help.....is this normal???

[mustang]

Hi all,
I'll try and keep this brief!
I was advised by Byrom and Keeley to enter a DMP paying £400 a month.After two months they then advised an IVA and passed me on to Beesley and Co. They want me to start paying them the £400 a month and,as my main creditor is Northern Rock,want to keep the first two payments....is this usual ??
I have debts of £34500 and can afford the 400 a month.
Any advice on how to proceed would be appreciated,and is it worth trying for an IVA with Northern Rock the largest creditor?
Thanks in advance,
Steve

[jpj]

Hi Mustang,welcome to the forum.
Some IVA companies ask for money in advance, but I personally wouldnt pay it. Many companies dont so its worth looking at several IVA firms.
(Melaniegiles who posts on here is very knowledgeable!)
Northern Rock are renowned for turning down IVAs,hence why I wouldnt pay a penny up front in your circumstances.
Im sure some of the forum experts will be along soon to give you more advice.
regards
JPJ

[mustang]

Yes,I am dubious about paying even more up front....i've already paid 400 to Byrom and Keeley for their fees for the DMP,and they kept another 400 "to go towards the IVA".
I obviously know that these firms have to make money,but it sometimes seems they are more interested in making money from me than providing any help.
Steve

[Adam Davies]

Hi
Do NR hold more than 25% of your total unsecured debt and are you a home owner ?
Don't commit to anything just yet and good for you for questioning the advice that you have been given.
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

[mustang]

Hi Andy,
Thanks for the reply.
Unfortunately NR are about 45% of my total debt.
Yes,I'm a home owner.Bought about 5 months ago with my partner,and she put £40k into the house from the sale of her flat,so the first £40k of equity is hers.
Steve

[Adam Davies]

Hi Steve
You will need to take advice from several more companies before parting with any money.
My feeling is that NR will not agree to an IVA and I doubt that you will not find an IP to propose this with no upfront fees.
Has anyone advised you to wait for the SIVA to be introduced[Oct 08] or advised you that NR may go for a charging order on your property ?
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

[MelanieGiles]

Is the Northern Rock debt a Together product of just an unsecured loan? And why does the IP feel that your proposal will be acceptable to Northern Rock - who are still rejecting a large proportion of IVA proposals?

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

[catullus]

This is quite normal.

Byrom and Keeley are a small debt management company who have recommended a DMP to you.They will have asked you to agree to their terms and to make your first monthly payments to them (for their fees and to start the distribution of subsequent payments to your creditors).

If you've signed up you're now in the bag.

However, B&K know they could make more from your "account" if you are succesful in proposing an IVA because the IP will share their (larger) fee with them.

So, having got you in the bag (ie they can't lose)after two months they then refer you to an IP who will will now ask you to stop paying B&K and start paying them instead.What happens to this money depends on what the IP's terms are. Most will refund this money to you if you are unsuccesful in proposing an IVA but some quote a minimum fee and will use this money to pay this, even if your IVA is not approved.

Of course, in this whole process you could have been referred immediately to the IP without making any payments to B&K, but then B&K wouldn't be guaranteed a fee, would they? And that's how the debt management industry works.

Now that you are actually talking to an IP you have to ask him/her what their actual experience is of getting IVA's approved where Northern Rock is the major creditor and listen very carefully to the answer.You should also ask the IP to confirm they have a fee structure of no iva, no fee.

As for NR, they are a very difficult creditor to deal with but I have noticed a slight change in their policy recently.Whether that policy is the same where they are the major creditor, I don't yet know.

Best of luck, what ever you decide to do.

[MelanieGiles]

In light of this information - I suggest that you ask the debt management company for your money back as well and look elsewhere? Also ask them to be definitive as to the reason why they have changed their minds. So far as I am aware, there has neen no change in policy at Northern Rock.

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

[mustang]

Thanks very much for all the replies,
I have stopped paying Byrom and Keeley but have not started paying the IP yet,nor have I signed anything with them.
They did say that there was a chance Northern Rock would accept an IVA if they got 42p in the £ or over.
I've never heard of the SIVA in Oct 08....what is this please?

Steve

[MelanieGiles]

It is a new type of IVA which is due to be introduced next year, which reduces the voting majority down from 75% to 50%.

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

[Andrew Graveson]

Just thinking about catullus's quote:

"Of course, in this whole process you could have been referred immediately to the IP without making any payments to B&K, but then B&K wouldn't be guaranteed a fee, would they? And that's how the debt management industry works".

Not all debt management companies work that way.

I trust catullus will be as quick to accept the same broad-brush criticism of the insolvency industry if/when the practices of some fellow IP's are found to be less than perfect?





Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[MelanieGiles]

It's rotten for all of us when a few bad apples affect the whole basket!

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

[Andrew Graveson]

Agreed.

I'm not sure the media will particularly discriminate between insolvency and debt management businesses if some of the reported investigations into mis-selling dig up some examples.

Unless you've been part of the industry or have been personally touched by debt I'm sure most people would not be aware that there is a difference.

Without that awareness the pointing of fingers between those in the industry will cause damage to all involved, and more importantly, risk alarming and undermining trust amongst those needing help with debt.



Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[catullus]

Andrew

What in my post do you actually disagree with?