In an IVA but.. Problem!

[Scarlett]

I am in an IVA (accepted in March)during the IVA negotiations the one of the smallest creditors placed a charge on my property when challenged they decided to keep the charge and leave the IVA group of creditors. I had informed the company dealing with my IVA forwarded all correspondence to them and called them several times about it... they failed to act and stop the charge being placed... although I was assured they could and would.

I had various telephone conversations with the creditor(nothing in writing)and was lead to believe they had done this merely to ensure they recieved all money due to them at the end of the IVA period when a remortgage released equity as required by the IVA agreement.

On the same day my IVA was accepted I recieved notification that this creditor intended to force the sale of my property to clear the debt. Since the IVA has been in place a variety of payment options have been offered including:

Servicing the interest during the IVA and full amount at end.
£5995 now (money in IVA "kitty" as full settlement - full amount due is £7600)

Obviously in an IVA the options are limited and they know this well. Every attempt has been refused basically they want it now and they want it all.

The bottom line is I have now recieved court papers and the creditor has indeed applied to the court for sale of property. The IVA company have advised me to seek legal advice although quite how I am supposed to pay for it I don't know and I'm on my own they can't help me at all.

Even though it is obvious that the forced sale would not be in the interest of the creditors involved in the IVA in fact it would likely jeopardise the whole agreement and force me into bankruptcy.. I have no way to afford removal costs let alone come up with a deposit for a rental property even if I can find one with such a poor credit record.

Sorry for such a long post but this isn't explained in 2 lines... I guess what I'm asking is does anyone have any knowledge of this happening before I will probably have to represent myself at the court hearing so any information would be helpful. Thanks for reading.

[Oliver]

The Legal Charge placed on your property leaves you with a few possible solutions:

1. How much equity do you have in your property?
Depending on the amount and although it will be extremely difficult - perhaps it would be in your interest to hand back the keys to your property. You state that you currently could not afford removal costs - with the money saved from stopping the mortgage repayments - put down a deposit on a new rental arrangement. You could explain to the Estate Agents that your credit score might be low due to your IVA however you do have the deposit required.

2. Is there any possibility that a relative or friend can stump up the required money.

3. You could go to your assigned IP and suggest re-mortgaging your property for the required sum now! Although it could be seen as a preferential payment over your other creditors, they may accept, as currently the legal charge could potentially jepordise the whole IVA anyway. Your IVA would be reduced but it will be in the interest of your creditors.

By the way who is the creditor who has served this legal charge?

Hope these possible solutions help.

You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[neverending]

Scarlett
Just a few questions
If you have £5995 paid into your IVA and it started in March then presumably you started paying into it before your IVA was agreed.
Why your IP has done nothing about it baffles me and from the facts that you give i would think that they have been negligent
James is quite right in that if there is no other way forward and you are going to have to have a forced sale then stop mortgage payments now and use the saved money to put a deposit down [should only need two saved payments].However DO NOT just hand back the keys.Go through the sale process and get this creditor off your back
There are so many factors regarding your case and not having all the info makes it really hard to advise.
Can you give more details ?

[Scarlett]

Thank you for your replies in response:

There is approx 20k equity in the property as the IVA was initially delayed for a period as at the same time my company restructured requiring me to move offices and relocate so my then current house was sold and the present one purchashed. As there was a salary increase involved and it was clearly in the creditors interest I kept my employment they agreed to the delay. The motgage provider because of the looming IVA would lend only 20k less than the property cost.

Unfortunately I do not have a relative or friend who can come up with the amount either a: in time or b: with no chance of being repaid for at least the 5 years of the IVA.

I have contacted my mortgage provider to explore the possibility of them lending the required amount. They are going to send me figures of exactly what they may be able lend and how much it would cost plus the application form and I am trying to get an answer from the IP as to whether I can fill in the forms and apply without being in breach of the IVA terms. It may require a creditors meeting as yes they are concerned about "prefential treatment" of this creditor.

The creditor is American Express and I believe they are the smallest creditor and the only one not in the IVA.

Yes I did start payments before the IVA was in place at the amount the IP projected would be required because the IP asked that I did and advised me that doing so would improve the chance the IVA would be accepted.

When I recieved notification of the court hearing regarding the charge I faxed and mailed hard copies to the IP immediately and telephoned them. So they were aware of the hearing and the dates as soon as I was and I believed they were dealing with it.

The charge was in fact applied uncontested as no-one attended the hearing or wrote to the court making them aware of the IVA negotiations. I would have attended the hearing myself had I known that the IP was not actually dealing with it.

The IP did suggest an interim order could be obtained although not in time for this particular charge and asked for a cheque from me made payable to the court for some reason they could not take that fee from money I had already paid to them. So I sent the cheque and signed the papers. But no interim order has ever been applied for. I asked about it when another creditor was threatening legal action I was told they never recieved the cheque they did in fact contact that creditor and stop the action.

But the situation is very similar again now, in that, as part of the IVA agreement the creditors have a 100% claim (minus the charge) to the house equity at the end of the term and the IP advised me they would be registering an interest with the land registry as soon as the IVA was approved. This also has not happened leaving American Express to claim in the court documents that they and the mortgage provider are the only interested parties.

I intend to attend this hearing whether or not I am able finance legal representation. I have asked my IP for a letter stating that the sale of the house is not in the interest of the creditors involved in the IVA hoping it will help. They don't know whether it is possible for them to do this but will get back to me.

It makes no sense to me it's a small amount when compared with my entire debt and it's not about "whether" this creditor gets the money it's about "when". If they are successful and the sale is forced I'm worried about how stopping mortgage payments will affect my status post IVA and will the monies not being paid in mortgage for that period be required in whole or part to be paid to the IP?

Many Thanks
Scarlett

[Oliver]

Scarlett,

This is a very complicated case and the bottom line is that you must talk it through with your IP. In addition you should not make any decisions based on discussions from this forum. However in terms of your credit status post IVA you will not be in a worse position than you are now and any monies not being paid into your mortgage will be expected to pay for your rental costs.






You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[neverending]

Just a note that American Express and Diners club are,in my experience ,the most unhelpful creditors that you can have.I believe that they will always vote against an IVA proposal,they did in my case and they were the only ones to do so.
Good luck Scarlett and as James states you need to speak directly to your IP,each and every day if needs be.
Finally a lesson to all,do not start paying into an IVA until it has been officially started.All you are actually doing is insuring that the IP will not be out of pocket cuz if your IVA fails the only person getting the £5995 as in Scarletts case [hoping not] is the IP !!!

[Scarlett]

Thank you for your replies..

I have and will continue to talk to my IP but to be honest I have no confidence in them at this moment in time. I have consistently been assured that things cannot or will not happen and then they do with bells on

My IP's current position is that I should seek legal advice although they believe the judge may well consider the impact of the sale on the other creditors and yet, they say, that they cannot attend on behalf of the IVA creditors. They may be able to draft a letter although they are still unsure on this point... and I can only hope that it materialises before the hearing.

It is very complicated.. my hope from the forum was that some-one may have had experience of something similar.

Thanks again Scarlett

[accgroup]

Hi Scarlett

You are not alone in your experience. I know of a few cases where creditors have tried to pursue their debt outside of the IVA by obtaining a charging order which is then registered against the debtor's property. This is not usually possible under the terms of the IVA - a standard IVA would usually provide that no creditor can commence or proceed with any legal action to recover their debt and must be bound by the IVA.

It sounds like your IP is being very unhelpful. There is no reason why they cannot write to the Court, and should have done so before it got to this stage. You would need legal advice and representation to overturn the original charging order. Without the full details of your case I cannot advise you any further but now that the creditor is going for sale you must get your IP to act quickly - write to the Court and the solicitors acting for the creditor. If your IP does not co-operate you could do this yourself - if you have all your IVA papers and you are running out of time.



AccumaGroup
http://www.accumagroup.com - One of the UKs leading debt and insolvency advice firms with over 200 employees.

[simmonsdirect]

Hi Scarlett

In my experience if you get a bad IP you are in trouble particularly once they have enough money in the IVA to cover their fees

I would suggest that you write to the IP and tell them him that you are considering complaining to their regulatory body.

Be careful though as some may see this as a challenge and then find every way they can to fail your arrangement and the leave you with the consequencies of that failure

Regards

Gary

[hara]

Amercan express is also one of creditors and have obtaied a ccj just before IVA was accepted. I have asked for a redetermination of case and I have been informed if has been transfered to local court. In the mean time my IVA has been accepted and My IP infprms me that IVA will supercede any legal action. I have been told that all creditors are bound by IVA legally? If so how can one creditor can enforce a forced sale though in my case it not at that stage.

Do I still get court papers from local court>

How will I know if a charging order has been obtained.
I am under the impresson that all legal action ceased after IVA approval.If not what is the pont of obtaining an IVA as all creditors can obtain a charging order and enforce a sale or pursue after concluson of IVA.

Can some clarify please?Is IP not supposed to sort out these things?

hara

[acsn]

Hi Scarlett,

I think the advice not to make decisions based on discussions on this forum is a sound one. Seek advice from CCCS or CAB.

Amex collections are doing their job well in that they have got you jumping through hoops to try and get them their money.

If they did get a court order to make you to sell your home I doubt in a forced sale scenario; when they are likely only to obtain 85% of true value; there would be sufficient equity after sale costs and taking account that you would no doubt stop paying the mortgage whilst the process of getting vacant possessions was being followed. This can take up to a year.

I feel any Court would be mindful of making you homeless and duty bound to take account of the existing IVA and the fact you have tried to face up to your responsibilities as best you can.

It is a shame that your IP can not do more to try and draw Amex into the IVA but looks like your on your own on this one.

Remind yourself your are a strong capable person but like many of us are not so good with money,( for me read rubbish with money).

Remind Amex that if they force you to sell your home they'll get nothing. I owed them nearly £15k and they're part of my IVA, they didn't even vote at the creditors meeting.

Collections departments are just that , you've been reasonable with them and maybe they see that as weakness and a chance to get their money in full. Deal with the court and their solicitor from now on and be hard as nails.

Times like these are so worrying and depressing. I now know I was fortunate in that my IVA went through first time with 12 creditors and £130,000 of unsecured debt.I still wake up in a sweat sometimes wondering how I got into this mess but I had my fun and now I've got to pay and pay and pay and pay........

Good luck and don't let them grind you down.