ineligible for an iva apparently

[kirsty1]

hi - I'm about to use a company called william goldberg for a dmp. i owe £25000, inc. a student loan of 6k,whic makes me ineligible for an iva apparently (also if i have children in the next 5 years i can't see thatbeing suitable anyway). going through the charitable companies, i was hardly left with anything, which would make me favour a secured loan. goldbergs seem to be more flexible and at have taken £280 to be a suitable payment. i am worried that my creditors wont accept a dmp. i really dot want bankruptcy. are they likely to accept? i owe halifax 14k on a card, 2k overdraft. next store card is £150, and black horse £1800. thanks

[ianmillington]

What reasons have you actually been given for being ineligible for an IVA. Is it simply that you might want children before the 5 years are up?

With debts of £25k and a contribution of £280 you are definitely in IVA territory. Would potentially take care of the student loan too.You also refer to a secured loan so presumably you have a property. Can you give details (Value and approximate equity)?

Ian

[iva experts]

Hi Kirsty,

You could possibly still do an IVA eventhough you have a studen loan, William Goldberg are correct in one sense to tell you that you are uneligable as the Student Loans Co can ask for a dividend of 80-90p/£ where they are controlling.

However what about leaving the Student Loan out of the IVA and paying this off when you your IVA is finished. I would call 2-3 more companies to get other advice on your debt situation.

[Reviva UK]

sounds like you are now in the right place. can't see any reason why an IVA wouldn't work because of chldren/

Also before you look at DMP look at your living costs first then the remainder is what is available on a dmp not the otherway round.

[Oliver]

I agree with the others, doesn't sound to me that you are totally inelligible for an IVA. Can you post some more details on your individual circumstances.

[cr15py]

Just a thought, owing £25k (inc £6k student loan). That leaves £19k owing, excluding the SL, of which £16k (84%) is owed to Halifax.

Am I missing something, or would that cause a problem?

[ianmillington]

If the IVA does not provide for a high dividend, then Student Loans will most likely vote to reject it. However you need to get 75% plus in value of those creditors who vote to vote in favour.

Pardon the pun, but the "grey area" will be Black Horse. Whether they vote to accept or reject will depend on a number of factors. How old is the debt, what was it for, what attempts have been made to repay it etc. Have your advisors made the basic assumption that Black Horse and Student Loans would both reject?

Also, can you please let us have details of your property assuming you own one?

Thanks

ian

[kirsty1]

Hi - Yes, apparently, because my black horse loan was taken out within the last 6 months, (for a sofa) they'll say no to an IVA, no question. As will Student Loans, who have 26% of my debt. With regards to my house, its a 125% mortgage with Northern Rock, which we took out in August. So not much equity at all.

[ianmillington]

Hi Kirsty

Then I think you will indeed struggle to get an IVA. Also, I assume the Northern Rock mortgage is the "Together" product where the 25% element is unsecured? If so, then I think your prospects of an IVA at this point are probably zero, I'm afraid.

Apart from the obvious, your house, are there any reasons for wanting to avouid bankruptcy?

[kirsty1]

I'd probably lose my job if I was made bankrupt, although the house is in joint names so would anyone actually want to make me bankrupt for the little bit of equity that might be mine? I'm ok with doing the DMP - I'm trying to get a part time job to pay it off a bit sooner - but will my creditors allow it?

[MelanieGiles]

I completely concur with Ian on this point - there are too many difficulties with your creditors to make an IVA workable. I am sure that your creditors would much rather see a DMP than bankruptcy, so make sure that you choose a firm to represent you who can demonstrate a good track record in getting interest frozen and where you will get a good personal service.

[ianmillington]

Good luck with your DMP.

If through no fault of your own the wheel falls off it after a year or so you might revisit things. In that time, who knows, the attitude of one or more of the "negative" creditors might change, especially if you are seen to have made an effort[:)]

Ian

[kirsty1]

Thanks everyone for your replies. Although I have just cancelled all my direct debits and am worried about the fall-out, i am feeling much more positive today than I have been. I am more than willing to pay off my debt in full, I just need more time to do so. And I am looking forward to the day when I am debt-free. Thanks.

[richardparkin]

Hello Kirsty1,

I am fairly new to this site and have made hardly any postings. However, I would like to add a comment or two of my own for you if I may? Student loans can’t be included in an IVA anymore or are for that matter covered by a bankruptcy. I also think that you must start to repay your student loan when your earnings reach a set level. Do you know about this? A debt management plan, assuming that creditors will freeze all interest and there are no management charges, will take over 7 years to repay. Are you sure you don’t want to even consider bankruptcy? Are you certain that you would lose your job? Any repayment plan in excess of 7 years could prove very daunting. A bankruptcy is only likely to last a few months, has nothing like the stigma it used to have and an income payments order would at worst seem to be minimal (if at all). Any third party (family member etc.) could make an offer to buy out your equity – you say this is only small? Don’t forget though, that you will still have the student loan to deal with.

Whatever way you choose, at least there is a solution for you and I bet that makes things much more positive!

[MelanieGiles]

Sorry to correct you Richard - but Student Loan debts can be and, should be, included in IVA proposals. They are a creditor at the end of the day and need to be disclosed as such. You are correct in that they are excluded from bankruptcy.