final year of a 5 year IVA

[tracy89]

Please could you advise? We arein the final year of a 5 year IVA and have had to dip into the amount we have been saving so will be short. We had to pay for my Mum's funeral and I also went on maternity leave for 9 months so had a reduced income and had to use the saved money. We need ten thousand to clear our IVA in November 09. We need to know if we would be able to obtain a loan for this amount or not? My husband's maintenance of 250 pound per month ceases in august so we would be able to afford this. If not please advise our best options. Many thanks.

[MelanieGiles]

Hi there and welcome to the foruk

So sorry to hear about your Mum. Having lost a much loved parent I know just how you must be feeling.

I am a little unclear when you say you are in an IVA but have had to dip into savings. Where was the £10k due in November 2009 going to be coming from?

[tracy89]

We are with a company called Spectrum and we pay 30 pounds per month to them which they pass on to our creditors and we save 165 pounds per month over 5 years to accumulate 10000 for our full and final payments. Due to unforeseen circumstances we have had to use some of this money so will have a shortfall. We wondered what our best option is ie to perhaps extend the life of the IVA (if this is possible) or obtain a secured loan (there is equity in our home). Any advice would be welcome. Thanks

[MelanieGiles]

What a very curious arrangement! Are you sure you are in an IVA, and what is the logic of them saving up the money to pay over 5 years, when they could be paying it to creditors as you go along? Surely this cannot be right?

[tracy89]

Well yes it is an IVA as far as we aware! Spectrum pay 1 pound to each of our creditors eac month and at the end of the 5 years we are to have saved almost 10k which will then be apportioned in full and final settlements to each of our creditors. What do you suggest we should do? We are wondering now if it is a legitimate arrangement. I think another name for the company is Baines and Ernst if that makes any more sense regarding this arrangement?

[Michael Peoples]

I have heard of this type of thing before where you pay token payments for 5 years and then creditors will accept a settlement. The debts have normally been sold as creditors do not want to accept £1 per month forever and the new owners then settle. This is not an IVA and a check on the insolvency register would show this. Speak to an IP for confirmation.

[Michael Peoples]

Hi Tracy. Our posts crossed but it sounds like what I was talking about. However, I do not believe this company is Baines and Ernst but I am sure their representative could confirm this.

[tracy89]

Thanks for your help! We get a statement every month showing payments made and the company is 'Spectrum Financial Protection'. So if it isn't an IVA what sort of thing is it and should we be worried? We have always been told it is an IVA. How are we bound by it and also sorry to appear naive but what it is an IP? for us to contact. Thanks again.

[size5]

Oh dear.

This is debt advice at its worst.

I stand to be corrected, but I have seen this too many times. A high pressure sales person comes round to the house of the debtor, who is naturally panicking, and collects 1 to 3 months payments, equivalent to disposable income. So, if disposable income is £400, for example, typically £1200 is paid over, possibly of course in instalments.

The debtor then pays next to nothing on a monthly basis and is encouraged to save his/her £400 to try and fund full and final settlements of the debt after a few years.

Spectrum, who actually no longer exist but who trade under another name with exactly the same methods (as far as I am aware, except if a case is IVA in which case they will give proper, ethical advice) grow fat on the profits.

The debtor may pay, for example, £50 on a monthly basis. Spectrum, or their new equivalent, trouser £30 as a fee and the creditors get next to nothing. Result? Court action, charging orders etc. In the meantime the client, who in this example can afford £400, doesn't save the money to fund full and finals as the necessary discipline to do so has not been instilled.

They should be shut down as they are nothing more than crooks, I am also happy to challenge these practices as corrupt on a public forum if they wish to litigate.

Scandalous, and I feel sorry for the poster who is the latest in a long line of people who have been ripped off.

Regards.

[Michael Peoples]

http://www.insolvency.gov.uk/bankruptcy ... search.htm

Hi Tracy. This link will show you if you are in an IVA and I will make a small wager that your names are not on it. If you own a property you should have a land registry search carried out against it to see what charges have been made against it. I can only agree with Size5 100%.

An IP is an insolvency practitioner who legally is the only person who can prepare an IVA. There are a number on this forum who will give free advice and there are many links.

[MelanieGiles]

This is an appalling method of debt repayment - and I thought I knew this industry back to front, but clearly I still have a lot to learn. How can they get away with it, and isn't it about time the OFT got looking at various firms CCLs.

Am sure that David will have something to say about this!

[size5]

Make that an extremely large wager Michael, absolute knocking bet!! By the way, we should all be tucked up, it is half past one after all!!

Regards.

[Michael Peoples]

Too right. I only came on for a quick look after picking my football bet for tomorrow but some of the posts needed answered urgently. If I had known you and Melanie were still about I would have gone to bed.

[size5]

Any tips?

Regards.

[David Mond]

What an appauling situation. I understand that Spectrum have ceased taking on new cases and their "old book" is being run down for them by another organsation. I would be interested in seeing the paperwork that Tracy89 signed up for and details of all statements received and amouts paid over. You can get my address by clicking on my Avatar on the left.