IVA-Who togo with?

[vad921]

Hi all,
Have posted on here sometime ago but I've managed to keep my head above water with my travel expenses from work!! However, for the first time ever, this month I have been unable to make the minimum payment on a credit card. I did pay a token £100 (should have been £210) and Lloyds appear ok with this. But I do need to sort it out. I'm considering an IVA but I just don't know who to go with? You hear so many stories of bad practice! My unsecured debt is around £25k and I have aprrox £10k on car loan. Can car loans be included in IVA's? I'd be happy to lose the thing!

Thanks
David

[carlmcmullen]

Hi David,

If it is a car loan then yes it will be included into the IVA which does not mean you will loose your car.

However you say you would be happy to lose the think - is there a reason for this, do you need it for work or is that it is just a fuel guzzler ? Or do you simply just not like the vehicle

If it is a car loan and there are no repossesion rights on the car then you may want to consider downsizing or selling and getting a cheaper (but relaible one) and introducing any additional moeny from the sale into the IVA if you really dont want/need it anymore.

You may want to check out www.iva.com were you will be able to read many reviews about IVA companies and help you make an informed choice of who to go with.

[MelanieGiles]

Hi there

It sounds as if you have more of a debt management problem rather than a debt problem at present, and I would not have thought that an IVA is appropriate for you at present.

Take a good look at your finances. Write everything down that you earn and spend - including payments to creditors. Are there any areas where you could make any economies? And would it benefit you to switch your balances to 0% interest for a time so that you actually see them reducing - word of warning, though, don't move balances from one creditor to another if you feel that you may be unable to pay in the future.

Are you due a pay-rise at work - and could you generate some short-term cash by de-cluttering at home and selling unwanted items on e-bay? And what about where you live - are you an owner or renting? If the latter could you find somewhere cheaper.

Also look at cheaper utility and mobile phone providers as well. If you treat this as a project for the next six months you may be suprised at what you actually can save and therefore reduce your creditor balances accordingly.

[Skippy]

If you do switch to 0% credit cards, make sure that you cut up the orginal cards and close the accounts! Not doing that was part of the reason I got into such a mess.

[vad921]

Thanks for the posts. I do need a car but more so than my wife and getting rid of a car, if I could, would be one way of saving money. Besides, I'm paying £300 a month on the car loan! I don't think it is a car loan as such because I carried about £3.5k over from my previous car so I think it may well be just a personal loan. How can you tell?? It is with Santender.

Unfortunately it is more then debt management! More than half of my salary goes in paying a secured loan with First Plus. I'm about to make a complaint to the Financial Ombudsman to try and get the PPI taken off. This itelf is £200 per month. On top of that I pay (monthly) £210 lloyds credit card, £140 Virgin card, £170 Northern Rock ( Coooperative Bank), £15 Asda card. On top of all that I pay Council tax, energy,insurance home & car. It is crippling me!! Most of my wifes salary goes on the mortgage plus she has her own debt too which she struggles to pay. I also try and pay for the weekly groceries and by eating at my parents we can get by with about £40 per week. Pretty good for having two kids too!!

Ever since we took out the First Plus loan two years ago our credit record was hit and we have never been able to get a credit card or loan from anywhere. I can't therefore move my credit card debt anywhere.

Quite honestly we cannot cope financially at the moment. We have far more going out than coming in. As it get towards the end of the month I dread to go home expecting to find the letter from the bank saying my direct debits have not been paid. This happens more often than I dare admit.

It definitely got worse late last year when both Virgin(MBNA) and Northern Rock both reduced the credit limit on my cards to the point where I actually didn't have a available credit to spend. These were both done on the basis of a 'silent' scan of my credit record and I was deemed to have 'enough' finance. So, I have no fall back and no savings.

The worst decision we ever made was taking out the First Plus secured loan. We ended up taking a loan three times what we actually wanted because they said the amount we requested would fail their application as we wouldn't fit within their funding criteria. And then, they 'expected' us to take out their PPI because it was such a large amount; they slapped it on the loan itself and is now costing us in excess of £200, just for PPI! I was looking forward to a reduction in interest rates for the First Plus loan but despite the reduction, by the Bank of England,First Plus actually put their rate up again!!

It is so depressing.

[MelanieGiles]

Firstly the car loan - what does it say at the top of the agreement - hire-purchase, conditional sale, fixed term loan or anything else?

I am afraid it is not the first time I have seen someone regretting taking out a secured loan - the glossy advertising looks great, happy families playing football and falling over scooters, and then the reality kicks in!

From the additional information you have now provided it does appear that you have more serious issues, and I would strongly recommend that you contact an insolvency practitioner to discuss things on an individual basis. There will be more than one option available to you, but it is important that you fully consider the advantages, disadvantages and implications of each one on you, your home, your children, your career and most importantly your future.

[caraf]

Hi
We have a secured load with FIRST PLUS too and again like you it is the worst thing we have even done. Our PPI insurance is 137.00 per month. Crippling !!! and yes we just recently received a letter from them putting up there rates and monthly payment. We have been with them for some 5/6 years and they have never once brought it down.
Does anyone know what we could do to get rid of First plus and perhaps save money as well

[MelanieGiles]

If you are in an IVA Caraf, then reducing your loan payments will merely increase your IVA payments, so you will directly not benefit.

[vad921]

Hi
We have a secured load with FIRST PLUS too and again like you it is the worst thing we have even done. Our PPI insurance is 137.00 per month. Crippling !!! and yes we just recently received a letter from them putting up there rates and monthly payment. We have been with them for some 5/6 years and they have never once brought it down.
Does anyone know what we could do to get rid of First plus and perhaps save money as well

What First Plus don't tell you is that the PPI policy is only for 5 years but the payment, unless you use the cashback, is for the duration of the loan i.e. anything up to 25 years. Staggering really. Neither were we told that we couldn't cancel it. All they 'advised' us to do was not to cancel the PPI within the 5 years otherwise we would lose what we had paid, which is fair. However, try canceling it and because the premium was bought up front and part of your loan, they give only a fraction of the money back therefore affecting your monthly payment very little. This means that we cannot move this secured loan for another three years (we have been paying 2 years)to take advantage of lower interest rates and equity in the house. It is financial slavery. I don't know how they get away with it.

[vad921]

Firstly the car loan - what does it say at the top of the agreement - hire-purchase, conditional sale, fixed term loan or anything else?

I am afraid it is not the first time I have seen someone regretting taking out a secured loan - the glossy advertising looks great, happy families playing football and falling over scooters, and then the reality kicks in!

From the additional information you have now provided it does appear that you have more serious issues, and I would strongly recommend that you contact an insolvency practitioner to discuss things on an individual basis. There will be more than one option available to you, but it is important that you fully consider the advantages, disadvantages and implications of each one on you, your home, your children, your career and most importantly your future.

From what I have read and from previous advice for these forums an IVA seems the best solution. Especially if I can include the car loan and my bank overdraft (read this somewhere). The FirstPlus debt would remain even if we declared ourselves bankrupt as it doesn't include secured loans. I doubt if First Plus would allow us to sell our house to pay part of their loan off and move into rented accommodation as the remaining loan would become unsecured. If I approach a company re an IVA would you consider these to be 'insolvency practitioners'????

Many thanks

[vad921]

Hi David,

If it is a car loan then yes it will be included into the IVA which does not mean you will loose your car.

However you say you would be happy to lose the think - is there a reason for this, do you need it for work or is that it is just a fuel guzzler ? Or do you simply just not like the vehicle

If it is a car loan and there are no repossesion rights on the car then you may want to consider downsizing or selling and getting a cheaper (but relaible one) and introducing any additional moeny from the sale into the IVA if you really dont want/need it anymore.

You may want to check out www.iva.com were you will be able to read many reviews about IVA companies and help you make an informed choice of who to go with.

Thanks Carl. A very useful site. Cleardebt have good reviews.

[Adam Davies]

Hi
How much is your house worth and what is the value of the outstanding mortgage and secured loan ?
If you approach large IVA providers then it is unlikely that you will actually speak with the IP.You need to find a smaller company to speak directly with the IP
Regards

[vad921]

Hi
How much is your house worth and what is the value of the outstanding mortgage and secured loan ?
If you approach large IVA providers then it is unlikely that you will actually speak with the IP.You need to find a smaller company to speak directly with the IP
Regards

There's probably about £30k equity in the house (mortgage) and we never get statements from First Plus so I can't say exactly at the moment. The original secured loan was for £72k but then they put £20k worth of PPI on to it. We've been paying it about two years and 3 months. Does this help?

[Adam Davies]

Hi
So you are in negative equity to the tune of 40-60k,if this is correct and you are unable to meet all your contractual payments then you need to consider bankruptcy.The shortfall of any secured debts in bankruptcy,once the house is sold,would form part of your bankruptcy so would be wiped out alongside your unsecured debts
Regards

[vad921]

Hi
So you are in negative equity to the tune of 40-60k,if this is correct and you are unable to meet all your contractual payments then you need to consider bankruptcy.The shortfall of any secured debts in bankruptcy,once the house is sold,would form part of your bankruptcy so would be wiped out alongside your unsecured debts
Regards

Yes, I suspect that figure is about right. The thought of losing our home is very,very depressing. How do secured debts work in bankruptcy. I understand they aren't covered so would we need to stop paying the mortgage to ensure it is covered under bankruptcy?

One other thing re bankruptcy. Is your employer notified? I appreciate notifications appear in the local press but does the OR inform your employer automatically?