it would really help if people could help.

[klr81]

Hi
I have been on the forum a lot recently and it would really help if people could help.
My Husband and I owe nearly £51,000
(I Hate it when its written down!!!!!)
we do not own our home we currently rent it, we have a car but it is essential that we keep it for me to get to and from work. We are currently paying out £676 out for a DMP and we have just completed the IVA documentation, simply because then we know that there is an end to it, which is better than not knowing.

We currenently have approximatley £100 free every month for us but this also includes my Husbands ciggarettes for the month...Can anuyone advise me on what should happen next and when we are likely to hear from out IP. Most of our debt is with Northern Rock £45,000 approx, what are they like to at agreeing to IVAs?

Thanks
Kirsty

[go_4_broke]

Hi Kirsty,

I don't think NR are anyone's favorite creditor in IVA's but unfortunately your chances of success are largely down to what you are able to offer them as they have around 90% of the vote.

However as this could be up to around 70p in the £ on the figures you give I would have thought this would have to give you a very good chance. This would get you out in 5 years as against the 6+ you are looking at under the DMP which is still a very long flog.

From a purely financial viewpoint you would probably be a lot better off in bankruptcy if you can stomach it and you would be free of payments in 3 years rather than 5 or 6.

You are likely to be allowed to keep the car (or at least A car) in either case.

-Best


Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'

[jamesfalla]

Hi Kirsty

As go_4_broke says, unfortunately Northern Rock will not automatically accept an IVA, however, they do look at each case on its own merits. If you have been in a DMP for a while (6 months or so) this should improve your chances considerable of getting them to play ball as they can see you have made an effort.

I agree that as a fall back position, Bankruptcy definitly seems an option for you as you have no property to loose. I would add that in Bankrutpcy, if your car is worth more than £1500, the court could make you down-size even if you need it for work. This happened to one of my bankruptcy clients this week.

My feeling would be press ahead with the IVA but if Northern Rock do not accept, then be prepared to take the bankruptcy route. In fact (not withstanding the car) fincially you would be better off declaring bankruptcy as the court will only make you pay monthly contributions for 3 yrs max.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk

[neverending]

Hi
I,m not sure if Northern rock will accept over a DMP that will return the full debt over 6 years[ish] depending on the interest charged[or not].
An IVA will return only 60p in the £1 if you pay £700 per month [ not sure how creditors view tobacco costs so it could be more than this].
I am sure that an IVA will give a far better return to Northern Rock than bankruptcy and common sense says that they should agree it....................but then again who knows how they think !!

[MelanieGiles]

Hi Kirsty

Sorry, but I do not feel that an IVA proposal will be acceptable to Northern Rock, and it would be unwise to put one forward without your IP discussing this with them directly in the first instance.

They have an enormous amount of your aggregate debt, and I feel will probably reject this proposal on the grounds that a DMP will return a full repayment to them - albeit over a longer period for you. With loans of that size owed to Northern Rock, I imagine that they were taken out to run for a period in excess of 5 years anyway.

As previous posters have mentioned, you could also consider bankruptcy proceedings, but in my view a Court will have issue with this given the amount of disposable income you currently have, and will possibly tell you to consider coming to an ongoing arrangement with your creditors - so back to square one!

I also imagine that you are property owners if Northern Rock have lent so much on an unsecured basis? Could you confirm this please?

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

[klr81]

Hi Melanie

We dont own any property at all our loans and credit cards have been unsecured, I really do hope that the IVA does work because our DMP has ben increased to 8 yrs with a review.... We really do not want to consider Bankruptcy but if that the way it goes then thats how it is, but we shall see what happens for here on in.

Thank you every one for your comments