Awkward Creditors

[SUC]

I am re submitting my IVA proposal again as I agreed for one of my creditors(FGA Capital) to secure their debt on my property with the intention to set up a small repayment plan. Now that they have secured the debt on my property they are now threating to force sale my property to recover their money. They will not answer any of my correspondence with regard re payment plans. FGA are aware I am re submitting by IVA proposal and also have a detailed income expenditure details. I feel I am being backed into a corner by this creditor and being forced into bankruptcy over £4000. Any advice welcome

[Foggy]

Hi. I am afraid, as I understand it, that the IVA will not stop FGA from taking any action to recover their debt. It is never a good idea to secure a previously unsecured debt as this opens the doors for the creditor to take action against your property. However, sometimes the issue is thrust upon you, leaving little choice.

The silver lining, if the IVA goes ahead, is that the repayments to FGA will be ring fenced in your allowances. As long as you make the payments as scheduled or an amount they now agree to accept, after catching up any arrears, FGA will not move to re-possess, as long as your agreement with them doesn't give them the right to do so if you enter into any insolvency proceedings with others.

A lot will depend upon how the agreement you entered into with FGA was brokered -- if it could be shown that they actively mislead you a court will take that into consideration in any proceedings.

[Michael Peoples]

FGA cannot bankrupt you now as their debt is secured but if they have secured against the last of your equity or you are in negative equity bankruptcy may be the best option and use your surplus to repay the secured charges. If the IVA goes ahead they will struggle to get a possession order if you are trying to repay so it may be bluff on their part.

[SUC]

Michael. Thanks what I thought, just needed to hear it from someone else

[MelanieGiles]

A secured creditor can proceed with bankruptcy proceedings, if they choose to revalue their security and thus create an unsecured debt - however this is probably unlikely.

I would doubt very much that a judge would grant an order for possession and sale over a property where a relatively small debt is being serviced fairly - and we are acting for you, rest assured that we will deal with any shenanigans raised by this unhelpful creditor as it arises.

[Foggy]

You are fortunate to have Mel's team behind you as, unlike many other firms, they really do "fight your corner" when the need arises.

[MelanieGiles]

Just doing the job we are instructed to do at the end of the day Foggy, but thanks for the endorsement!

[SUC]

Had my creditors meeting today, and whilst I got about 74.8% in favour of acceptance I am still not over the line although I am still hopeful Mel's team will manage to get me over it with a bit negotiation. One question did pop up was my wife not working, which raises a potential problem in the future. I have 4 children aged between 7 and 18 and as I am sure you will appreciate time consuming and rewarding however with my job I am abroad most of the working week, therefore the ability for my wife to work is to us impossible as any wage earned would go in childcare. I am fortunate to have a reasonably well paid job and any overtime I get say working an extra day would take my wife to work a week if she was on min wage on 40 hours per week. My IP is aware of this but slightly nervous that in the coming reviews my creditors or IP could alter this by insisting my wife works. This would have an impact on my ability to function at work as well. Maybe I have an over active mind and worrying about pitfalls, but I must get over that line first

[Shining]

Oh so close, I'm confident that Mel and her team are doing their utmost to negotiate further.

I can understand your concern in respect of your wife working, but like you say let's get over that line first and hoping to read some positive news in the not too distant future.

[mole]

Good luck SUC, if it makes you feel better my IVA was rejected twice before finally falling over the line (due to two particularly, in my opinion, awkward creditors).

If you wife in not in an IVA, I cannot see how anyway that creditors can force her into work. However, nothing would surprise me.

[SUC]

Yes she is in a joint IVA but the proposals where on why salary alone. Third time lucky. If she was forced to work then I would have to reduce my hours
and hence be worse of financially. Then this would be a waste of time and file for bankruptcy.

[Hair_bobbles]

Personally I wouldn't worry about that. I was in a joint iva with my husband. Have 4 kids also & don't work. My husband is self employed & works away alot & has erratic hours-
They cannot make your wife go out to work.

Hope it works out for you. However I will give you a little bit of advice with the income & expenditure allowances : make sure you have got an extra bit of allowance for school uniforms, PE kits & trainers & school shoes factored in & also school trips.

We didn't!! & found it a huge headache every year- hindsight is a marvellous thing...

[SUC]

I am quite optimistic, just don't want any surprises once I enter into an IVA. Just want to get on with it without any hassle or intrusion. Funny with kids you never have enough money. Thanks

[Struzzo39]

Good luck, hope all goes well. Keep us posted

[MelanieGiles]

I was asked my opinion on this today in the office - but did not have time to fully understand what your wife was being asked to do. This is a ridiculous modification, which we seldomly see these days. An IVA cannot bind any third party into an agreement without their permission, and also this modification is unenforceable and impossible to supervise.

I'll share my more detailed thoughts with Sue and Claire tomorrow - and feel sure we can get this "over the line" for you.