IVA v Going it alone!

[Sheepylamb]

Hi all I have been watching this forum for some months now whilst my IVA was being prepared. I'm amazed at how much my return to creditors have been reduced by IP fee's - So my question is I have found another site that gives you example letters to send off to creditors to offer a full and final settlement - Does anyone have any experience of doing this? Is this wrong to try before entering IVA? Haven't paid any money yet to IP although is asking for it to be sent back with signed proposal. Or should I use as a back up plan? Over the months I have been reading posts the impact of an IVA has really sunk in at first it seemed like a great rescue from my creditors - I don't have NR but I do have HSBC and after costs my divi will be less than 40% - Before costs 52% Any thoughts gratefully received?

[Adam Davies]

Hi
The main advantage of an IVA is the fact that you are protected from further action and interest from your creditors and in most cases the saving on interest and charges is more than the IP costs over five years.
You can go it alone but trying to get all your creditors to agree to a monthly payment and stopping interest will be very,very difficult.
Don,t let the IP fees put you off entering into an IVA if it,s the right thing to do because at the end of the day in 99.9% of cases its the creditors that pay the IP fees.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[iva experts]

Welcome to the forum Sheepylamb!

How many creditors do you have? and how much is your debt amount?

You could try approaching the creditors yourself, however Andy brings out a good point that it could be increasingly difficult to get all creditors to agree, if there are many of them.

Best Regards. IVA Experts

[iva_squirrel]

Good morning,

I agree with both Andy and iva experts. If you have many creditors,it could be very difficult to get all creditors to agree. However if there are not many creditors and you decide to deal with them yourself, There are a number of helpful steps to follow:

1. Notifying Creditors
You should let the organisations you owe money to know as soon as
possible that you are having financial difficulties. Inform them that you are drawing up a financial statement and that you will send them a copy with a proposed repayment plan.

2. Drawing up a Financial Statement
Look at your total income and outgoings and put them into a written format so that the information is clear and easy to understand.

3. Prioritising Debts
Common debts include rent/mortgage, council tax, utility bills (gas, water, phone and electricity) and credit debts. You will need to know the total amount owed to each creditor.

4. Negotiating Repayments
You should already have sent letters to your creditors letting them know what you are doing. Now that you have worked out your disposable
income, you should be in a position to negotiate repayments. If you have one or two debts you should be able to divide this up quite easily.

Kind regards,


Julia Simavi

Shortlisted with special commendation for Debt Counsellor of the Year by Credit Today Awards 2007

View my profile:
http://www.supersonicsquirrel.net/julia ... rofile.asp

Visit my website:
http://www.supersonicsquirrel.net

Credit Today Awards 2007 http://www.credittoday.co.uk/awards/winners.htm

[simon.b]

Hi Andy

The way we've made our offers is that once agreed, the agreement is that no further action can be taken nor interest added. At the moment there is probably about £350 a month in interest and charges being accrued but should it take three months to sort out, that seems the better option for us.

It does seem a real pain though to be able to speak to the right people and try and get soem answers!

[Sheepylamb]

Thanks for the replies - The experts appear to be saying stick with IVA proposal we have 7 creditors in all with debt of £120K (Makes me go weak a the knees!)
I guess we should sign the proposal and return it then!

[MelanieGiles]

With that level of debt I feel it is very unlikley that you will be able to offer an informal offer of settlement to the creditors which will suit all of them at the same time. An IVA is therefore probably a more favourable solution for you. Are you offering them a lump sum settlement?

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

[Sheepylamb]

Hi Melanie - No we are not offering a lump sum settlement through the IVA the proposal includes £19K plus payments of £500 per month for 6.5 years - I think we had got it into our head that because MBNA keep writing to us saying they would settle for a much lower figure, we would write to them all asking if they would accept a much lower amount to settle with the £19K and those that didn't enter into informal DMP with them, and that they may accept this as they wouldn't lose £11K in IP's fee's,also I know from reading the forum posts that 36pence in the pound is below what HSBC accept but there's is a small porportion so could be out voted. I think we might keep this as a back up plan in case the IVA gets rejected - Would you think that this was sensible?

[MelanieGiles]

Hi again

HSBC informed me yesterday that they may be prepared to relax their hurdle rate of 40p in the £ if an IP is prepared to follow their preferred fee charging policy - so I don't really feel that your 36p in the £ - would necessarily be a problem.

The benefits and certainty afforded to you by the IVA procedure ought to be given serious consideration, and don't forget that it is your creditors who effectively fund the fees - you would pay over the same regardless of whether you do an IVA or a DMP.

Can I ask why your payments would be over 6.5 years? When five years s generally the norm?

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

[Sheepylamb]

Thanks Melanie, I made a mistake, I was thinking about 60 months and wrote 6 - it should read 5.5 years the extra 6 months is to fund the equity in the house. Can I just ask another question please? We are at the stage where the draft proposal arrived yesterday if we decided to change IP's or not go through with an IVA would we have to pay any fee's we have not paid anything so far but have been asked to return cheque for the first IVA payment, but we have already signed the Company's terms and conditions?
Thanks for your help.

[MelanieGiles]

You should not have to pay any fees to your current advisor, if you decide to change practitioners or decide on an alternative procedure. But do check the terms of any contractual documentation to be sure.

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