anyone else had dealings like this with Northern R

[j.g]

Hi everyone its the first time i have put pen to paper although have been avid reader of the forum ever since i applied for an IVA in November 07. Well today was the day i had been dreading for sometime!!! the creditors meeting. My proposal was organised by Melanie's company and we were all very positive about the outcome today, but!! what came back basically astounded me. My offer to my creditors was i felt the best i could manage as i feel obliged to pay as much of my debt back as i can afford. Now i am just a normal working class bloke who over the years has got into difficulty trying to provide a normal lifestyle for my wife and children. As i say we were all positive about today but what Northern Rock came back and requested knocked me back for 6 (they were not even my main creditor).

As i understand it they are requesting a return dividend of not less than 60p in the pound plus an increase of £50 per month on the figure we proposed, they also wanted to extend it to 72 months and they also wanted the full surrender value of my wife and my joint endownment policy. Given that my debt is 45k the total i would be paying over the 72 months taking into affect the costs of the IVA would amount to 39k which i felt was not right. Has anyone else had dealings like this with Northern Rock as i am really worried now about the outcome.

[Adam Davies]

Hi
I'm sure Melanie will work on them.
They are an incredibly hard creditor when it comes to IVAs.The surrender of the endowment seems a fairly standard request.Are they also asking for you to cancel your life insurance ?
I suppose 39k out of a 45k debt is not unreasonable given the saving on interest and ongoing creditor hassle and possible legal proceedings.
Good luck and be sure that you can afford the extra £50 before agreeing.
Are you a homeowner ?

[MelanieGiles]

Hi there

Northern Rock do have a fairly stiff policy on IVA acceptance, and have recently introduced a sixth year into their criteria if the loan is an ordinary unsecured personal loan (not the together product which is linked to a mortgage).

They have justified this on the basis that their loans are often taken out over 7 to 10 years, and they feel that their customers should make best efforts to repay for as long as they can - on the basis that you agreed to a longer term commitment when you signed up to the loan.

My problem with your case yesterday, was the request for your wife's share of the endowment policy. I do not feel that this is fair, and we reverted back to NR on this very point yesterday and they are considering their position.

In terms of the £50 increase - in my practice we always use the higher level of the CCCS allownaces matrix, but many of the creditors will use the guidelined level - hence we do see requests for payment increases quite frequently. You must be sure that you do not agree to make payments that you really feel that you cannot afford, and we will speak about this directly next week once I have a reply from NR.

It is a shame not to get a positive result when you feel that you have put your very best offer on the table - but in my experience creditors continue to take a harder and harder line on people who genuinely want to repay their creditors.

[Emily]

With Mervin King saying a 3% inflation rate is going to arrive soon, these extra £50 per month request on IVA payments from creditors shows a lack of consideraton bordering on been crass

I suppose NR will be even tougher on IVAs in the future as this Banks is technically in debt with the Treaasury and tax payers.

[j.g]

Hi Melanie thanks for the positive response, as you know i have been 100% behind getting this IVA to go through and to make sure that my creditors got the best return i could possibly afford over the 60 months. The offer put forward was i thought a true and fair offer and one that i would have been able to honour throughout the term. What Northern Rock wanted was i thought a little unfair asking for an additional 12 months, an additional £50 per month and 50% of my wife's share of our endownment policy that i would know i would have to surrender. The IVA is solely mine and not my wife's debt so i was a little upset that they expected my wife to add her share. I would think that Northern Rock would think my wife would have a windfall from the surrender but that isn't the case as the endownment was set up to pay off my mortgage in 2016 as i am on an interest only mortgage.My wife's share would have to be invested somehow to try and raise some capital that would go towards paying off my mortgage because as it would stand in 2016 i would have nothing to repay my mortgage company with. I do hope that some common sense takes place with Northern Rock and that they realise that the offer i made was a fair offer based on my circumstances. If they don't reconsider then i am worried for the future as i only want to do what's best for my wife and children. Speak next week i am sure

[j.g]

Can i also put to the forum why am i being asked to pay 60p in the pound when i read many many IVA's approved at far less figures.My proposal to my creditors was i feel realistic and very fair at 37p in the pound yet Northern Rock want over 60p. Really confused by it all.

[MelanieGiles]

Because they want to be paid back as much as you can jg. When you borrow the money the expectation is that you pay back 100% - to get money written off is a priviledge, but it should only involve your assets and not those belonging to your wife.

At then end of the day you still have a choice, and you do not have to agree to the creditors modifications. Many people in IVAs are paying back even more than 60% because their circumstances dictate that this is what they can afford.