IVA ERROR BY IP!

[pm.e]

Hi,

The company, who has been dealing with my IVA, has incorrectly advised me, and I think has made a massive mistake.

My wife and I had significant joint debt, and I was advised by the IVA Company that all our unsecured joint debts would be taken care of through the IVA that I was proposing alone.

This was incorrect, as the lender is chasing my wife through the courts for all of the joint debt we have, as I have now found out that the joint debt will become my wife's, even though my IVA is in place.

I have protection through the IVA, and my wife has none.

A charging order has been placed on the property for the full outstanding balances of the joint debt, and this further complicates issues, by the fact that I have promised an equity release in the 5th year. This charging order places negative equity on our home.

At my creditors meeting, I had to sign an amendment to my terms of the IVA whereby the joint creditor could chase my wife for the whole joint debt. I was in a position whereby I had to sign the amendment for the IVA to be approved. I did ask the IVA Company, who maintained that the debt would be taken care of in my IVA.

All along the IVA Company said to me that the joint debt would be taken care of through the IVA, and I now find that we have a charging order for the whole debt on our home.

Our home now has negative equity, my IVA needs amending because our income has dropped, and my wife is still being chased for the debt.

Should I go bankrupt and stick two fingers to all of these creditors, because of their greed? I just feel that I am trying my best to pay back the money I borrowed, but they want too much from me.

Should I complain to the IVA governing body, and what should I do about these idiots at this IVA Company??

Finally, if I can demonstrate through valuations, (I think I’ll get two) the equity is negative, would I still keep the house if I went bankrupt?
(My wife would probably not go bankrupt at this stage)

This is the only reason why I won’t go bankrupt, because I am afraid of loosing the home.

Your help would be most appreciated.
[:(!]

[neverending]

Wow
You really have been badly advised,why was your wife not included with an IVA of her own ??
I think by signing the amendment you may have difficulty in complaining but hopefully I,m wrong.
Who is your IVA company ??
There is a link on this site for bankruptcy advice and if I were in your shoes then I would certainly look into it.

[pm.e]

Yes, what a nightmare!.

Whats even worse, is that on my income and expenditure, my wife has monies supplementing my income to return a higher dividend.

Will I loose the home under bankruptcy?

[neverending]

Sorry pm.e,I do not have the knowledge regarding bankruptcy to answer that one.
Regards

[MelanieGiles]

Hi pm e

This is a tricky one for you. The problem with joint debts is that you are both jointly and severally liable for the whole debt.

Firstly, you should not have been given the advice that your wife's responsibility for the joint debt would have been dealt with via the IVA. Can I ask which IP firm you are using?

When I am faced with a spouse who is just responsible for one joint debt, I usually try and bind in the creditor wholly into the IVA proposal - but properly. So if that creditor does vote in favour of the arrangement, then they must have accepted the proposal, and they then get their dividend out of the IVA.

Problem arises if they don't vote - as they can argue that they did not agree to those terms. In those circumstances, I would try and offer a small sum of money each month for the spouse to pay towards the debt. This would all have to be negotiated during the 14 day adjournment period. I have done this many times and never failed to strike an agreement.

Now you have the problem of the Charging Order over the house, which your wife is presumably still going to have to service on a monthly basis. Which creditor is this, and are they seeking monthly repayments? As this is affecting your wife's share of the property, but has forced you into negative equity, I think that your IP has some explaining to do, as he has effectively scuppered your ability to comply with the IVA terms - ie equity raise within the final year.

If you do not have any equity during the final year, then that is a matter of fact and therefore there is nothing to raise. Your IP will need to explain this to creditors and the reasons why. I do not think that you should unduly worry about this, but when the IVA is over you will still have to pay the balance of that debt to remove the charge from your property. But you might always have been faced with that problem.

Personally, I would leave this to your IP so sort out, but write him a stiff letter explaining your disatisfaction at his advice, and ask him to confirm in writing his strategy for you exiting the IVA at the five year point. You should not go bankrupt, you do not need to, and your IVA will not fail because there is no longer any equity.

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

[pm.e]

Hi Melanie,

Thank you for your advice.

The firm is Clear Start, although I certainly wont be getting this!

The creditor is Northern Rock, and there was two joint debts. Recently, the court made an order for one of the debts to be paid by my wife at £47 per month. I think the other is to be charged against the property, although we dont know how much this will be for yet.

I assume that my wife will pay £47 per month until the debt is cleared?

What shall I do about Clear Start? Ask that I will be expecting them to pay up any shortfalls?

My wife has also had an IVA rejected by Northern Rock. I think they would rather have the debt secured, than agree to a discounted offer of repayment?

As the debt is taken care of by the charging order, would a IVA take care of this debt that she has to service for £47 per month?

Is it worth my wife proposing another IVA, given that Northern Rocks debt has been charged over our property?

Your help would be most appreciated,
Thx.

[MelanieGiles]

Hi again

Were Clear Start also acting for your wife? If so how many other debts does she have? Now that one of the Northern Rock debts has been secured, it hardly seems any point in your wife proposing her own IVA.

I suggest that she tries to come to a deal with NR, and if this means that your own IVA will have to be varied to accomodate her payments, then you will need to get your IP to propose this for you.

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

[pm.e]

Hi,

Yes, they acted for us both. My wife has eight debts, excluding Northern Rock.

I will contact Clear Start.

Do you think I should make a claim against them or complaint to their governing body?

Many thanks,

[MelanieGiles]

Hi again

What is your wife doing about paying her other debts? Is she in a DMP?

I am not convinced that a complaint to the ACCA can be substantiated given the facts you have provided, but suggest that you write to David Mond who is the head of Clear Start for an explanation.

Their inaction, and poor advice, has led to you having an unecessary Charging Order over your home, but unless you have their advice in writing it will be difficult to prove what you claim they told you.

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

[pm.e]

Hi Melanie,

My wife is going to try and offer full and final settlements to her other creditors.

What % do they normally accept?

Regarding your earlier point about getting my wife bound into my IVA which is in the process of being varied, is this possible?

Many thanks,

[MelanieGiles]

No I don't think so if she has eight debts, these need to be sorted out separately from your IVA. Where is she getting the money from to do a full and final settlement, and how much does she owe in total? It is difficult to advise what creditors might accept - perhaps with eight creditors she is better proposing an IVA. How much do you think she wants to offer?

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

[pm.e]

Silly answer I suppose, as little as possible.

I would suggest around 15p in the pound, plus this may increase should she can get some bank charges money returned?

Many thanks,

[MelanieGiles]

That will not fund an IVA, so better to think about other options.

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

[pm.e]

Hi Melanie,

No, sorry, I meant a full and final settlement lump sum, say 15% of their totals?

[pm.e]

Do you have any contact details for David Mond, I wish to write him that letter.

Do you need to know my IP? or is that irrelevant?

Thanks again