Can I get some straight answers?

[Brandon]

Hi All
Just joined. I found you through Google.
Anyway, I'm about 18 months into my IVA. I owed a lot so payment is over a grand a month. I can never seem to get a straight answer to this question...
Is any of my debt being written off and if so, when does this happen? My IP won't answer this question.

Do some creditors write off debt from the start?

Also, I hit a bad patch and got two months in arrears. I had some unexpected bills such as car problems and boiler breakdown all at once. I kept them (IVA company)informed of what was going on. Even asked to have a payment break as soon as I saw the problem. It took them ages to get back to me so I missed the payments as I needed hot water and heating (this was winter) as well as my car as I carry equipment to appointments.

I felt bad for taking the break and I know I owe arrears and hope to pay them back but I can't do it now. They want it, I don't have it. Its hard enough to make ends meet as it is.

Anyway, sorry to sound so angry but I just want to know is debt written off? If so, how?

Also, can anyone tell me if you can switch IVA companies?


Any help would be appreciated.

All the best!

[MelanieGiles]

Hi Brandon and welcome to the forum

It is odd that your IP will not let you know as to whether monies are being repaid to your creditors. There is no reason to hide this from you, and it is nice to see that you are still taking an interest in the creditors.

No creditors will write the balance off until the end of the IVA when you have delivered the pledge you made to them at the outset.

You cannot easily switch IP companies, but why not ask your IP if you can tag the missed payments on at the end of the arrangement rather than struggle to pay unaffordable amounts now.

[Viki.W]

Hey brandon, welcome to the forum, so glad you found it.[:)] X

[carlmcmullen]

Hi Brandon,

I am sure somebody else will be along shortly with further answers.

The first part about your debt being written off, i expect it a percentage will be written off.

Easiest way to work this out is take your monthly payment and mulitply by the term of your arrangment (i.e £1000 x 60 months) and if this totals less than your debt, then yes some of your debt is being wrote off.

The debt is wrote off once you have completed your IVA and certificate of compliance has been issued.

Hope this helps and makes sense.

Carl

[Brandon]

Hi All
Wow, you are quick and friendly too. Thanks for welcoming me.

Melanie, thanks for the quick response. What I am confused about is that if they advertise they can write your debt off (some of it that is) why do you have to pay it all first? I was under the illusion that some would write off what you owe them, or a proportion of it?

By the way, I did ask them to tag the arrears to the end of the plan and they said they did not want to do it. (to be honest - they will have to as I don't have it at the moment).

I find them very bad with communicating too. I write letters (I like everything in writing) they lose them or ignore them and often they are lost. I have had to send copies of things to them as they say they had it on file but it has been misplaced. These are my details!

Oh well, I'm stuck with them and they are one of the biggest firms going!

Thank you all

[MelanieGiles]

They will write the balance of the debt off, when you have paid the portion you promised to pay. That only seems fair.

Which firm are you actually with, and how did you come across them when looking at proposing an IVA?

[Brandon]

Thanks Carl
My re-payments total is over my total debt but they do charge a lot for their services. As I own a home, they also want me to remortgage that in year 4 which will give them even more money.

I feel dubious about all of this. I know I owe money and screwed up in the first place but I feel as if the penalty of an IVA is pretty high in terms of payback and length.

Oh, well. I made my bed - must sleep in it - ha ha

Thanks all!

[Lisa2009]

They advertise that they CAN write off a portion of your debt BUT funds permitting, you may end up paying most if not all of it.
It all depends on disposable income, the higher it is, the more you have to pay.

Oh and hi and welcome xx

[Adam Davies]

Hi
You owe the full debt,less any dividends paid by your IP,until the end of your IVA.This way any windfall that you receive can be used to pay off your full original debt,also if your circumstances improve you can deliver a higher dividend than was first proposed
Regards

[kallis3]

Hi Brandon and a belated welcome from me as well.

Your remortage in year 4 is a standard clause in every IVA now when you owe your own home.

You may also find that if you cannot get a remortgage your IVA will continue for a further 12 months.

[Brandon]

Hi All
Thanks for the information.
I am with Debt Free Direct. I was a bit lost with the 'write off' part. I went with DFD as they seemed to be the largest and were very helpful when I fist called.
I was under the assumption that some creditors will allow you to pay off a large portion and will write some of it off. Once this was done, a final amount that I owe would form my IVA. I have a grand total of all the debt that I am paying off so that is why I was wondering if anything ever gets written off.

I can't see any windfalls in the next few years. I'll keep playing the lottery just in case.

Has anyone had to remortgage their home and give the money over towards their IVA? Did this reduce your monthly repayments? Is there any chance that you can do this earlier in your IVA to reduce your payment?

Thanks again for the advice and the warm welcome.

[kallis3]

Hi Brandon,

I doubt very much if you would be allowed to remortgage any earlier. Even when you remortgage, it will not reduce your payments.

The money you pay across during your iva will be distributed between your creditors and some will pay your IP's fees. The money your creditors accept will be less than the total amount owed. This is the portion that will be written off.

Occasionally, if you have a large sum of money (i.e from a remortgage or the sale of a house), you can offer this as a full and final settlement of your debt. If it is accepted then the remainder of the debt is written off and the IVA satisfied. They are not always accepted though.

Hope that makes sense, but I am sure someone will put me right if I am wrong!

[Viki.W]

Hey Brandon, I think if you wanted to remortgage early that would just go to the IVA but you would still have to pay your monthly payments. The most you will ever pay back is the original full amount of the debt plus interest plus IP fees. If that is what you are paying then I think that is because your disposable income allows for this. Hang in there for an expert, X

[MelanieGiles]

Hi Brandon

It is a little concerning that you appear to have entered into an important agreement with your creditors without fully understanding some of the key aspects of the arrangement. It might be sensible to try and arrange to meet your IP to go through the proposal again, so that you can be fully assured of the effects of this on you, and what you are required to do until the end of the IVA.

[joh71262]

I'm a bit confused now.

I thought that the equity release clause was to clear the final balance or of much of it as possible. From the responses I see on here, it looks as though they expect you to remortgage AND continue with the repayments.

Surely that's not the case ? Where on earth would you be expected to find the extra money for that ??

I wouldn't mind remortgaging as long as it paid off the rest of the debt or an acceptable proportion of it, but not to pay BOTH on one income (with bills rising).

The ads really do get you when you're in the disaster zone don't they ?

[V]