I am in the last 10 months of my IVA and will have been paying for 6yrs (the initial term was 5yrs but I had a reduction in my salary which meant that I had a 1yr extention so that the end amount was the same). I have been contacted by a specialist referred to me by DFD (my IP) who has advised me to take out a secured loan of £15,000 over 10yrs to pay off my existing amount early - on looking at the timespan and the repayment amount this would come to around £28,000 over the 10yrs which to me sounds extreme (£13,000 interest). The initial figures submitted to court in 2008 were Unsecured Debts of approx £56,000 and a payment plan over 5/6yr coming to approx £46000. To me this appeared to be a release of any possible equity upto £10,000. I was told by DFD that there would indeed be upto £10,000 to repay to creditors but also there would be £10,000 to pay in IVA fee's. I was led to believe that the IVA fee's came out of the repayments that I have been paying for the past 5yrs. The costs seem to be raising with neither the specialist or DFD providing me with any actual figures or details other then spoken to me over the phone.
I am in a joint mortgage but the debt is soley in my name. I am 56 with 11yrs left to pay on the mortgage and very little chance of remortgaging (in fact I have just weathered 2 threats of redundancy so I'm reluctant to put an even greater monthly repayment on the property).
I assume that this product is being offered to you on the basis that you have equity in your property which needs to be raised before the IVA can conclude.
What is the current value of your property, and how much do you presently owe on the mortgage and any other secured charges? I am not a fan of secured loans for use in these circumstances, and in your case you would need to balance the need to pay an additional year's worth of contributions against the cost of the secured loan - which would take you 10 years to repay.
If you are going to seriously consider the merits of a secured loan, I would seek some advice from an independent finance broker as well as the firm which may have connections with your IP - just to get a balanced view. You have already been paying for a long time and are nearing the end. Do you really want to tie yourself into another 10 years of higher repayments for the sake of it?
The current value is around £125 to £130,000 and the mortgage is around £77,000 with a 50/50 split of equity between me and my partner to which she is not liable for my debt. There is another 10mths left of repayments to DFD of around £6,000.
Are you saying that I could carry on paying for another year (after Oct 2014) and then the debt would be completed without touching my equity? I don't intend paying off another loan over the next 10yrs as this is not what I signed up for.
Can you also tell me if DFD are correct in saying that they are wanting £10,000 in IVA fees also to be paid as I was told at the time (in 2008) that this fee would be taken out of the contributions pot every year and is not a further debt?
If you would like to, please send an email to the address in my profile and a member of our Forum Support Team will be able to review your account in more detail.
Let me get this straight you have less then a year of contributions left and your IP wants you to take out a 15 year loan ??
If that is the case they should be ashamed, and if they try forcing you please check your IVA wording carefully because I'm not sure they can force you to take out a loan .. IVA with new protocol state if unable to mortgage then extension for 1 year .. Does not say if unable to mortgage you have to take on a debt for a further 15 years !!!
Do a search on this forum as I believe it was DFD who tried the same thing with a few other people and after a bit of digging someone found a link between DFD and the Finance company offering the loan.
If that is the Case then its DISGUSTING !!!!
Last edited by Course on Wed Dec 18, 2013 6:46 pm, edited 1 time in total.
Are you actually saying Kev, that you have been advised to take out this loan by the representative from your IP firm, or have they merely suggested this as an option?
A specialist firm (The Select Partnership) contacted me after DFD passed on my details to them as I am in the last year of my agreement. They look at ways to release equity or other alternatives with a view to completing my IVA. They said that DFD would be looking at 85% of my available equity which equates to something around £18,000. The recommendation they came up with was a £15,000 secured loan over 10yrs - this equates to approx £28,000 in repayments over the 10yrs. They have "hinted" that if I dont take the loan option then DFD would persue me for the 85% of my equity (£18,000).
Can someone please advise me regarding the IVA fees of approx £10,000 that I have been told by DFD that I still have to pay as I thought this was paid out of my yearly contributions?
Please send an email to the address in my profile and a member of our Forum Support Team will be able to review your account in more detail. Once we have your case details we can give you the answers to your questions
As with most things relating to IVAs, the devil is in the detail - and the detail lies within your IVA proposal itself and the terms and conditions relating to equity release.
Assuming that you have the usual provisions which require you to explore sourcing a re-morgtgage during the final year, then you will have to demonstrate that you have complied with this. In reality it is unlikely that you will be able to find anyone prepared to lend to you on this basis.
In the event that a mortgage is not possible, but there is equity available subject to the maximum 85% loan to value calculation, then you either have the option to extend the IVA for a further 12 months - making contributions at the same rate you are paying at the end of the final year, or bringing in an equivalent sum from a third party.
The option you are being offered to take out a secured loan, would therefore appear not to be the most favourable option from your perpective.
Hi Judith,
I spoke with someone from DFD two days ago and they have passed on my details to the finance dept to consider what options are available and I'm waiting for a reply.
It's always a good thing when a representative of the company being discussed gets involved and seeks to help and maybe I'm being pedantic. But the general line used in the responses "contact me so that we can look at your case in further detail" irks me. That is what SHOULD happen BEFORE customers are presented with radical options such as this, which is clearly not in the OP's best interests.
Moan over, carry on.
Last edited by Bradders on Thu Dec 19, 2013 8:10 pm, edited 1 time in total.
But sometimes people like to come on the forum and ask questions before they even ask their IP firm. that irks me when it involves my own clients, because in a strange sort of way I believe we have failed them because they don't feel that they can pick up the phone to us and ask the question directly.
Mel, people like to be empowered by some knowledge prior to calling their ip firm. It prevents a wasted phone call or even a person feeling silly for asking x y or z.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
Also, some ( like me ) want to present their IP ( or case handler) with a preferred solution as well as the problem. As has been demonstrated, time and time again, on this forum the IP's call handler is not always, let's say, "up to speed"
Not all firms are equal
Last edited by Foggy on Fri Dec 20, 2013 8:18 am, edited 1 time in total.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
