Well... we just heard from CCCSVA that our IVA proposal has been rejected (Damn Northern Rock) We were offering 42p in the pound over six years. They have advised Bankruptcy. We have to arrange a telephone meeting to discuss this. I'm pretty scared about this! .
Our house is in negative equity by about £5000 (our home was recently valued at £90000) and our car is only worth about £1500. I'm new to this and wondered how our home will be affected? I can cope with most things but I couldn't cope with losing my home.
I'm also unsure as to whether the mortgage is included in bankruptcy?
Any advice/tips are greatly appreciated.
Not sure if this is relevant but here is my SOA...
Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 940
Partners monthly income after tax....... 1300
Benefits................................ 125.3
Other income............................ 0
Total monthly income.................... 2365.3
Monthly Expense Details
Mortgage................................ 676
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 101
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 27
Telephone (land line)................... 12
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 25
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 26
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 40
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 18
Contents insurance...................... 0
Life assurance ......................... 22
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1759
Assets
Cash.................................... 0
House value (Gross)..................... 95000
Shares and bonds........................ 0
Car(s).................................. 1880
Other assets............................ 0
Total Assets............................ 96880
Secured Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 95526....(676)......NaN
Total secured debts........... 95526.....-.........-
Unsecured Debts
Description....................Debt......Monthly.. .APR
aa loan........................12000.....233.......6. 9 Joint
m and s loan...................12000.....196.......NaN Joint
black horse loan...............7500......160.......9.9 Joint
topshop storecard..............90........5.........28.9 Mine
studio ........................300.......20........0 Mine
kays catalogue.................220.......30........0 Mine
look again catalogue...........500.......60........0 Mine
tsb loan.......................1000......37........17. 9 Mine
tsb credit card................1500......40........15.9 OH
tsb credit card................2000......40........11.9 Joint
northern rock loan.............5500......85........10.9 Joint
northern rock loan.............6000......85........7.9 Joint
Total unsecured debts..........48610.....991.......-
Monthly Budget Summary
Total monthly income.................... 2,365.3
Expenses (including secured debts)....... 1,759
Available for debt repayments........... 606.3
Monthly UNsecured debt repayments....... 991
Surplus(deficit if negative)............ -384.7
Personal Balance Sheet Summary
Total assets (things you own)........... 96,880
Total Secured debt...................... -95,526
Total Unsecured debt.................... -48,610
Personal net worth...................... -47,256
*I have deleted the link on here as it is advertising and is not allowed.*
Last edited by whatevertodo on Wed Dec 03, 2008 5:00 pm, edited 1 time in total.
Hey whatevertodo, so sorry your IVA was rejected, do you know the reason why?
In BR, You can get a friend or family member to buy out the beneficial interest in the house for £1 plus solitors costs. This will mean that you can keep the house but you must keep up your mortgage repayments as your mortgage is not written off.
Sorry to hear that you have been rejected, not good news.
If your house is in negative equity, you may not lose it. You would have to keep on paying the mortgage though. Your car would probably be ok as well as long as you can prove that you need it (for work for example).
You may also have to pay a portion of any disposable income in BR for three years. Depends on how much you would have left.
It's not as bad as you think.
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
Northern Rock have already started proceedings for a charging order, plus we hadn't made 12 full payments on one of the NR loans. Black Horse also rejected because of this reason. CCCSVA thought by extending to 6 years this would help, obviously not!
I wasn't aware of beneficial interest though, thanks for that.
Hi
Another option to consider would be to drop into a debt management plan for a while and then try for an IVA again.As NR will become a secured debt they will not be part of any future IVA.
You were offering a very good divivend, over 70p.
In a DMP your creditors would have received a full return in just over 6 years, same period as the IVA
Regards
Without knowing the ins and outs of things, Andy seems to have made a couple of good suggestions to avoid the last resort of bankruptcy, whereas your IVA provider has just said "we recommend bankruptcy", which is a bit concerning
Sorry to hear your IVA application was turned down, we had the same experience. Although we do not have mortgage worries we are dissapointed none the less. I would suggest the DMP route as a holding method and re evaluate your options later.
You want to find out from the lead creditors why they have said NO to the IVA as an offer of 42p to the £ is good in these difficult times.
They have been people offering less than that.I like to hear what the forum IPs would say about this case.
In the meantime if I was you I would try to up the offer to 50P to the £ by cutting your I/E.IVA is a better option than Bankruptcy and your offer is decent I say.
I would think very carefully and look at bankruptcy, it may not be as scary if you actually know what is likely to happen. Many in negative equity have remained in the house for £1 plus £211 costs.
Its all very well to say just up your limit but if your not able to offer any more then the IVA isnt viable.. Also I know I am no expert on all things IVA but even I know that Black horse will reject a proposal if the loan is less than 12 months old.
Good luck to you, read all you can and make an informed choice about the way forward.
Hi
Were you paying £626 per month ? over 72 months this would give a pot of 45k, less IP fees of 7k would leave 38k on debts of 48k, a dividend of nearly 80p in the £
Where does the 42p dividend come from ?
Is it from each of you ?
Like Lily says I would think carefully about BR. If you've got no assets it would give you the chance to draw a line under your debts and start again. I would think very carefully before agreeing to cut back your expenditure to make an IVA fit - 5 years is a long time if you're struggling.
I can see that the BR route is an option but I do not feel it is always appropriate to all people. I think it is very personal to the individual. You have to remember that you have certain restrictions placed on you in BR that an IVA does not have.
I refer to Directorships and SchoolGovernorships as an example.
I totally agree with Skip, if your best offer isnt good enough you have to start thinking about your next possible option. If youre status or extra activities such as being a school governor is going to be affected then obviously BR is not an option.
Good luck.
Last edited by freelili on Thu Dec 04, 2008 12:56 pm, edited 1 time in total.
It is a well known fact that NR will not entertain an IVA proposal where a customer has not yet made 12 full repayments, so I am not sure why this was put forward in the first place. Black Horse also have a policy of generally rejecting IVA proposals for the same reasons.
Andy - where do you get the 70p dividend from, as the poster states 42p in the £.
