iva declined please help

[MelanieGiles]

MBNA have always had a policy of preferring DMPs to IVAs, where they believe their customers would be better off by continuing to repay, albeit it at a reduced level - and this if fine so long as the customer is prepared to do this and the other creditors agree to exactly the same terms.

The problem about DMPs is that no-one has been monitoring their success or otherwise, to the extent that no-one really undertands how effective they are or what success rates they generate. It has been said that the average DMP fails within the first two years, but other leading DMP companies would argue that their own portfolios show a much longer rate.

If an IVA has been denied to you as a result of the actions of only one creditor, you must seriously think about whether bankrtupcy is now a better option for you, or whether you are prepared to enter into a DMP for the long-term.

[madbobix]

thanks everyone br sounds bad but i think i may be better off in the long run. it'll be a shame to lose my house it's all we had for our retirement if i went br would there be anything else to pay or would that be the end of it? thanks in advance

[hopefull1]

Hi Melanie

Sorry to ask this question as I know this forum is for Iva,s but have you heard anything about dmps being legalised or more regulated. Also is the failure rate down to debtors making themselves bankrupt or creditors as I would have thought that it is in the interest of the creditor not to bankrupt people but allow people to pay them back on a dmp if though it will take them longer they have more chance of getting their money back and gives the debtor the opportunity if they want to pay the creditors back.

MBNA have always had a policy of preferring DMPs to IVAs, where they believe their customers would be better off by continuing to repay, albeit it at a reduced level - and this if fine so long as the customer is prepared to do this and the other creditors agree to exactly the same terms.

The problem about DMPs is that no-one has been monitoring their success or otherwise, to the extent that no-one really undertands how effective they are or what success rates they generate. It has been said that the average DMP fails within the first two years, but other leading DMP companies would argue that their own portfolios show a much longer rate.

If an IVA has been denied to you as a result of the actions of only one creditor, you must seriously think about whether bankrtupcy is now a better option for you, or whether you are prepared to enter into a DMP for the long-term.

[pixie]

Sorry it didn't work out for you today, I take it your ip has closed the meeting and isn't trying to twist their arm?
Part of my biggest debts were with MBNA, luckily they sold the debt well before the meeting. They may well do the same with yours and then you could try again but it's a bit of gamble.
In BR you may not neccessarily loes your house. If a third party could buy the equity, then they would no longer have an interest.
Good luck with whatever you decide is the best way forward [:)]

[Andrew Graveson]

Hello hopefull1,

DMP's are regulated by the Office of Fair Trading. In very recent times they have greatly increased the difficulty of obtaining a Consumer Credit Licence to provide debt advice. This is because they have rightly concluded that this is a "high risk activity".

Those wanting to enter the DMP business will now be subject to site vists and competence assesments in advance.

We haven't seen a creditor seek to petition for a debtors bankruptcy when they are making payments via a DMP for the reasons that you mention. Legal action is sometimes used to get a charging order on a property; this is normally undertaken to protect the creditors interests in the future.

There's talk around that the same organisation that manages IVA's for many big creditors are going to represent them on DMP's as well now. If this is done properly then DMP providers may be able to offer more certainty to potential clients as to what will and will not be accepted by those creditors participating.

Don't forget that by not being a formal legal process a DMP offers greater flexibility than insolvency. There are advantages to DMP's compared to other solutions that stand alongside the weaknesses.

The key for any individual is to get a range of advice from different solution providers, or to get rounded advice on all solutions from a trusted adviser. That way people can make the best decisions for themselves.

[Skippy]

As Pixie says you may not lose your house, especially if it's in negative equity. You can ask a third party to buy your beneficial interest in the property, and if there is no equity this can usually be done for a nominal fee of £1 plus solicitors costs.

Regarding any payments, if you have more than £100 surplus a month you will be required to make payments into an IPA (Income Payment Agreement) of between 50%-75% of your surplus. If you have a look at my blog there is a table showing what you can expect to pay.

[madbobix]

thx skippy

[trina]

Hi madbobix,

So sorry to hear your news, I do hope things get sorted out for you, I know it's such a worrying time.

I must admit I'm so worried as our main creditor is NR and reading all the negative responses about them, I'm not holding my breath.

We are with Melanie so I hope she can work her magic for us.[:)]

Good Luck

Trina x

[madbobix]

good luck trina sounds like we're in a simalar situation,i'll post when i,ve decided which way to go

[trina]

yes do make sure you keep posting, this forum is a godsend[:)], I don't think I could of got through all this without it. The feeling that your not alone is so comforting.

I just wish I could speak to my parents for support, but they are not the most approachable of sorts[:D]

Trina x

[tori]

hi there madbobix,im really sorry to hear that your proposal was rejected.hope you are successful with whichever alternative solution you choose.take care and good luck.[:)]

[ianmillington]

MBNAs policy is, as Melanie has stated, to go for a DMP if it means the debtor can repay in less than 10 years. However, that does not necessarily mean that you can simply then approach a debt management firm for a DMP as MBNA may have specific requirements that will mean pro-rata payments won't work. You need to find out what they expect from you.

Also, if the first sign they get of any difficulty is the IVA proposal you can almost guarantee a rejection if they have a controlling vote as they will have expected you to exhaust all other avenues first.

Ian

[Andrew Graveson]

Hello Ian,

MBNA are typically happy with DMP's where they are receiving 0.8% of the debt on a monthly basis and they conclude that the debtor is making their best effort to repay the debt.

Where 0.8% isn't possible the debt will typically be transfered away from MBNA at some point in the future. The new organisation involved may well accept an amount below 0.8% provided it represents the debtor's best offer.

With interest frozen on the balance and making a payment of 0.8% it will take 125 months to clear the debt. Obviously many people can afford a higher return than this and will therefore fall below the 120 month IVA threshold.

[ianmillington]

Hi Andrew

Thanks for that. Actually what you say is confirmed by my debt management colleagues so the MBNA approach to traditional DMPs would appear to be softening a bit

[size5]

Ian,

I have some hard copy info on this matter on my desk, I would just echo what Andrew has said but with the proviso that if the debtor has payment protection on the debt then they would expect 1.27% per month of the outstanding balance to still clear within 120 months.

Regards.