IVA Failing

[Sadsack]

I have a horrible feeling my IVA is going to fail. I have been in my IVA for 11 months and have really struggled to make the monthly payments. In May this year I applied to remortgage my property as there was sufficient equity to offer a Full and Final to my creditors. The remortgage was approved - in the meantime I have been unable to make payments to my IVA. This has now resulted in the IVA company taking a hard stance regarding my IVA. I do not blame them for this. They are also asking for extremely high costs which is now jeopordising the F and F. I have a second charge on my property and I am also struggling to make those payments.

Realistically, selling the property would be the best thing to do, but it has been on the market for almost a year and I have to date not had even a nibble of interest.

My next option would be to petition for BR (not something I particularly relish doing as my preference would be to pay my creditors as much as I possibly could) before my IP or creditors do it on my behalf.

My financial situation will improve quite dramatically at the end of September, as I will no longer have to make repayments of £400 per month to my employer for making a salary overpayment which they made in error.

My questions are as follows:

1. Should my present IVA fail, could I approach another IVA company to set up another, more reasonable one?
2. If this is possible, do I have to wait for the present IVA company to fail my IVA before approaching another company?

Any advice anyone can give me would be gratefully received.

Sue


Ho Hum! Think I'll bang my drum!

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

[catullus]

Hello Sue

Sorry to hear about your problems.It doesn't really affect the answers that I can give you to your questions but did your proposal have a 4th year remortgage clause in it.If so, how does remortgaging now offer the creditors anything more than what was on offer at the start of the IVA?

Moving on to your questions

1 Yes you can go to another IVA company. You need to be aware, however, that the creditors are likely to view a second proposal with rather more scepticism than the first and so the reason for a second proposal would have to be very well argued.

2 Your existing IVA would need to have failed before a new IP could act for you. You should check to see whether your proposal has a bankruptcy clause in it in the event of default because this is one way thaat your IVA could terminate and from what you say you wouldn't want that. Even if there is such a clause the IP would have to have sufficient funds (£1500?) to petition for your bankruptcy which probably isn't the case given that you are only 11 months in.

Are you on an interest only mortgage at the momement? this might be one way that you could increase your DI and help you to afford the contributions.

The other thing to say is that, as your financial situation will shortly improve, would you not be able to catch up on the arrears in which case I would have thought that your IP could find a way to stagger your payments to get you up to date.

[MelanieGiles]

I agree - IPs need to be more flexible these days to deal with the effects of the property market and increased interest rates. A variation allowing forgiveness for missed payments and a short further payment break may be all that is needed here.

You should not need to petition for your bankruptcy - common sense should prevail and you should discuss this with your IP.

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]

Thank you both for your prompt responses. To answer your questions - yes I am on an interest only mortgage. I will most certainly be in a position to catch up on the missed payments, the problem is, my IVA payments go up by £115 per month from the end of September. I am presently obligated to pay £485 - increasing to £600 after 12 months. Furthermore, the Documents Submitted to Court Under Rule 5.14, it clearly states that I propose to sell my property in the first year of the arrangement and propose to introduce £5k out of the proceeds into the arrangement. However, file notes from the IVA company give a totally different picture - and the Chairmans report says nothing about remortgaging/selling etc. The only modification was an increase from 25p/£ to 41p/£. To achieve this, I do understand that money has to be found somewhere and that is by either selling or remortgaging the property. So No, there is no 4th year clause. The only reason why I wanted to remortgage now is because I so desperately want to end this IVA, pay the second charge on the property and try and get back to some normality in my life. If I propose to make extra contributions to "catch up", I fear that I will only be digging myself into a deeper hole. The "extra" £400 per month will really go a long way in helping me pay for the increase in mortgage interest rates, secured loan increase in rates, food costs etc etc etc. To be quite honest, I have no idea how I have been surviving these last 11 months. Thank goodness for the kindness of others lending money to get hrough (they too have to be paid back) - I now find myself right back to square one where I was robbing peter to pay paul!!!!

Sue

Ho Hum! Think I'll bang my drum!

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

[tracy.h]

Hi Sue i'm sorry things seem to be going from bad to worse.
Its ironic that you are in an iva and really in the same situation as before you started.
Another case of nonviable proposal put forward by your ip.Im no legal expert but you would think once in an iva you would obviously not have money to burn but at least be able to live a life where you arent constantly on the bread line.
That is why as you know its so important to get it right and get the right firm from the start.
Obviously like many others its normaly desperation that results in excepting unrealistic iva's just to try and get back to some kind of normality,and get the creditors of your back,but in your case as you say you are digging a bigger hole and unfortunatly no further forward than 11 months ago.
I really do hope you will be successfull with a f&f offer,and that your ip will realise that this will be your only chance of getting your life back on track,and keep there costs to the minimum that is exceptable to themselfes for the extra work they will have to carry out on your behalf.
Goodluck,hope things will start to look brighter for you.
Tracy

[lily]

Hi sue

Sorry that you seem to be no better off with your IVA, could you consider dropping your sale price to increase the chance of interest? I would imagine from what you say you will have to move quick to catch up on the missed payments anyway and at the end of the day you would have to cut your losses if you were to go BR. Well I am feeling that you need to sort something out ASAP for your own sanity,this is no life for you, is it?? You need to give some seriousy thought to all of your options.

I know this is a very hard time and I feel for you, good luck

lily

[Skippy]

I'm so sorry to hear that things haven't improved for you Sue.

Regarding BR, can I just say that if it does come to that (and I sincerely hope it won't) you can hold your head high knowing you have done as much as you possibly can.

Like Lily says, would it be possible to drop the price of the house? I know no-one wants to do that, but sometimes it's a means to an end.

Have you spoken to your IP about your situation?

Good luck, and please let us know how things are going for you x

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[Sadsack]

Hi everyone - and thanks for all your kind words. To answer a few of your questions, yes, I have reduced the price of the house - by a whopping £50k!!! But nothing has happened! I had an independant surveyor come out and value the property, they gave a fair valuation, I have managed to secure an 85% LTV remortgage and there would be sufficient for me to make a F & F to end the IVA. Unfortunately, I am getting flack from the IVA company - they have registered my IVA as "suspended" on my credit file which certainly does not bode well. I have sent them my I & E where it clearly shows that I do not have any disposable income to fund my IVA payments.

I desperately DO NOT want to petition for BR. All I want is to settle this nightmare and try and get some normality back into my life. When I first decided on an IVA as my best option, I was off ill with severe depression. Having had the IVA accepted certainly does boost your morale, but the ever increasing costs of merely "surviving" is taking its toll and I know that I am slipping down that horrible road of "depression" again. The last thing that I need!

I have been going through all my papers from the IVA company and there are so many ambiguities within them, I have now taken the step and am seeing a solicitor who is also a registered Insolvency Practitioner. Will post later today as to what the outcome is as I am seeing him this afternoon. Hopefully he can advise me on the best course of action.

Once again, thank you all for your kindness and support.

Sue

Ho Hum! Think I'll bang my drum!

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

[Skippy]

Good luck for this afternoon Sue, I'll be thinking of you x

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[tracy.h]

Same as Skippy said goodluck,hope you can find a light at the end of the tunnel xx

[Sadsack]

As promised - herewith the update!!!

Firstly, what a nice guy! Ok, at my age, I should not be thinking these thoughts!!

This was a very interesting meeting - he agreed that there were many "holes" in the documents I gave him and the continual changing of monthly payments and equity release would be enough to send anyone over the edge. He is now going to write letters to the creditors, including Proxy's and a letter to the IVA company. He will forward the letters to me to make sure that everything is correct before posting them off. He seems to think that I have a very good chance of forcing the IVA company to put the proposal to the creditors (by law they - the IVA company- have to do this) and that the creditors will accept a F & F. If, for any reason, they reject my proposal of a F&F, my only course of action will be to petition for BR and I must do so immediately before a creditor does or the IVA company as the IVA company could be my Trustee. (Over my dead body!!!!)

The only drawback is that this is going to cost me £600 ex VAT but I have informed him that he will get it paid monthly!!! Which he accepted.

So now it is a case of "hurry up and see"!!!

Once again, thank you so much for your support - I think you both are great!

Sue xx



Ho Hum! Think I'll bang my drum!

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

[mish1953]

Sue - that sounds a wee bitty brighter .
all the very best
MIsh

[MelanieGiles]

That's good advice - I am sure it is similar to that I gave you a couple of months ago! - but the solicitor has the benefit of having papers to study rather than a quick snapshot on the forum.

Although professional advice costs money - sometimes it is the very best spend you can make. You now have the benefit of an impartial, independent professional opinion which has confirmed what you thought to be the right way forward. Not sure what your solicitor means by sending proxies to the creditors, but let him take the lead now as I suspect you are in very good hands.

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]

Thanks Mish - the worrying starts again tho' - hopefully all will go thru' all plain and simple and I can start living a life again and not spending my time yelling at the animals for no rhyme or reason. My German Shepherd is beginning to think I have lost the plot completely!!!

Sue

Ho Hum! Think I'll bang my drum!

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

[Sadsack]

Hi Melanie

Yes you did give that advice - I tried to work with the IP on this issue but unfortunately to no avail.

I do feel comfortable in the knowledge that I am in safe hands and am keeping everything crossed that the F&F is accepted.

Thank you for your kind support on this forum, without your expertise and knowledge, I personally feel we would all be up the creek without a paddle!!

Now I think its time for bed!!!!!

Sue

Ho Hum! Think I'll bang my drum!

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