Creditors who have bought debts right to add interest

[nigel710]

Hi, I'm attempting to get out of my IVA with a f&f proposal but a major creditor Watch Portfolio Management rejected the offer and failed to respond to a counter offer. This looks likely to jeopardise the proposal.
I read online that creditors who buy debts can only claim the full amount outstanding and cannot add interest. If so I could be tempted to fail the IVA and take the risk on other creditors choosing to add interest.
Bankruptcy would be extremely unlikely as the proposal clearly shows. The offer made was pretty good and accepted by all others. New offer was ignored.
Any advice please as I feel trapped by them. The IVA company fees are included monthly so should only be creditors to worry about. I might be better making my offers outside the IVA?

[Foggy]

They cannot add interest while you are in the IVA --- but, as soon as the IVA fails they can, and usually do, then add backdated interest at the contractual rate from the time that interest was frozen.

You cannot make offers outside the IVA and your IP should be pushing for a resolution to the revised offer by forcing a new vote.

[nigel710]

Hi Foggy there is a good offer on tge table that has been ignored. Proposal now adjourned again and after that I'm stuck in the IVA.
My question relates to creditors who buy debts. I appreciate that they have rights to the full amount owed but my research suggests that it may not permit them to add additional interest and charges. As this major creditor looks unlikely to compromise and seems to think me keeping in the IVA is best for them I'm looking at all options now. Other creditors accepted, interlocking iva with wife now over. I'm left to their mercy.
If I knew they were unable to add interest I may just fail the IVA as the proposal clearly shows bring made bankrupt would be very unlikely.
Could then deal with them directly. If they have ignored the adjourned proposal that has now been adjourned again there feels like no hope they will reconsider. It looks like a major creditor who bought my debt is refusing to let me buy my liberty back?

[nigel710]

Ok guys so for a very long standing forum on Iva's we seem to know absolutely nothing about what happens if your IVA fails? Surely is this true?
In an IVA we (certainly we were) are constantly threatened with bankruptcy and the wrath of creditors should it fail.
In reality I do wonder, I really do?
In my IVA which offers 98p in the pound I appear to have become trapped by a greedy creditor who is likely to have bought two of my debts. This puts them in power of my life (they think). Interlocking IVA now defunct, just me remaining. I'm now facing being expected to remain in the IVA after first f&f refused then 2nd adjournment offer refused. This creditor appears to be expecting full IVA amount despite current offer offering about 2k less than full IVA 4 years early! I have a couple of days to go before my f&f is deemed failed. Surely this is sheer madness? 4 years in the hope of an extra 2k overall means a few extra quid to this creditor. Hardly any debt forgiveness in this IVA but that seems to count for nothing. Modern day slavery comes to mind.
So if it fails I continue the IVA alone. If my wife keeps working it would hardly reduce my payments, we would be no better off despite paying thousands to get her out of her IVA.
If she gives up work my IVA then becomes almost unaffordable but they surely can't expect her to keep working and still be as poor?
May as well bring back the Workhouses!
In reality it looks like I will have to stay in IVA and put a new f&f in which again will take months. As we stand my payments will decrease so the next offer will seem even better despite not offering any more in real terms. If my wife gave up her job and who could blame her I would probably go to the minus 15% of original agreement. This would mean less needed for next f&f proposal. So for the sake of all this over next 3 to 4 months and going through the whole charade again for creditors to maybye get a lower offer why can't they see sense?
Coming back to my initial question. What if now my wife is out of IVA and half our equity is hers so surely protected? F&f proposal showed even with joint equity bankruptcy would be a terrible deal for creditors. Just what if I thought, stuff this. Failed the IVA and took the chance? I would be intending to then approach my main creditors with direct f&f offers and be tempted to wait until some came to me. Would I be hammered by piles of interest and hounded to the ends of the earth? or would I be more successful in dealing with my creditors considering the funds on offer for my IVA f&f are still with 3rd party and could be offered direct.
I'm not saying this is what I'm gonna do the scaremongering is far reaching. In reality I bet I'd need to go looking for my creditors before they looked for me.
With Covid, prisoners have been released early but not IVA prisoners. it seems the better the dividend your IVA provides creates a gaol for the debtor.
In reality I will most likely stay in the IVA, end up with lower household income thus lower IVA payments and go through the whole farce again. Achieve more with probably less at the next f&f in another few months time. Any thoughts or facts? I'm tired of the old self flagulation about repentance and needing to change. I can think of better therapy than this.

[Foggy]

I am a bit disappointed with your opening sentence, Nigel. Yes, we are a long standing and, I have to say, pretty popular IVA support forum. But, for the most part, we are only people. like you, who have gone through an IVA ourselves and share our experiences. To be fair, not many of us have gone through failure of our arrangements and so cannot comment from experience. We can only offer opinion and, yes, we often see the worst case scenario as we do not wish to lull someone into a step they might regret later by offering candy floss and unicorns.

It seems that you are at the mercy, as you put it, of a greedy debt purchaser --- they are out there and some are worse than the original creditor, but many are not. Let's face it, chasing bad debt is not the friendliest of occupations !

In my experience -- purely anecdotal -- when an IVA fails creditors are entitled to revert to the original credit agreement and recover ( or add) 'lost' interest and charges. As debt purchasers are bound to the terms agreed by the original creditor, I assume that they can do the same --- maybe I am wrong, but better to be prepared for the worse yet hope for the best.

I agree that you seem to be getting a rough deal here, but assure you that this is not always, nor indeed usually, the case with IVAs in general.

[MYLO20]

Hi Nigel,

I've just faced this very issue if I understand you correctly.

A company who fronted my creditors for my full and final refused a 3k offer (full amount if continued is £4080) I then increased this to £3500 and they came back on day 14 accepting £3760 (£4k really as they want to keep the payments iv made whilst this has been going on) they kept me hanging 10days without an answer!

I was surprised due to the climate...job losses etc...but it seems they're holding out for the full amount you'd pay in during the term.

I wish you well

[nigel710]

Hi thanks for the reply. So they actually came back with an offer themselves after again rejecting your 2nd offer? If so hope yet then. Being in this IVA is awful and I know there is just no way I could do another 4 years!
So they may come back offering say 6 months more in IVA regardless then it finishes automatically? No more reviews? Payments fixed at current as part of deal?
It just seems that a whole industry is building around people's misfortunes in IVA'a and the whole spirit of them has been lost. Nobody seems to follow protocol anymore. Our IVA's didn't even allow our household shopping bill to ever increase throughout the full 6 years. Sheer madness but we only found out after 1.5yrs!
Thanks, I feel some kindness in your reply that gives me hope

[nigel710]

Just read your reply again? I have been paying in since the offer was made and the two payments made were not accounted for in the actual proposal. So initially when they rejected 1st offer 48 payments left not the 50 they thought. As far as I'm aware this was pointed out to them but they refused my 2nd offer.
Regardless from what you say they may well come back with a last minute compromise? It's awful, can't sleep, stressed out. If I have to go through this all again i will make sure my GP is involved and include medical grounds on mental health next time

[Bexlou79]

Hi Nigel,

Unable to offer advice but we are about to make a F&F offer and Watch Portfolio have also bought a lot of our debts so curious to find out how this ended for you.

Hope it was a good outcome.

Becky