iva a mistake

[kah]

When I contacted my IVA firm - I wanted to look at debt management. Although they said I was in a position to go down this route - I think I was steamrollered, at a very weak moment, into going for an IVA (lesson to all READ THE SMALL PRINT). When I contacted this forum before I set out one of my main aims - that I could still assist my son to finish his university education - the IVA has not allowed this. The other aim I expressed to the Debt Management/IVA company was the need to ensure that my home was safe for my son whatever happened (well as long as I keep on paying). The IVA doesn't do that either.
I have about 100000 of debt - a 35000 mortgage - a 40000 secured loan - a net income of 2700 a month - and an IVA that will pay about 48p in the pound initially. I pay 1050 IVA every month and a further 950 mortgage and secured loan. I am in year 2 of my IVA and by the time I reach yeat5 there will probably be enough equity release in my home - that I'll end up taking out another mortgage and paying back everything I initially owed I should think. This means taking out this new mortgage when I'm due to retire (I'm in my late 50s).
If I had stuck to my guns and gone for debt management - surely the end result would have been similar - but my house would have been secure for my son whatever happened to me (the IVA turned down the payment protection the company suggested in my proposal - and the assistance to my son).
I am more depressed than ever - struggling - it's worse than the debts - I've made the wrong choice through depression and weakness.

[catullus]

Personally I think that an IVA was the correct advice but, yes, you will have to make sacrifices.

Without going in to a huge amount of detail you need to be aware that statistically far less than 10% of all DMP's cpmplete, the reason being that it requires very little discipline from you and at the first time of trouble, what do people do? You've got it, stop paying the DMP putting them right back to where they were.

Even if you end up paying the creditors in full (and there's a way to go to get from a projected 48p to 100p) you've got a guaranteed way of getting rid of your unsecured debt in 5 years because the creditors have agreed to suspend the interest which they don't always do in a DMP.

There may be far more to all of this, and I don't know your personal circumstances in detail, but my comments are intended to point out to you that DMP's are not all that they are ceracked up to be and often end up getting you deeper in to debt.

It might be worth hanging on to that thought.

[Adam Davies]

Kah
In a DMP you would be paying for many,many years as interest would,normally,not stop.
Your house is secure in an IVA as long as you keep up payments and you will only have to remortgage for an amount that you can afford.
An IVA is tough,but there is an end date to it unlike a DMP and in bankruptcy you would have possibly have lost your house.
If the payments are a problem then speak with your IP and see if a reduction can be agreed via your creditors.
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

[kah]

Surely I'm going to be paying (mortgage equity) for the rest of my life anyway? Also - no - my house isn't safe is it? If I die - the mortgage is payed by insurance - my son loses his home so the debt can be made.
The point I'm trying to make is - I WANT to pay off all or as much of my debts as possible - I wanted to make sure than there was no way my son would lose his home(many of my debts are due to his father developing mental health issues over the last 10 years and this is also why I am placing such a great emphasais on trying to create some sort of practical security for my son)- I wanted to be able to pay the money that the government website states I should be paying to take my son's student loan from 3000 a year to 5000 (rounded up figures) a year.
Those of you who saw my posting last year re. supporting a student will be sorry to hear that my son has to rpeat his second year accoring to his tutor "he has been working too many hours ..." Can you imagine how guilty all this is making me feel? I fully understand the benefits of an IVA - these changes happened at my IVA meeting - at this stage I felt pushed by my IVA company to accept - I Panicked - and yes I made the mistake of acceting what are absolutely unacceptable terms to me personally.
Is there any way of making part early settlement through remortgaging and debt management for the rest?

[jpj]

Sounds to me like the IVA was the right decision... None of the 3 ways would have left you decent money to support your son.. A DMP would have saddled you with huge debts and interest for many years(and with 100k debt would probably have failed), Bankruptcy would have left you with nothing...an IVA was the best way to protect you and your son, and at the end of 5 years at least you will still have maybe 15% equity left in your home under an IVA even after equity release!

[kah]

Can someone explain equity release please? My IP brushed over it and said I wouldn't be required to pay much ... If I owe say 30000 secured on my property at the end of my IVA and have payed 48p in the pound of a 100000 debt - does this mean I am then paying a 80000 mortgage (or similar) from my pension?
Also - the thing no one has replied on - if I die tomorrow - my son (who has been through too much and has no one else to assist him in any way - he has not recovered from his father's ill health and violence to us - a refuge etc) will lose our home. All my fault I know - but I feel the forum - like my IP is ignoring my human issues here.
What is the point of all this?

[mish1953]

Kah - how old is your laddie ?

Im nearly 54, single parent, 14 yr old daughter and BR .. I will lose my house in the next 12 months and I too worry about my daughter .. but i take the view that I hope to be around for the next 6 years at least , and hope that I can make a fresh start and provide her with a good life.
I wont be able to leave her a house or lots of money, but will do my best for her - thats really all that you can do in life .
She too has had a difficult life, especially having to put up with me for the last 8 years - lol , but I can only teach & guide her and let her stand on her own feet .

On the equity front - im no expert in IVA but I guess that the creditors would hope to get all of the money from you - mybe one of the experts can go into detail.

slainge
Mish

[lily]

Hello Kay

I have just read your post and the forum do understand the human issue's this is a very supportive place and everyone on in or been in an IVA has it TOUGH.

We all get here one way or another and its not about what happened or how we arrived, the fact is we are in debt cos we borrowed money.

I have two disabled kids at home and I had to move house because of their needs, I really had a huge fight with social services and involved the ombudsman and forced them to listen. There I was, on my own with a shell of a house three kids two disabled with no help. I borrowed money so that we could move in, I worked like a dog for a month and I had to pay two lots of rent which was more half my income and bang, I got in over my head.

I do not feel sorry or want sympathy for this, it was my choice and I screwed it up, my family were very angry as I had been too proud and pig headed to ask for their help. I could have waited to decorate a bit or get flooring, I took out loans and maxed out the cards and its all down to me, I accept it, am trying to face it. (long story, wont go there)

I have nothing to leave my kids but I give them care and love, some kids dont get that. I will make them into caring, loving, polite human beings and whatever circumstances we are in they will be happy because we are happy.

I am sorry about your circumstances, I really am but I feel that you just need to face it, draw a line in the past and move on. With what you have endured already you will be so much stronger than you think you are. Use whatever tool you feel you need, IVA, BR or DMP. Just look ahead, look after your son and smile for him, that is what he really needs the most. I do think that the IVA is the best option given your circumstances but its your life at the end of the day.



lily

[kah]

Thank you all for replying. I am perfectly aware that we all have our own stories and responsibilites and I don't think that there should be any element of - my circumstances are worse than years. We all did this ourselves - of course we did.
All I have been trying to say is that when I dicussed my 3 priorities with my firm - before I had even considered IVA - in my debt management plan days my aims were 1 pay all the debt (it's my debt and it's owed) 2Keep asafe haven for m son 3 Comply with government requirements (not "law" byt it states on the government website that if parents earning over various sums do not support their children as required those children are unlikey to succeed at university)
My company assured me of these things (except they didn't seem to think paying all the debt was likely and actually said I shouldn't feel guilty about this because of credit interest - but I do)in an IVA. I messed up by panicking when the creditors' meeting disallowed the proposed IVA insurance - and the moneys to assist my son. I messed up by accepting something that didn't guarantee my 3 priorities.
Now I'm trying to understand what I have agreed to and to warn others to pay attenetion to the details
I have never met my IP and my case is being managed by the 4th person in 2 years. Not a very supportive feeling and question not being answered by the current IP. (Last one was good)
Apologies for boring you all with a middle class IP angst

[lily]

Kah

There is no need to appologise, we are all in the same boat.

I do not understand what you really want to do, I can well understand that you signed up to the IVA out of desperation, are concerned about your son's education and future and the security of your home.


I think we all feel guilty about not being able to pay back etc but its time to forgive yourself and give yourself some credit for taking steps to try to address it.

You should have access to your IP and have a right to have everything explained fully. Only then can you really make an informed choice about where you are and how to move forward.

I appologise if my post upset you, it was not the intention. I can feel the stress in your post, I certainly didnt want to add to it.

Dont give up.

lily

[kah]

Thank you for the support. I just see no point in anything. We all need our IPs to be there - if they are not we are scared to complain - so there is no feeling of security or support - even though we are paying for this service (or really I suppose our creditors are)
Good luck to all

[MelanieGiles]

Please don't tar all IPs with the same brush - the majority of us are hardworking professionals that give our clients as much time as is required to do the job. The thought that any of my clients would be scared to pick the phone up and speak to me is beyond belief, but most IPs also employ a dedicated support network of experienced case managers who are more than capable of dealing with client queries also.

It is a shame that this does not happen in every firm, which is why it is so important to choose the right advisor in the first place.

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

[Sadsack]

Hi kah

You asked a question of equity release and can someone please explain it to you. Well, I am going to give it a bash!!!

You indicate that you are paying 48p/£. If you have debts of £100k - this will mean that you are going to have to realise £48K over the next 5 years. You need to remember that you have to include IP fees as well and these could be around £8k for the duration of your IVA. (This amount could vary, depending on the complexity of your case.) So in all you are looking around £56k. If you are presently paying £1050 into the IVA every month, my calculation shows that you will in effect be paying £63K in total. Based on this, I am not too sure what your concern is regarding equity release. However, if you are wanting to bring your IVA to an early conclusion, the best way would be to get an independant RICS Surveyor to give you a valuation of your property and to ascertain whether you have sufficient equity in your property to propose a Full and Final figure. This would require you to put the proposal to your IP, inititally speaking to them and asking what sort of figure would be acceptable. If your IP feels that you have a good chance of settling this, remember that in an IVA you can only remortgage 85% LTV. (Although others on this site have mentioned they have been offered 95%).

Andy is correct, whilst you are in an IVA and you maintain your secured borrowings, your house is safe.

As for IP's, there are some very fine people out there, particularly those who regularly post on this forum.

If any of the information I have given here is incorrect, I am sure one of the regular IP Forum experts will be along to correct me.

Good luck in whatever you decide.

Sue

Ho Hum! Think I'll bang my drum!

Read My Blog
http://sadsack.blogs.iva.co.uk/

[ray_a]

I totally agree with Melanie on choosing your IP supervisor and I wish I had spent a lot more time searching for the right person.

It is crucial to meet them early in the process and determine whether you can have a good relationship with them.

[jpj]

I agree, An IVA is an IVA..its the IP who puts it together who makes or brakes it! And it really is worh shopping around for something that is basically going to rule your financial life for 5 years!
I had £127K of debt (Higher than KAH,s) have the same income as KAH,and probably expenses not that far different and im only paying £570 a month and 18p in the pound!
I dont think people realise how much IVAs can vary..and how it helps to have an IP who is prepared to fight to the end for you...Its a shame there arent more Melanies in the IP profession!
JPJ