Do you actually have debt written off?

[MelanieGiles]

To Chris

Please remember that it was you who signed your IVA proposal and therefore you who agreed to the terms.

The actual reason that most IVAs get accepted is that debtors make proposals to creditors, which creditors then decide to accept or not. The terms of the agreement are clearly laid out in black and white, and if you have misunderstood your own proposals then you ought to take some responsibility for this.

Can I suggest that you now arrange a face to face meeting with your IP to fully understand the commitments you have made and to discuss how you will be able to honour them. Andy has already given you some useful pointers which should help.

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

[confusedchris]

To Andy& Melanie

The answer to your question 'Was the equity release EXPLAINED?' depends on who you ask

1 The Expert/IP in this case Debtmatters (DM) would insist "YES"
2 The Newbies (Us Mr & Mrs Below Average) would have to admit "No" otherwise how do you explain my concern now after the 12 month review process
You may recall, Andy, this all came to light because of a MOD5 - Debtmatters insist that the MOD5 Additional Income means any pay rise irrespective of any increase in expenditure, that immediately rang alarm bells

Without going over too much old ground but for the benefit of Melanie who perhaps didn't see my previous posting - my gripe with this logic is as follows:
We could have a £100 per month pay rise, Our mortgage could go up by £100 per month, under DM's MOD5 rule we would be expected to pay £50 of the £100 pay rise (50%)into the IVA thus leaving us with a £50 payrise but an increase of £100 pm Mortgage, now to me this is IVA suicide and logically wrong. But DM claim they're right..IP says: "MOD5 we explained it and you signed it!"

So was that twisted logic explained to me before I signed "NO" did I sign to accept the MOD5 "YES" "why?" "Because I understood additional Income to mean Additional RESIDUAL Income..this is a fair assumption/understanding considering the whole IVA process is based on Residual Income.

I believe this goes some way to explain the problem with Melanie's comment "You signed it" yes we did but it's possible we agreed to something that was not explained fully or misinterpreted...
...so others beware of the "75% of your debts written off" sales pitch it ain't that simple


Chris

[MelanieGiles]

Your IP has an element of discretion and common sense in policing this modification, and I peronally would never insist on a £50 increase when your mortgage payments have gone up £100, and more importantly I do not believe the creditor(s) who proposed this modification would either.

I do not believe that these are grounds to fail your IVA, but if you can post the exact wording of Mod5, along with the creditor(s) who actually proposed it, perhaps I can advise further.

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
I can understand your frustration
Your IP should have allowed for any increased expenditure,that is beyond your control,before requesting the additional monies.
I think that you have the classic problem where you are dealing with a large company and often have a case worker reviewing the figures and taking the rules and regulations to the letter.Common sense seems to have left your particular contact.
You must speak directly with your IP and get this situation sorted.
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

[confusedchris]

Thanks Both

[spenmotherhen]

Thanks cattulus for your advise, I am hoping to take a part time job to help raise the cash for the arrears then look into arranging a fixed rate mortgage to cover my IVA for the remaining duration.

Raya I am ceratainly not looking for an excuse not to repay my debts and I certainly do have a moral to repay them. I am simply asking a question with regards to being sold the "75% debt write off and debt free in 5 years" which obviously isn't the case.

If I did not intend to repay any of my debts surely I would not of gone down the route of an IVA in the first place.

Sorry if I have misinterpreted your reply but it comes across that you have assumed I am intending to avoid paying back as much as I can afford, rather than simply questioning a sales pitch (75% of debt written off) which does'nt fully explain its intentions.

Confusedchris although I don't fully understand your position I do sympathize with your understanding of the 75% debt written off and debt free in 5 years. This isn't the case in alot of IVA's it would appear. Perhaps that is what atracts desperate people to these companies. I to understood that this would happen, when actually it isn't realism in my case.

[catullus]

Hello spenmotherhen

Perhaps I misunderstood the purpose of your post. Do you feel that, with the knowledge that you now have,you wouldn't have gone in to an IVA and, if so, what do you think that you would have preferred to do?

[spenmotherhen]

NOt at all I think I was at the stage where I needed to take control of my debt and an IVA was able to help me do that.

I am more than happy that my creditors have allowed me to do this in a managable way and also to be repaying my debt.

My misunderstanding was purely why do IVA companies advertise debt free in 60 months and up to 75% of your debt written off, when actually this isn't the case.

I was led to believe this would happen in my IVA but didn't fully understand the 4th year clause - I still don't fully understand.

I agree that it is understandable releasing the equity in the 4th year but I am concerned about having the increase in my monthly mortgage payments.

However at this stage if my equity release completes my IVA, then I guess I will be no worse off as I will no longer be making my monthly contributions.

Still a bit baffled

Thanks for your replies

[MelanieGiles]

The quote "debt free and up to 75% of your debtor written off" is not necessarily misleading, as in reality this is what can happen - however I take your point that you will still have to service an increased mortgage for longer than this period.

Your new monthly mortgage payments should be no more than you were paying to your IVA, and for current IVAs this is generally being limited to 60% of the IVA contributions.

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

[spenmotherhen]

Hi Melanie

Sorry to keep you up!!

Thanks for your info. I'm not to sure about my monthly payments being more than my montly mortgage payments as at present I am paying £651 mortgage and £440 IVA contribution, does this mean that I will be paying a max of £1901 a month? once my equity has been released and my IVA settled? or am I being totally dence here?

Thanks very much for your help

[spenmotherhen]

Sorry a slight error I meant to type £1091 - ITs late lol!

[confusedchris]

Hi Spen

I'm assured..not quite the right word...that you too are concerned about the 75% sales spin & the 4th year remortgage clause, that seems to sneak in after the sales pitch has hooked you, (yes, I know Melanie I signed it) as I was beginning to think it was me be irrational.

Perhaps the experts on the Forum could give an example where the 75% gets written off as in my, albeit limited, experience when someone pays an IVA of 25p in the £, which I believe is the minimum guide for acceptance, over 5 years they would have paid 25% of the debt back in monthly repayments. To then go on and release equity by remortgaging seems to be a)Creating more debt potentially at a higher interest rate to previous mortgage (difficult cases syndrome), b)Increase Monthly outgoings & c)Extend the period of debt to possibly 25 years.

I am also at the moment being bombarded with mailshots from other 'Debt-Experts' implying that an IVA may not have been the right thing to have done (potentially mis-sold)..has anyone responded to any of these types of mailshot and to what result?

I know my postings sometimes sound like the rantings of a mad man, but to back up my theories, back in the late 70's Financial Institutions started telling us all that Endowment Mortgages where the best thing and the way forward only to later retract that position, then again in the late 80's it was the common practice for Financial Institutions to advise everyone to 'Opt-Out' of the State Pension, "because there won't be enough money in the State Pension Fund"...only for some to find that the Pension Plan they're currently in isn't performing either and therefore that too will fall short of expectations

My point: We have to be careful that the IVA Bandwagon isn't the same as the Endowment/Opt Out Bandwagon i.e. A means for those with money to make money out of those without it.....my concern is that history (our <s>living</s> existing history) may prove it to be.

Chris

[spenmotherhen]

Hi Chris, not totally sure but I think the 75% thing will only be a true statement if you don't have a property to release the equity in the 4th year clause, as there is no future income to offer the creditors. The way I understood this avertisising was that regardless of your financial situation you would be debt free within 60 months or less in some cases (which i would agree) and also 75% of your debt would be written off.

Please do not think for those of you reading this thread, that I am feeling hard done by for not receiving the 75% off of my debt, I am more than happy to repay my debt in full, afterall I got myself into this position. I am purely a little mislead/confused as to why I was told this but in reality this is not an accurate statement.

We were mis-sold an endowment but I must admit I do not feel I have been mis-sold my IVA, probably just a lack of understanding on my behalf or mis-interpreting the technical jargon?

[MelanieGiles]

The reason for the "up to 75% claim", is that creditors through custom and practice have settled at a minimum 25p in the £ return. So that claim can be factual, if a person's circumstances dictate that this is all they can afford to repay. This does not mean that IP's will make an IVA fit just a 25p in the £ return - individual circumstances will dictate what will be repaid - and the maximum aim has to be 100p in the £ for monies borrowed.

I accept that some people may have misinterpreted this to read that they can get away with only repaying 25% of their debts, and this is why the Advertising Standards Agency have largely stopped this type of marketing.

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

[confusedchris]

Spen

Don't under sell yourself

In this situation it is the role of the 'Experts' to advise the 'Non Experts'(that's why they get a fee)

True we all got ourselves into the mess no-one made us apply for credit but that does not excuse the misleading way of some IVA Companies, probably those with a large number of telephone staff.

If like me you were under the impreesion that all you ever paid into an IVA was the monthly payments and if you were unable to remortgage nothing else would be paid after 5 years then that's two of us that' have never met' have never communicated before, that have got the same impression....

...and therefore that cannot be our fault

We are not alone...I'm sure!

Let us know readers