IVA help and advice needed please!

[whatevertodo]

Hello All? Here goes...

We currently owe £58000 on unsecured loans/credit cards to different creditors, we've just hit rock bottom. Since having my two children we have basically been living on credit! We recently wanted to consolodate with First Plus (which would have solved our problems) but we are apparantly in negative equity, We've spoken to all our creditors by phone and explained our predicament, most can't help till we are in arrears by 3 months. Northern rocks advice is to cancel our direct debits!!!!

I've recently contacted CCCS who suggested an IVA but the IP thinks that Black Horse (a consoladation loan) will not accept the IVA as we've only had the loan for six months, but as this isn't the largest value it shouldn't matter?!

This makes me worry because we've only had one of the Northern Rock loans since November. The IP thinks they'll want another year adding on to the five years. They're sending the paperwork out today. I am worried because that takes it to 6 years with the prospect of releasing equity after 4 years, (would this be added to my mortgage for the last 10 years of its term?)
We will be paying back £550 a month on the IVA..

Depending on the charge for the IVA we will still owe about £25000 of the original debt when the IVA ends. We're in negative equity by about £1000 at the minute, What chance is there that we will have to remortgage the full amount in X years time?

I'm also worried about our fixed rate ending in 2010, Our current rate is 5.29% (with Northern Rock) Will we have to pay a higher rate because of the IVA?

Urgent Advice Needed! I don't know what to do for the best?
(Apologies for long post )

[MelanieGiles]

Hi there and welcome to the forum

A rejection from Black Horse is not necessarily going to happen, I got an accepting proxy from them for one of my cases today, but you should be wary of an IVA if their debt is more than 25%. I assume that the IP you have instructed has already discussed this with you.

All IVAs for property owners these days will carry the requirement for your property to be revalued during the final year, and any equity over and above 85% loan to value, subject to a mimimum figure of £5,000. As you are in negative equity at the moment, your property will have to significantly increase in value or your mortgage decrease to warrant any money being raised.

You are right to worry about your fixed rate ending in 2010. I build in a staggering of payments downwards at that time based upon you paying the NR variable rate, but I wonder what you have been advised by the IP you have already spoken to in this regard?

[whatevertodo]

You are right to worry about your fixed rate ending in 2010. I build in a staggering of payments downwards at that time based upon you paying the NR variable rate, but I wonder what you have been advised by the IP you have already spoken to in this regard?

Thank you for your quick reply.

We haven't discussed this with the IP yet, we've got an interveiw tommorow.

How would "building a staggering of payments" work? I'm new to this and struggling to understand a few things[:I]

And from experience would we be charged a significantly higher rate by being on an IVA?

[MelanieGiles]

I can only speak for what happens in my own insolvency practice - where we would reduce the payments to the extent of your increased mortgage payment at the end of your fixed rate. It is unlikely that NR would charge you any higher than the variable rate if you are in an IVA - but you will need to check this out with them directly.

Hope this helps.

[john.jk]

Hi Whatevertodo !
New to all this as well
But i would highly recommend you contact Melanie's company ! They are setting up our iva at the moment and have been very good so far and the people that you speak with are very friendly and helpfull !!! IVA not put forward as yet but fingers and toe's crossed x