaps at the proposal time a financial illustration should be made clear to the applicant on the potential impact of re-mortgaging/re-financing.
I got lucky and have a 3/4% above BoE base rate mortgage. So I am currently paying 1.25% on a 150k mortgage so about £630 per month.
If I was forced to remortgage to raise an extra £10k at the end of my IVA, I would be looking at minimum 7-8% interest rate so over £1000 month mortgage payment. And I would be lumbered with that for the next 15 years!!!
Insolvency companies directly linked to loan providers? Surely this is not acceptable as there must be a conflict of interest in such a link, or am i being alarmist?
Sorry Michael but your missing my point......not all of us are trying to evade or wishing to ignore the "equity release clause". In my case a remortgage towards the end of my IVA, notwithstanding the "equity" clause, is a must have to meet the shortfall of my current IO mortgage, otherwise I will lose my property at the end of my mortgage.
As for companies already making preperations for offering IVA customers "products", I have absolutely no doubt your right on the money, after all there will always be those in the market that are willing to make a risky gamble for an extortionate return........but then the question will be whether that makes an IVA viable for new customers and personally if I was faced with a 3 year BR opposed to what effectively would become a never-ending IVA I know what I'd choose.
Time will tell eh.
By the way Michael, my IVA Company also appraised me fully of the financial commitment I was undertaking when I signed my IVA proposal and as it was registered in a court of law I will adhere to it in its current form to the letter and will expect my Company & Creditors to do the same......nowhere I would add it says that I will have to accept a "loan" at whatever rate either a loan company or their affiliated IVA company decide.
Last edited by Pennyless on Fri Jul 06, 2012 11:55 am, edited 1 time in total.
I came into this world with nothing and still have most of it left!
Iamfubb2.
I do not think any insolvency firms are directly linked to loan companies but they would be aware of what companies offer which products. It would be pointless if your IP advised you to go a lender who would turn you down flat.
Mole. You sound like a perfect candidate for a loan rather than a remortgage for the reasons you describe. Any repayments would have to be no more than 50% of your IVA payments and therefore affordable, protecting your existing tracker and offering an enhanced return to creditors.
Pennyless.
I agree entirely. I actually believe that the equity clause is unjust and the two additional years payments over and above an income payments order should address any equity in the property already. If there is too much equity then the client can sell and repay their debts or enter a DMP. This was how it was in the past as an IVA was always a comparison with bankruptcy.
