if we would have been made fully aware

[W75]

Hello all,

I would first of like say how excellent this website and wish I would have known about before going for my IVA.

A little while I posted on this website to get a bit of advice because my partner could not cope with the realisation of life under an IVA i.e cutting cloth accordingly. I am pleased to say that we have sorted out our differences and are living within our means without any problems. Our relationship is stronger that ever. I was just wondering if someone could give us a bit of advice as we seem to be having a lot of problems with our IP.

On the 29th March 2007 me and my partner had both of our IVAs accepted after accruing debts of £30000 each. Myself being able to pay a lump sum equating to 25p in the pound and my partner paying a lump sum and £100 a month for 5 years equating to £36p in the pound. We were able to raise the lump sum by securing a remortgage on our property raisng our mortgage payments from £100 to £625 a month. The reason for this being that when we originally bought the property it was a 50-50 shared ownership scheme with a Housing association. The remortgage enabled us to pay off our original mortgage, buy the other half of the property leaving £11800 each to pay into our IVAs. My partner has had untold problems with her IVA. She never received any confirmation that the IVA had been accepted through the post until we prompted them and they never rang her on the day of the IVA to confirm that it had been accepted. When the chairman of the meeting rang me he said something about the IVA being accepted but a modification had been put in place regarding equity release but this would not relate to me because I doing a lump sum IVA. Is this correct?

My income has gone up by about £40 pounds since the IVA was accpeted, will this affect anything? He told me my partner's IVA had been accepted and that he would ring her at work to confirm this and the modifiactions that had been put in place at her creditors meeting. He did not ring her work(probably assuming that I would tell her about the success of her IVA) and as a result did not discuss any potential modifications that may be put in place. I assume that the equity release would apply to my partner as she has to make payments of £100 a month over five years. This has never been discussed with her for her consideration and she has never received any paperwork to sign for any modifications. Reading some of the stories I have read on here about equity release it is abit concerning particularly with interest going up as they are. Can anyone tell me where my partner stands if any equity release has never been discussed with her and she has not signed anything or given oral consent for any such clause to be included in her IVA?

Considering we only have £100 excess income i do not know if we would have agreed to such a clause if we would have been made fully aware of it as seen on our Mortgage illustration if interest go up by 1% our payments will increase by about £75 pounds a month. We are currently on a fixed rate until March 2009. By which time Interest rates could be a lot higher than what they are now.

[MelanieGiles]

Hi W75 and welcome to the forum

How ridiculous to put someone into an IVA who can only pay £100 per month. What are the annual fees for supervising this hugely inefficient arrangement I wonder? Probably will not leave much for creditors, so what is the point?

I assume that your partner signed confirmation of the modifications put forward at the creditors meeting. If not, and she is adament that she did not agree any clause regarding equity release, then she may be able to claim that the IVA is null and void, but this will probably put her back to square one as the IVA will fail.

Can you reproduce the exact wording of the equity release clause, confirm the current value of your property and the amount you owe on your current mortgage. It would seem that a full and final settlement may be the best option to get out of this silly arrangement.

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

[W75]

Hi Melanie,

Thanks for your reply.

The exact wording of the equity release clause which was sent with my chairman's report which does not apply to me as I am in a lump sum IVA is as follows:

"In the 4th year of the arrangement an open market valuation of the property must be provided to the supervisor, together with a mortgage redemption figure. The debtor must obtain a minimum of 2 offers of remortgage which address the debtor's share of any equity therein and provide documentary evidence of each to the supervisor. The debtor must accpet the offer which provides the greatest return to creditors and 100% of the debtors's share of such proceeds must be paid into the arrangement."

As I said in my original post my partner never received any telephone call explaining this to her on the day the IVA was agreed or anything in the post to sign confirming that she agreed with this. If we would have known the facts we would not have accepted this.

In your reply you mentioned that the IVA would be null and void as a result of this. Would my partner still be liable for any fees incurred? Would my partner then be able to apply for another IVA if this arrangement was made null and void?

We have already remortgaged our house to release equity to put into the IVA. This went through in May. Our first new mortgage payment was made in June. My lump sum of £11800 has been paid to the IVA company but we still have my partner's lump sum of £11,800.00 held in a bank account. We refuse to hand over to the IVA company as my partner is still getting letters and phone calls from creditors even though the IVA was accepted in March? Do you feel this would be enough to offer for a lump sum IVA on a debt of £32000?

She has been paying the £100.00 a month(which she has to pay for 5 years) to the IVA company since April 2007. This £100.00 however is a struggle to pay as various bills have increased and we find ourselves often borrowimg money to pay this. My partner also has to pay her mother £50 a month who we were told could not be considered as a creditor? Her mother is a pensionner who now relys on the money to live. This money has to come out of our food money.

I feel that my partner has been treated like the poor relation in this process. My IVA appears to have run smoothly but my partner's appears to be attracting all the problems. We just want to get this sorted out one way or another and get our lives back on track.

Would be very appreciative of your help and advice.

[hara]

Dear w75,

It is APPALLING behaviour on your IPS part.

I have been posting on this forum for some time and constantly see postings of unsatisfactory behaviour from some IPS.

Once thay get a client on board , some seem to think that they can behave unreasonably.

Once we are in IVA,IP knows that they have a mojor say and we have a heavy metal ball cahined to our leg for 5 years.

hara

[hara]

Can you disclose who your IP is please?

hara.

[MelanieGiles]

I sttongly suggest that you both arrange to meet the IP at his/her offices to try and sort this out. You can ask to see a copy of your file, and the evidence that they ar relying on that your wife agreed to the equity release modifications.

A new IVA will not help, as you will not avoid equity release these days. I am strugglin to understand the merits of your wife's IVA. Can you provide further details of the number of monthly payments she is required to make, the monthly amount payable, and the IP fees. An IVA based on contributions of £100 per month just does not work.

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

[W75]

Hello Hara and Melanie,

Thanks very much for your comments and reply.

Hara, in reply to your question the company we are using is Clearstart. The expression "IVA factory" appears to apply to this company, although to be fair my IVA has run very smoothly it is just my partner's that we appear to be having untold problems with.

In reply to your question Melanie, my partner has to pay a lump sum of £11,800, this being her share of the equity released from our property to put into the IVA, and £100 a month for 60 months.

The fees she has to pay are £5100+VAT this being made of £2600 plus VAT for nominee fees and superviosr fees of £2500 + VAT.

I did question this £100 a month fee but was told that if she did not pay this the IVA would not be viable. But viable for who?

We are really confused what to do at the moment. We can arrange to talk to the company about this clause but if the IVA is made null and void then where does my partner stand and what can she do?

Would appreciate any help and advice you can give.

Thanks.

[Adam Davies]

Hi
Well the £100 a month your partner is paying is all going to your IVA provider.Why they didn,t propose a 25p dividend for your partner and take their fees then,I don,t know.
Take Melanies advice and take time out to visit clearstart,and sort this strange IVA out.
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

[W75]

Thanks for your time and advice.

Can you tell me if an Equity release clause applies if you are subject to a lump sum IVA?

[hara]

Dear w75,

As for as I know,NO,as it is a full and final settlement.

Hara

[Adam Davies]

Hi
It,s not unusual to introduce a lump sum at the start and to pay a monthly figure into your IVA followed by a further equity release.What is unusual is to pay £100 per month for five years and then have to remortgage and release equity.
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

[W75]

Thanks for all your help and advice. I will contact the IP on Tuesday and let you know what happens.

[W75]

Just read your post Andy. I am not sure that I have explained myself very well. We have £11800 in the bank which my partner should have introduced at the start of the IVA but is not doing so at the moment due to the creditor problems mentionned above. On top of this she has to pay the £100 a month for 5 years and then will probably(which is what we need to find out) have to release further equity in year 4. Does this still sound strange to you?

[Adam Davies]

Hi
Yes it does,it,s the £100 per month part s and the fact that you didn,t expect to have to remortgage again.
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

[catullus]

On the remortgage issue it's an example of an incompetent creditor putting through a stupid modification and the IP not picking it up, or giving W75 proper advice at the time of the MoC.