Just wanted to give an update on this as we have had some conflicting information from the bank as to how we move forward. Hoping someone can help.
So after contacting the bank regarding this loan they have said that my wife must continue to make the full monthly repayments of the loan as normal - so we have managed to find the money through readjusting things to be able to pay this each month.
This week my wife was going to make a payment for this months amount (she only missed one payment when the IVA was being set up in Sep) However the bank have now said that she can't pay this debt on a monthly basis and if she doesn't come up with the full amount in 18 days to settle the loan then it will be passed on to a debt collection agency who will not pursue the settlement of this loan until after my IVA is complete - i am guessing with a lot of interest added on!
So my question is are HSBC allowed to do this? From everything I have read on here and elsewhere is that my wife must continue to make the monthly payments of our loan as well as it being in my IVA. So we have managed to make allowances for this and now they are saying we cannot do that. Its almost like they want my wife to go into default rather than just pay it as per the original agreement.
I am hoping that this latest information we have had is wrong and that we can continue to pay this - any advice would be great!
If your wife continues to make the contractual payments on a joint debt then the Bank cannot default her. The whole point of joint and several liability is that each signatory is 100% liable for the entire debt and if one defaults then the other must pay.
The problem may lie in the missed payment which the Bank is using as an excuse to default her but one missed payment is not normally enough for this type of treatment. Perhaps if she was able to make the arrears payment she could then continue with the monthly payments going forward and if necessary you could reduce or suspend your IVA payment to help her do this.
Thanks for your reply - i thought this was the case.
As we seemed to get passed around different departments when we phone up for information (my wife is 33 weeks pregnant btw so could do without all this!) Do you think we would be just as well phoning up the dedicated number to make payments and see if they will allow my wife to pay this months payment and set up a new direct debit?
I suspect this is because the agreement has been breached. Try to tug on their heart strings and PR. Explain she is pregnant and as you are in an IVA there was confusion about continuing to pay this. Perhaps suggest if they won't accept a reasonable repayment plan you will go to the press. Banks done like bad PR - they get enough of it already!
I don't want to rain on your parade but HSBC are not known for being the most sympathetic of banks (personal experience!!) but hopefully they will help you out.
Congratulations on the impending new arrival!!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Thank you. It just baffles me that they have said this to my wife - especially when she is wanting to continue making the repayments and bring the account up to date. Can't see why they wouldn't allow her to do this?!
I don't know - they are such a pain. When we went for help they told us that we had to take out a remortgage (which we foolishly did) and everytime our loan payment was due they took it out, put it back in and charged us!
I do hope you can get this sorted out.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Nor can I so you need to speak to someone who understands what is being proposed. If you do get this resolved then there is another issue which you need to take up with your IP. If your wife repays the debt over the term of your IVA she would then be entitled to make a claim against the IVA. HSBC will be listed as a creditor within your IVA but once they have been repaid their dividends will stop and your wife can claim her share.
Is there anything in the terms that says when they may terminate the agreement, what if the wife just so happened to pay the late payment into the account right now, so it is recorded on the records/statements . If and when you come to argue this with the FSA and complaints team surely anyone in their wrote mind would say "but they made the payment, what's the problem ?"
As for always dealing with different people on the phone, could I suggest this is now done all in writing and keep a copy of everything, so there is a clear audit trail on it. I'd be inclined to phone up, get a name and address and ask which department you need to write to . Then write to them and say as per previous telephone conversation the missed payment has now been paid, we trust this puts the account back into a satisfactory state,My wife is pregnant, this stress is not needed, please can you write to us to confirm the account is now in a satisfactory state, due to our pending arrival all correspondence must now be in writing only relating to this matter as we are concerned for her and the health of our unborn baby the stress from the phone call is placing upon us etc etc.
If they come back and are going to play the contractual breach card, ask for a copy of the signed terms to confirm the back took all steps it is supposed to do in the event of s missed payment, I'm pretty sure one missed payment to calling in the debt is not the allowed process. (You could get lucky imagine if her signature wasn't on the agreement. Lol).
Good luck with new arrival, I hope this gets resolved quickly.
P.s maybe there is something in the agreement that says if either party becomes insolvent they are permitted to.......?
I know its a long shot but would it be worth her entering an IVA to become interlocking agreements (so long as agreements bound by old protocols) ? Then HSBC portion of the loan payment simply gets distributed to all creditors ? Their loss ? I. Guessing her credit file is shot anyway with you being financially associated ? Was this discussed when you first took out your own IVA on the jointly liable debts ? (Still can't help but feel you were not given all the facts at the outset) ?
Ps and further to what michael said above, if she is paying the HSBC debt and that is included in your IVA as a creditor isn't that preferential treatment of one creditor and against the rules ?
Last edited by longslog101 on Thu Oct 22, 2015 12:08 am, edited 1 time in total.
My Blog details, the route I took before IVA, how I choose my firm, equity release advice (year 4-5), challenging the CRA's keeping IVA on credit file once gone from insolvency register
IVA ended August 2015. Would recommend McCambridge Duffy
It would not be a preferential payment as the poster's wife is obliged to repay her debts. It would only be a preference if the poster paid the debt or if his wife paid it while not paying her other creditors.
so in the situation above lets say for example OP has a debt of £15000 to HSBC and the loan repayment was £300 a month and the loan is in both names, what normally gets filled on the IVA application/proposal/agreement for the single party in the IVA regarding a joint debt ? Does the proposal list the debt in full of £15,000 to HSBC, or only half of it, or not at all ?
If it is listed in any means but being paid by the OP wife, what happens of she clears the debt prior to the end of the IVA, DO HSBC still have a claim over the dividends or indeed are they entitled to vote if there was a requested for example at a F&F in X years time after original agreement but their debt has seen repaid 100p in the £ ?
Just curious... sorry about slight topic drift. IS this a normal scenario, what do you guys do in this situation generally when there is a joint debt and only one party goes into IVA ?
My Blog details, the route I took before IVA, how I choose my firm, equity release advice (year 4-5), challenging the CRA's keeping IVA on credit file once gone from insolvency register
IVA ended August 2015. Would recommend McCambridge Duffy
In the scenario you describe we list the full £15k as a debt within the IVA and HSBC are entitled to a dividend based on the full balance. However they will still be receiving the monthly contractual payment from the spouse so the debt will be cleared before the IVA completes.
Once this happens HSBC are no longer entitled to any more money from the IVA and are removed as a creditor. The spouse is now introduced as a creditor in place of HSBC as they have cleared the debt. However the spouse is only introduced for a claim of £7,500 and not the full £15,000 as it was a joint debt and she would have paid back half anyway had her husband not entered the IVA. The monthly dividends are then recalculated based on the new reduced overall balance.
It can get as complicated as you want it to be in that you could recalculate the dividend every month based on the reducing balance of the loan but we are not paid enough to do that!
My Blog details, the route I took before IVA, how I choose my firm, equity release advice (year 4-5), challenging the CRA's keeping IVA on credit file once gone from insolvency register
IVA ended August 2015. Would recommend McCambridge Duffy
So just had clarification from HSBC that my wife can continue to make payments to service the loan. However as its included in my IVA she will still be filed a default against this loan. Can they do that? What are the implications of this to my wifes credit score? I know my IVA will have affected it anyway but is this in anyway going to impact it further?
Just seems unfair that my wife will get a default even though she is willing to continue paying it.
It shouldn't affect her in the future once the IVA is completed but obviously it will impact now.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
