IVA approved! thanks to everyone who posted

[thebear29uk]

Hi Sensible

You may be able to propose a final settlement with your creditors if you can offer better than an IVA will return. Bear in mind that out of your figure of £43380 will come approx £8000 of IP fees so the return will be approx £35000.

You and your wife need to look carefully at this option. Firstly you would probably be unable to get the full £40000 equity as most lenders will go to a maximum of 85-90% Loan to Value. Secondly companies offering more than 100% LTV such as Picture can then stop you selling your property at a later time. This could be a problem if interest rates continue to rise and you want to downsize.
What you might be able to do is look into switching to an interest only mortgage for a fixed rate over say 3 years with the extra borrowing. This would almost certainly cost you less than the £473 you would be paying in an IVA.

This option will very much depend on how many creditors you have and who they are. I know MBNMA are one and they will welcome dealing directly with you but arranging individual short settlements with numerous creditors could prove tricky. Your IVA would return approx 43p in the £ but spread over 5 years. If they would accept 40p as a short settlement but receive the money straight away you may be in luck.

I would recommend speaking to Tony Parsons - WelshBoy - about your mortgage options and also contact all of your creditors. If you ask Payplan to do it you will still pay fees and most creditors will deal with you directly on this matter.

Regards

Dave

[Sensible77]

Thanks for the response - very helpful. It's given me something to think about.

[Sadsack]

Hi Sensible

I have read this topic with great interest and have one or two questions myself regarding the issue of full and final settlement proposals.

I have also read Dave's reply to you regarding the IP fees which have to be paid and to this my first question to anyone who can answer.

My creditors asked for a modification at my meeting, requiring a return of 41p in the £. This would mean that I would pay around £43,500 over 5 years with an equity release within the first year. The equity release changed 4 times and they are now asking for an amount of £22,500. My IP has now informed me that over and above the original debt, I have to pay them their costs of £8,800. When I originally went into the IVA, I was told catagorically that I would pay no "fees" as these were included in the IVA. Is this the way it is done? I feel like a complete "numpty"!! I was under the impression (having read so much on this forum) that the creditors pay the IVA organisation "handsomely" and not the debtor.

If anyone can give me sound advice regarding this - please respond as I am more than confused now.

Sue

[tracy.h]

Hi sensible i agree with dave,if you can sort out an agreeable realistic,settlement with your creditors why pay the middle man,use the money you would have paid in ip fees to other realistic settlements.
I also,would take on board what Dave states regarding interest rates,i think the way things are going they will continue to rise,glad my mortgage is fixed for another 4 years,but in saying that hopefully by the time i come to renew my mortgage it wont be a massive shock finding the extra,if its that much higher,than im already paying,any way it wouldnt hurt to test the water and contact your creditors and find out what kind of reaction you get,just let them no you are currently with payplan trying to get an iva sorted but you are just enquireing what sort of settlement they would offer if iva isnt successful,may be worth a try,you can always stick with payplan if its not viable.
Goodluck

[Adam Davies]

Hi
Sadsack,you sound as if you are repaying your debt in full,is this right ? If so then you will also be funding the IP costs.
Can you confirm ?

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[Sadsack]

Hi Andy

First and foremost, thanks for your reply.

No, I am not paying the debt in full - £106k debt - 41p in the £ = £43,460 and now it has increased to £52,352K which now includes IP fees. To be honest I am at the end of my tether as I have no idea which way to turn and who is telling the truth. Sometimes I really do wish that I had not gone down this road.

Sue

[tracy.h]

hi sadsack
have you actually already excepted these modifications,i always tell posters to please read and understand any modifications before you agree an iva.
i have learnt the hard way.Ihope you can find the answers that you are looking for.
good luck

[Adam Davies]

Hi Sadsack
Has the monthly payment that you were requested to make changed ??
If not then I think that there has just been a misunderstanding with your IP over the fees,at the end of the day you are having over half of your debt written off by your creditors at the end of the five years.Also the IP fees are being paid by your creditors.

Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[Andy2]

Andy2 here (different to Andy Davie)

The "pence in the pound" is AFTER IP fees - so your 41p return does NOT include the IP fees.

What you are indicating is that you thought the 41p in the £ included IP fees. I'm afraid your IP is right and the £53,352 does sound right for 41p in the £1 on debts of £106,000 PLUS your IP fees. This equates to about £43,500 (41p in £1) and the rest in IP fees.

Your chairmans report MUST say this. What does the proposal say and what did the modifications say ?

[Sadsack]

Hi All
Thanks for all your replies. I have been in my IVA for 8 months now and accepted the modification in my chairmans report to realise a return of a minimum of 41p in £. I, in retrospect, was under the misguided impression that the 41p included the IP's fees as I was told that the creditors pay the IP costs. How wrong I was and how naive!!!

Andy D - to answer your question - the original monthly payment was £460, then changed to £435 for 4 months, then £485 for 8 months, an equity release within the 1st year of £22,500 (this was changed 4 times and this was the last figure given - perhaps it will change again) and then 48 months of £600.

All these different calculations are apparently to satisfy the creditors and pay the IP's fees and achieve the 41p.

Sue

[Adam Davies]

Hi Sue
Well you can gain some satisfaction that you are addressing your debt professionally and returning a decent dividend to your creditors.
You will also be debt free in just over 4 years and believe me life is real good after an IVA.
Put your head down and count the days to a better life.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[Andy2]

Sue, if you look at it your creditors ARE paying the IP fees because they are - in all reality - entitled to ALL your contributions (just over 50p in the £) in satisfaction of their debts BUT from these are deducted the IP fees leaving them with just 41p. I wouldn't be too disturbed. How have you found PAYPLAN in other respects ? Who were your creditors ?

[Sadsack]

Hi Andy
Thanks for the reply. I am not too worried, was just somewhat confused. I am not with PayPlan to cannot comment on that issue.

With regard to my creditors - MBNA, HFC, GE Money, Egg and Northern Rock. Egg kicked off a bit but NR were absolutely fine as were MBNA. There was no haggling from them - the hit came from HFC. They were the ones who originally did not want to accept the IVA but they were late in voting and my IP allowed them to make the variations.

HO HUM!!! Think I'll bang my drum!!!

52 months to go and counting down!
Sue

[MelanieGiles]

Regarding IP fees - these are provided for within the IVA proposal and approved by your creditors. In agreeing to the amount proposed by the IP, your creditors are accepting a lower return - in your case 41p in the £. You would be paying over the same amount in contributions regardless of what the IP charges, so that one is for your creditors to be concerned about and not you.

Finally, I find it very strange that you are being asked to sign an RX1 form at this stage, and would encourage all forum members to avoid doing so until their IVA is in 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

[Sensible77]

Payplan wanted me to sign and return the R3 as well as the RX1 before either needed to be signed. The RX1 should have had my address on it, but it didn't. I won't be signing anything, including the RX1, until it is necessary. I have made a mess of my finances but I'm good at paperwork! I've received their, (my?), proposal this morninmg and will be going throught it with my wife with a fine tooth comb before I commit.