Help please re: my IVA

[nathan.s]

Morning all

I have just found this forum and am hence new so apologies that i am most probably repeating other peoples posts and worries.

I am writing to get some more information regarding my situation which i am struggling to come to terms with at th moment.

My situation in brief is:
I had debts of approx £65k and couldn't afford to pay them so spoke to someone at debtmatters 18 months ago and set up an IVA which i was paying £375 p/m for 5 years (£18,750) which i believed i could afford. I am also a home owner and this payment and my mortgage was to much soi asked if it would be posible for a reduction in contribution. They were happy to oblige and came back with a variation so that i would now be paying £300 p/m but my agreement would be for an additional 12 months. The costs for this variation were over £2k which i thought were excessive especially for someone in my position but i felt i had no choice but to accept.

I have been aying into this IVA for 18 months now and as i mentioned easlier i am a homeowner and live alone so it hs been very ight for me for this period and recently i have ben falling behind with my payments. I received a letter from Debtmatters telling me my account has fallen into breach position. I acted on this letter almost immediately and brought my account right back up to date.
AS few days later i received a letter telling me my account had been requested to be terminated by my creditors. I rang debtmatters back and said that my account is bang up to date but they told me the only thing i can do is another variation which again will add another 9 months onto my agreement hence paying and addition £2100 in fees, so if this goes throuhg in the last 12 months i would of had 2 variations totalling almost £5k in additional costs.

I feel like i dont know what top do?.

I spoke with debtmatters and asked why are the charges so much and they told me that everytime they do a vriation they add there costs and 10% of the total repayable for some of my creditors that did not vote in the termination. They also told me that as it stands i am paying the minimum to my creditors of 20p in the £1 which i find astonishing because 20p in the pound of £65k is £13k when now after this variation i would be paying back £300 p/m x 81 = £24,300 hence over £11k in costs to debtmatters. Is this right? is there anything i can do but accept the variation again and continue to plumet more in debt again?.

My house is not in the agreement and i have perhaps £10k of equity in this. I spoke with them again recently and proposed that if i realise my equity potention and offer this in full and final payment would that be sufficient?.
So the offer i would be proposing would be:
£3,800 i have already paid and £10,000 equity.

WHen i asked this they said that ay be acceptable BUT if i wantto propose it and it is not accepted then i WILL still have to pay the costs of a variation which i have seen in the past is at least £2k and i simply cant affprd that.

My questions regarding this are:
In an experienced opinion would £13,800 be enough realistically to provide full and final payment for an IVA agreement that was originally £18,750 but with the additional costs now i am paying in total £24,100???. What would be a more realistic offer???.

If i do propose this who do i need to speak to with regards my equity release due to the fact i am involved in an IVA??

Hugey greatful for any feedback and comments on my situation.
Thankyou
Nick

[Adam Davies]

Hi Nick
On the info that you have supplied I don't think that you have been treated unreasonably by debtmatters and the fees that they have charged are fairly standard if not a little high.I can't understand why the creditors wanted to terminate your agreement if you brought it upto date within the breach notice.What will another variation ask for ?
With regard to your equity I doubt if it will be enough however if you could offer around 15k then I'm sure that it will be accepted.As you only have 10k of equity the only way that you could release it would be to sell up,therefore I would suggest sticking with your repayments but you need to clear up the need for a further variation with your IP

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

[nathan.s]

Thanks for the advise.

Would the only way to realise my equity be to sell up? could i not remortgage the full cost of the property?.

I asked mi IP why there is a need for another variation and they told me that htere was a cross over of me paying the arrears and my case going to my creditors. As it stands now, my case arrears are fully up to date but my IP says i have still got to do a variation as my creditors have asked for my IVA to fail.
I believe my creditors are not aware that my account is up to date and they believe i am still in breach of my agreement.

I obviously want to keep this agreement running but do not know like yourself why i have to go through anothher variation. But what can i do if when i speak to my IP they say i have no choice but to do this???

Thanks again

[sonyse2t5]

This is the first time I have heard on this forum that fees are charged in variations. Was it ever in the small print of your IVA contract? It is only right like a credit agreement everything is spelled out. I can't even find that in mine??

[nathan.s]

I have all the paper work at home up north but i am working in London at the moment and wont be back till December so i cant prove this but my IP tells me that it is written in the small print of my agreement.

Apparently whenever a variation is made they have to add on 10% of the total repayable cost of the IVA due to creditors who have not voted when the agreement was set up.

[sonyse2t5]

Thanks Nathan,
Perhaps the resident IPs - Mel and Catullus on this forum can confirm??

[nathan.s]

Thanks for that. I only joined the forum yesterday do you know the best way for me to contact them to get an answer???

Cheers

[sonyse2t5]

No need to contact them directly,they read these pages daily, Mel and Cat tends to post late at night.So tune in later.

[insol]

Hi Nathan,

the costs of a your variation sound astonishing, in some iva's creditors peg back the costs of variation meetings however i note that debtmatters don't refer to them in their iva proposals, perhaps double checking the chairman's report to see if anything is mentioned. it's fairly common for creditors to request an extension of an arrangement to compensate them for the reduced payments and the cost of the variation. with regard to the 2nd variation if you brought the arrears up to date before the expiration of the default notice then you don't need another variation meeting because you're still fully complying with the terms of the IVA that's the whole reason for putting in the 2 or 3 payments default period because who knows what will happen over a period of 60 odd months. you can offer a full and final settlement which creditors may or may not accept if you're offering a similar amount to that which creditor's would've received over the course of the arrangment then they probably would. about remortgaging Mrs Giles or perhaps some of the other forum members will be better off advising you of the prospects of getting a 100% mortgage whilst subject to an IVA.

[Adam Davies]

Hi
Zero chance of a 100% mortgage I'm afraid so you need to concentrate on sorting your current IVA.
I would guess that you have bought the IVA upto date a few days too late and your IP needs another creditors meeting to update your creditors and ask them to overturn the previous decision.
It is quite normal for a fee to be charged for a variation meeting as there is alot of work involved,however I would have thought that 1k would cover it,however as we all know it is ultimately your creditors that pay this and they would have to agree to it.
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

[mikebdomain]

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[catullus]

Yes, it is fairly standard to charge for variations although I only charge £500. The reason for the charge is that a variation causes quite a bit more work and the charge should be clearly set out in the proposal, so not even hidden away in the small print.

Needless to say, the new fee structures effectively do away with this charge so we're asked to do it for free, now.

[Adam Davies]

Hi
I didn't know that Catullus.
IPs are going to be reluctant to put forward both variations for payment reductions and for full and finals if they have to stand the cost.
Where is your regulatory body on the TIX changes ?

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

[nathan.s]

Thanks.

What about the fact that i am told that everytime a variation is done i have to pay an aditional 10% of the original charge???

Is this right??

I have had one variation already which cost over £2000 in charges and now with this one it will again cost another £2000+. the reason they gave for the most part of the charge is the 10% added on?.

I am struggling to understand that part of the charge?

Thanks

[Adam Davies]

Hi
I have not come accross that before,hopefully Melanie or Catullus will be able to shed light on the 10% charge

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