HELP! - Advice required - What are our options?

[kitkat44444]

Sorry, this is quite long-winded!!

My husband and I started our IVA in Oct '06. He was unfortunately made redundant in Dec '06. I spoke to our IP who explained that the redundancy package was safe from IVA until he found another job which came as a great relief. Unfortunately, when we came to claim on our mortgage payment protection insurance we were told that the policy had lapsed 2 years ago and we were not covered which neither of us were aware of.

This means that the redundancy package of approx £6K is now all but gone, our mortgage rate has since gone up and the payment protection insurance on our secured loan is only paying out as of 1 month ago because my husband retrained on a part-time course but the benefit office stopped his claim for job-seekers allowance because he did more than 16 hours in his first week due to induction etc. The insurance company are therefore viewing his second JSA claim as the date unemployment began.

Have tried contacting my IP to ask if we could defer payment into IVA for 2-3 months to allow us to pay our mortgage but so far he has not responded. Do you think it is worth trying to negotiate with mortgage lenders or would they simply say it is our fault we are not covered?

We currently have enough money to last another six weeks. We really don't want to default on mortgage and lose the house and don't want to be declared bankrupt (pariculary as we were fine on IVA before circumstances changed beyond our control) Family and friends are unaware we are even in IVA!

Has anyone been in a similar situation or can offer any advice on our next move?

Kitkat44444

[Adam Davies]

Hi
You need to get an answer from your IP because I feel that you need to make sure that your mortgage is paid.How long do you think until your husband will be back to full time employment ?
I would have thought that under the circumstances your IP would allow a break from your IVA payments for say 6 months or until your husband can find work again [if this is sooner]
You also need to speak with your mortgage provider and let them know the situation.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[MelanieGiles]

That is good advice from Andy. Get your IP to propose a six-month payment break, thus extending the IVA by a further six months to give your husband some extra time to find alternative employment. As you are not yet in arrears with your IVA, you should be able to miss a couple of payments in any case.

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

[kitkat44444]

Thanks for the advice.

We have taken a month's payment break from the IVA and I have negotiated a payment plan for the next three months with our mortgage company who were really understanding.

Also managed to negotiate permanent lower monthly payments on utilities to try and make money stretch further so when my husband gets a job we can hopefully increase our IVA contribution.

Just proves if you don't ask you don't get!

Kitkat44444

[Adam Davies]

Hi
Thats good to hear,just shows that creditors can help if approached early enough.
I hope that your husband finds work soon.
Please keep this forum posted
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[keh]

Hi Kitkat,

Well done on getting it sorted with the mortgage and hope your husband soon finds work, and all the best for the future..

remember..

The long and winding road will straighten out eventually....keep the faith

[kitkat44444]

Hi, just thought I would update everyone on our situation (sorry it is quite lengthy again!). My husband has been offered a job from his first interview. It is approx 6K less than the job he was made redundant fromas he had to take a change in direction due to lack of similar jobs in area). In real terms it means that after all expenditure is taken out of our monthly income we are only left with £120 per month for IVA. He has already accepted the job to build up some office experience with a view to getting a better paid job. We are curently paying £275 per month into IVA for £24,000 of debt. (41.39 p in £).

I am terrified we are going to be forced into bankruptcy and lose our house as we have put so much effort into trying to meet our financial commitments. The main problem is that our mortgage when we joined the IVA was still on a fixed rate but when that ran out we went onto a tracker rate and of course we all know what has happened with the interest rate since then!! We only have approx 6K equity in home as we have a mortgage and secured loan on property.
The deal I made with the mortgage company was to pay £300 for 2 months (our usual monthly payment is £549). Following those two months (Sept) they are asking us to make contribution to cover this underpayment which we should have covered. (my mum is selling some shares off to give the proceeds to myself and my sisters - I should get approx £4K)

Has anyone got any suggestions/comments on how we might be best to go from here? I have been stewing on it so long I can't think straight anymore which I think fellow forum members can relate to!


Kitkat44444

[MelanieGiles]

Hi Kit Kat

My suggestion is to use your Mum's £4k to supplement the shortfall in IVA payments - at the rate of £155 per month this will last for two years, over which time I am sure that your finances will have improved. As soon as you can consolidate your existing mortgage and secured loan into one mortgage account, then I would look at this as a further way of saving money. You can then go interest only until the end of the IVA, at which time you will be able to make up any capital repayment loss from the savings you are making in not funding an IVA.

In your case, I feel it is all about careful ongoing cash management.

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

[kitkat44444]

Hi Melanie,

Thanks for responding so quickly. My main concern was that the money from mum was going to be taken to fund the IVA in addition to our continuing monthly payments. I was dubious about paying it into our bank account because I had assumed as it was a gift it would be deemed as extra funds towards our debts. Do you think it would be acceptable to pay this money into our account and use it to top up our shortfall? Also we were planning to use about £100 of it to make improvements to the garden to add more value to the property for when we come to release equity further down the line of the IVA. Would this also be acceptable? Sorry to ask so many questions but my IP is not particularly helpful in getting back to with advice.

Thanks again - it is a relief to talk to someone about it because my parents are not aware of our finnaical problems so my husband and I really only have each other to talk to about our situation. It helps to have an independent point of view.[:)]

Kitkat44444

[MelanieGiles]

Hi again

It is your mother's money, so it is not deemed to be a windfall. But do be careful if you drip feed it to the IP, that you are not tempted to spend it in the meantime. There is no problem in you handing the money to your IP in the meantime, with the strict instructions that it is a gift from your mother and paid to supplement your future IVA payments. This might be a safer route in the long term.

We are all happy to help on the forum, so ask away!

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

[kitkat44444]

Thank you Melanie.

We have discussed it and had already decided to open a side account to keep this money in so we didn't spend it. I will then set a standing order to transfer the top up to our current account each month.

We will put forward this propsal to our IP and see if he is in agreement.

Thanks again, it is a weight off our mind.

Kitkat44444

[Adam Davies]

Hi
Great advice from Melanie and fingers crossed that your husband will progress at work.You have to be very disciplined in an IVA and you certainly seem to be.
Good luck to both of you

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