concern about situation with my sister and my car

[alyson.h]

I owe about £10,000 for loan repayments and bank overdraft/cahrges. I also owe my sister £7,000 as she loaned me that amount to purchase a car. In December 2005 I took out an IVA with Ideal Debt Solutions (IDS) with 10 monthly payments of £390 then increasing to £690. I got into arrears from around June 2006 and lost my job in January 2007 but luckily I managed to secure a permanent job a month later. IDS carried out a financial review and increased my monthly payments to £891,but I could not maintain this and began to make payments of £700. IDS were not happy with this and continued to ask me to increase my payments.

Every now and then I get telephone calls from my sister chasing payment which is totally understandable and I feel really bad for messing her around like this as she approached me and offered to loan me the money in the first place.

I contacted IDS in September 2007 to advise that I have been continually struggling to maintain their requested payments and was again requesting to make a lower payment as that weekend I had to pay over £300 for car servicing and maintenance and that was before any other monthly outgoings.

Again this was rejected and said based on my wages I could pay them £755 per month. They said if I do reduce my contributions they will submit a variation report to my creditors to extend the IVA by another 12 months but suggested the only alternative would be bankruptcy.

On 25th October 2007 I made a payment of £700, I got an email from them that same day thanking me for my payment but advised it was still not the agreed sum of now £791. They said I am not taking steps to bring my arrears back in line so they are now issuing me with a Notice of Breach giving me 28 days to bring my arrears up to date or make arrangements to rectify the problem.

My credit rating has been rock bottom for many years and I am fine with that.

My only concern is the situation with my sister and my car what will happen?

I'm sorry it is so long but look forward to hearing from you soon.

Kind regards

[MelanieGiles]

Hi Alyson and welcome to the forum

It sounds to me as if this IVA is going nowhere and that you would be better off seeing it come to a conclusion. Once it has finalised, assuming that your IP does not intend to petition for your bankruptcy, you need to consider the options available to you - ie entering into a Debt Management Programme or even petitioning for your bankruptcy yourself. If you choose the latter route, you may lose your car and your sister's debt will be written off.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi
How much were your total debts going into the IVA ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[alyson.h]

Hi Andy

Sorry, I got myself all mixed up and told you the incorrect figure. My actual debts are about £12,000 INCLUDING the £7,000 that is owed to my sister.

thanks

[Adam Davies]

Hi
£12,000 of debts ?How are you in an IVA and paying over £800 per month ?
Can you post a list of all your debts going into your IVA.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[alyson.h]

Credit balances at 29 December 2005

First Credit Management - About £1,725.00
Citifinancial Europe - £3,410.88
NCO Financial Services (Capital One) - £260.00
Welcome Finance - About £2,067.33
Moorcroft Debt Recovery - About £1,919.14
Halifax - £100.00
Abbey - £1,902.01

I asked IDS many times when they were going to start making paymetns and they said that once they'd collected half of the monies from me then they would commence payments.

[MelanieGiles]

This case is bizarre! Can you confirm the amount of payments you were to make over the term of the IVA, and the timescale the arrangement was set to run over. I assume that you were going to pay creditors in full?

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[alyson.h]

9 payments of £390 and 31 payments of £640 realising a fund of £23,350.

And yes I wanted to pay my creditors in full

[MelanieGiles]

I am sorry but the other day we were talking about mis-selling of IVAs on this site, and your case appears to be a classic example - but for the life of me I cannot understand why your creditors would have accepted an offer based upon debts of £11k with contributions of £23k.

Was this your idea, or were you coerced into an IVA by the IP acting for you?

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[alyson.h]

I was misadvised and assured that this was the best thing for me to do regarding my situation

[MelanieGiles]

Whilst I only have very brief details of your case, Alyson, I am afraid that I cannot agree with the advice you were given. Just my opinion, but you would struggle to get an IVA accepted on this basis these days.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[alyson.h]

I thank you very much for your advice thus far, what do you recommend my next step should be - debt management plan?

[MelanieGiles]

Personally, and given that their fees appear to be excessive, I would suggest that you talk to them about the advice that you were originally given and see if they will be prepared to reduce their fees so that the payments you are currently making will return the amount you originally pledged to creditors. You may also wish to mention that you are considering taking a second opinion as to the nature of the advice you were originally given. I am not clear as to whether your sister's debt was included in the IVA. Could you clarify this point please.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[alyson.h]

As I provided IDS with details of all of my monthly outgoings they added my sister as a creditor.

[MelanieGiles]

OK - so you have debts of actually more like £18k and will be paying in £23k. That is no so bad, but still means that you are paying your debts largely in full. What was the proposed dividend quoted to your creditors?

If you feel that the IVA is no longer the right solution for you, due to affordability, you could ask your IP to seek a reduction of payments via a variation meeting, or simply default on your IVA payments forcing your IP to close your case. Be careful, however, that this does not lead to bankruptcy proceedings being taken against you.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp