Failed IVA...where now??

[Darkest hour]

My wife and I had the news today that our IVA proposal had failed in the creditors meeting.

This was due to Northern Rock apparently adopting a "no IVA" status, even though our IP thought that with us offering 48p in the pound we stood a very good chance on acceptance!

We're now really worried about what happens next, due to our IVA advisor telling us to cancel all payments to our creditors.

I assume we're back to square one with less options, more debt and excess interest charges?

Can anyone offer a light at the end of this????

Thanks in advance

Darren

[aguise]

Hi there
Not a good day for you. Do you own your own property? is bankcrupcy an option. There is always a way, you just have not found it yet. Others will be along to advise. Northern Rock are a problem it seems for a lot of people at the moment, be patient.

Ang

[Darkest hour]

Yes we own our property, but obviously we'd really like to keep it.... is this an option with going bankrupt?

Regards

[aguise]

Hi again
If you can give some more detail on how much equity you have in your home and what your disposable income is someone will be along to advise.I think You would lose your home in bankrupcy, most go in to rented property, but reading some of the other posts it sometimes is a relief. I think jane has just done this and likes her new home. Wait a while and one of the experts like Melanie will come with some advise.

Ang

[MelanieGiles]

Hi Darkest Hour

Sorry to hear that Northern Rock have rejected your proposals. I wonder what their specific reasons are for this, and can assure you that they definately do not have a "no IVA" policy at the moment.

I deal with Northern Rock regularly, and they tell me that all they expect to see if the very best proposal possible put in front of them. They like a return of at least half the money they gave lent, but will consider lower offers if they feel that their customers have exerted every effort to deal with their debt situation in a responsible manner.

Can you tell me the basis of your IVA proposal - ie how much were you to pay each month, what were the total debts, IP fees and current equity in your property. Which IP did you use, and how was the equity to be addressed within the proposal - ie did you offer an equity release at the end of the arrangement?

With regard to saving your property in bankruptcy, that depends upon the amount of equity you have and whether you have friends or family who would be in a position to acquire this from your Trustee.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Darkest hour]

Hi Melanie,

We were offering 38 x £350 and then 22 x £550, this was after HP was completed on a car.

The total debt was £96k of which £40k was to northern rock.

IP fees, sorry can't remember.

Current equity in our property is £50k confirmed by estate agents.


Thanks in advance

Finally...yes we were offering £19k release in the final year.

[MelanieGiles]

Therein lies the problem!

You were offering to put in £19,000 in lieu of equity totalling £50,000. Under bankruptcy proceedings, assuming that you were both proposing IVA's, a sum in excess of £60,000 would be available, yet you were offering £44,000. Not a good deal for the creditors - even at 48p in the £!

Also, given that Northern Rock have debts of £40,000, and you have now declared equity of £50,000, they may see their chances of getting paid are far better by seeking a quick charging order against the property. In which case they will require you to make repayments at a similar rate to your contractual obligations, and if you default on this perhaps revert to possession and sale proceedings. Providing you maintain these payments, Northern Rock will be repaid in full which you cannot blame them for wanting.

I do not feel that you have been appropriately advised, but if you could let me know the basis for the £19,000 offer, when house prices are rising on average of 7% per annum, then perhaps I can understand a little better. Which IP put this forward for you?

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Darkest hour]

Thanks for the reply Melanie,

The basis of the equity I believe was with the IP not taking in to consideration our estate agents valuation, which we included with all of our correspondance.

I'm not sure it's pertanant, to name the IP at this stage as they are active on this forum.

Is it worth changing IP's and re-drafting a second proposal?

And yes we've already parted with a considerable sum to initiate proceeding thus far!!!!!

Regards

[MelanieGiles]

You could try a representation, but will need to improve upon the offer especially in terms of the property equity. Why on earth did the IP not use the valuation you had provided, which was carried out professionally. This may just have scuppered your chances.

A new IP will want to speak with Northern Rock directly, to discuss strategy in advance of a revised proposal being issued so do choose one who has an ongoing relationship and contacts within this organisation.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ordinary_world]

Hi Melanie,
Just out of curiosity, are there any limits associated with representation e.g. time before a representation, number of allowable representation, nature of differences between representations etc?

Also, do IP's charge for each presentation?

Best

OW

- 'I wont cry for yesterday 'cause there's an ordinary world somehow I have to find...'

[MelanieGiles]

Hi OW

The representation of IVA proposals was unheard of two years ago but is rapidly becoming a trend which I personally hate. If an IP cannot get it right the first time, then they have not done their job properly, and this constantly increasing stream of represented proposals is irritating the creditors and you can understand why.

There is no legislation or caselaw with regard to represented proposals - in my career I have only ever represented a proposal once, when the bank quite genuinely lost the client's papers and wanted more time to consider matters. Some IP's charge extra fees, others do not.


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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[tracy.h]

hI Melanie
I asked this question last week about representing my iva would creditors not get irratated as my former ip should have put forward a better proposal.You said it would make no difference ,is this because i will be getting a new ip to represent me,as this will be my 3rd proposed iva,i find the last post a bit of a concern.
Regards
Tracy

[MelanieGiles]

Tracy

My point above was referring to IP's who represent their own proposals time after time. There is no problem if you go to another IP, who has a differing view about the way the original IVA was presented - but obviously if it is then not accepted in my opinion there is no point in trying again.

In your own case (and I did not know you have tried twice before!) your circumstances have changed allowing you to make a much better proposal.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[tracy.h]

What i meant was my ip presented it twice,not a different firm,and i am now jst waiting for nr to change mortgage over so that my proposal is as you say more viable,do i then contact Tina again,or will she contact me,as she did say she would,im feeling much more cofident about it all now.
Thanks
Tracy

[MelanieGiles]

Tracy

Are you sure that you previous IP presented twice - or was the meeting simply not just adjourned? We can discuss this off-line. Please contact Tina as soon as Northern Rock have adjusted your mortgage.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk