MBNA Offering Help??

[northumbrian69]

MBNA are one of my creditors, they have blitzed me with phone calls for 2 weeks now, I have written twice explaining I am applying for an IVA but the phone calls keep on coming. I got a call from a Debt Collection Agency (on behalf of MBNA) at work today, the guy was very aggressive, just pay up, not interested in your problems.
Well I've just about had enough of this so I thought, 'to hell with it', I rang MBNA Customer Support and spoke to a really pleasant guy, he was really sympathetic and helpful, I just don't can't get my head around what he is suggesting:
He said you should never go down the IVA route because it is far too expensive, he wants me to ring him back with all my financial information and he said MBNA could sort out my finances without going down the IVA route.
Now I'm desperate for help but this seems too good to be true, both CCCS and Grant Thornton have advised me that an IVA is the best solution to my problem, this guy disagrees.
He's obviously up to something, has anyone else had dealings with MBNA or had this sort of reaction from a creditor, up to now MBNA have been really aggressive.
Advice would be appreciated.

[MelanieGiles]

I think you should continue to negotiate to see what he says - but they may well not take account of your other debts in suggesting a settlement figure.

It is important that you do this if MBNA represent more than 25% of your overall debts, as they appear to be rejecting the majority of IVA proposals being put forward at the moment where customers are not negotiating with them directly before proposing the IVA. We are all working on them at the moment, but it will be interesting to see what they suggest.

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

[DebtDummy]

northumbrian69, I did have a similar offer last year from HSBC. They offered me another loan to consolidate ONLY their products. The interest rate was 12.9 %. It made no sense to me where this would improve my financial position in the long run.

Let us know what MBNA is offering. Gosh, this *is* interesting.

All I have left is my humour.

[thebear29uk]

Hi all

I spoke to MBNA today as I'm waiting to propose my IVA. They informed me that an IVA was not always the best solution. I explained that they were one of 9 creditors and getting all of them to agree terms outside an IVA would be very difficult whereas being bound by an IVA would protect me and my creditors.
I owe them £23,500 but they are willing to offer me a settlement figure of £9400. This would give them a return of approx 40p in £. I explained that my IVA would return more than 60p but they seemed happier to settle now. As they have over 25% of my debt and are currently declining all IVAs I'm looking at doing this. As I understand it if they put in writing that they are aware that I'm going for IVA but would prefer to be kept out of it then they cannot ask for more if the IVA dividend to my other creditors is higher. Also I'm not favouring them as the other creditors in the IVA will get more than 40p.
I will be speaking to them tomorrow to see if they will confirm in writing and post the outcome on here.

Dave

[kezza]

Hi Northumbrian,

I had that from MBNA, I have to say although the phone calls have been very frequent they were very polite and helpful. i suppose it's luck of the draw who you get to speak to.

They wrote to me with the advantages and disadvantages of IVA an dealing with them, I have to say that the disadvantages they listed for an IVA was not quite how it actually is as they were implying that interest would not be frozen and you would end up paying more. This may be so providing you have no other creditors but then you would not be in an IVA if that was the case, and why are they underthe impression that interest would not be frozen in IVA????????

[neverending]

Guys
This tactic is a little alarming because once MBNA have over 25%of your debt then they really seem to have complete control.The danger is that, yes, you may be able to agree something with them but what about your other creditors and what if they change the goal posts some way into the agreed arrangement.
The main plus side of an IVA is the security that it brings from your creditors ,the peace of mind and light at the end of the tunnel.
I can understand bears situation but Nothumbrian69 unless MBNA have over 25% of your debt I would suggest continuing with the IVA.Afterall MBNA will give you biased advice and as Kezza has shown it may not be factual.
regards

[jamesfalla]

I have seen the standard letter / e-mail that MBNA are sending out to clients who say that they are proposing an IVA. I think that it is very much aimed towards MBNA getting their money back rather than offering rounded advice about the options that people have for dealing with debt.

I am not convinced that all benefits of a Debt Management Plan that are listed are strictly beneficial over and above other solutions. For example to be able to potentially clear all debts within 5-10 years is clearly a benefit by itself. However, it is not so beneficial compared to Bankruptcy or a successful IVA. eg if you have no property, and decide to declare bankruptcy, than all your debts will be cleared within 12 months. If you agree and complete an IVA, your debts would be cleared in 5 years.

It is suggested that a downside to proposing an IVA is that the cost will be up to £7000. This is of course true, but we have to remember that this cost is born by all the creditors themselves and not the individual debtor. As such, the debtor is not out of pocket.

The note I have seen also suggests that if one proposes an IVA and this is rejected, then you could face potential enforced bankrutpcy. I do not believe that this is correct. If you propose an IVA and it is rejected, then you are just back to square one. You still owe what you owe (possible slightly more with additional interest and charges that have been incurred). You then need to decide whether you are best off going for a Debt Management Plan or Bankrutpcy. However, no-one is going to force you to do either of those things if you do not wish.

James Falla
Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk

[thebear29uk]

Hi all

Just to clarify my position MBNA are saying that £9400 would close the debt and it would show on my credit file as "settled". I would still be looking at doing the IVA for my other creditors but by removing MBNA from the proposal I would have more chance of getting the 75% yes vote.

I have received a few of the IVA vs MBNA pros and cons letters but this offer was by a telephone conversation.

The only way I would proceed would be if they confirmed this in writing and there was no way for them to "move the goalposts later".

Dave

[i_a]

Have had exactly the same thing from MBNA but they have about 15% of my debt in total.

As my total debt is over £100K and to over 15 creditors there is no way I would negotiate with them individually.

They are okay on the phone - not aggerssive - but I am very firm with them and just say my IP advises this is not suitable and they will have to wait for my proposal.

If they do not accept then I will go bankrupt and they will get virtually nothing so they will lose out not me!

[kezza]

Be carefull of preferential to one creditor as this could have a detramental affect on an iva application!!!

[thebear29uk]

I've been informed that as I'm offering more in an IVA to my other creditors I'm not showing preferential treatment to MBNA. As an update I spoke to somebody today asking that this be put in writing. I.e. They are aware I'm proposing IVA to my other creditors which should return more than their settlement pence in the pound and that they want to be excluded from the IVA and the payment figure agreed will be a "short settlement" which will show on my credit file as "settled" and that they could not make any further claim once any IVA was running. The person I spoke to felt this would be a formality but the decision maker would call me back to confirm the amount.

If I propose an IVA where MBNA has more than 25% voting rights and they reject it all my other creditors could possibly end up with little if I decided to go BR. By using my cashed in endowment policy to take them out of the voting process it hopefully ensures that if my proposal seems beneficial to my other creditors they will get the best return from me possible.

I'm hoping I've understood this correctly but if anyone knows different please let me know.

Dave

[Lapdog]

My first post on this forum and this seemed as good a topic as many.

My IVA proposal is being drafted at the moment and like most i have received calls from all my creditors (understandably , i do owe them money afterall )but MBNA are by far the most persistent. I'm in a luckier situation than most in that i don't need them to say yes to my proposal to ensure it is accepted although obviously it would be better if they did.

However their tactic with me is to try and convince me that an IVA is actually a bad thing because my credit rating will never recover even after 60 months payment has been settled. To be fair they have not been rude or threatening so on the last occasion i was contacted i just pointed out that i have no intention of actually using credit again anyway and in fact it would probably do me a favour if i am never offered credit again. I thanked her for her help and advice in conviincing me that an IVA was exactly the right step for me. I haven't received a call from them in the last 7 days [;^)]

Just like to say thank you to all the regular contributors on this forum, i'm sure it is as big a comfort for others as it is for me to gain not just valuable information and advice but also to know we are not alone in our predicament.

[go_4_broke]

Hi Lapdog, good to hear from you.

Out of interest, what did MBNA suggest you do INSTEAD of an IVA ?

-Best

New to the forums - but not to debt !

[Lapdog]

Cheers for the greeting Go 4 Broke.

She said to me that they had several payment plans which would help me, which i thought a bit odd given that she had no idea how much i actually owe and to how many creditors?

My situation is slightly different to a lot of others in that technically BR would be the best option for me rather than an IVA, but i do genuinely want to make an effort to pay as much back as is possible and yet still see light at the end of the tunnel. Therefore the threat of BR from creditors isn't intimidating for me as ultimately it will cost me a lot less.

[MelanieGiles]

Your situation is no different Lapdog. 90% of my clients would be "better off" going bankrupt, but morally they don't want to and wish to repay their debts to the best of their ability. The problem with MBNA is that they do not appear to be actively supporting IVA proposals at the moment!

Good luck with your own IVA, thank you for posting and don't forget to let us know how you get on!

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