Mortgage Interest Rates Increase

[SLM]

Hi
I've just had an IVA accepted with my husband, 4 months of stress & no sleep! We were delighted with this news, however, have since discovered that our income & expenditure has increased by £93 due to an increase in our mortgage & secured loan due to recent interest rate increases.
We telephoned our IP today to see if our IVA payments could be decreased by this £93 & were told we would be sent a form to complete & our creditors would need to vote again.
We are now really worried we may be rejected second time around & as much as we are concerned about the extra increase per month, we really are committed to paying off our debt.
What do you think the chances are of this reduced proposal being accepted? We are really scared as we don't want to lose our home.
Please help someone!

Looking to a debt free future!

[MelanieGiles]

Hi SLM

Pity you and your IP did not take account of interest rate rises when the proposal was put forward. This is going to be a real problem if rates continue to rise, for peopole in rigid IVA proceedings.

Unless you have the 15% leeway modification, your IP can only accept lower payments if he calls a creditors meeting and yoru creditors vote in favour of a reduction. So long as your reasons for seeking a variation are genuine, and increased mortgage interest rates are widely known, then you ought to be successful, so long as you are hitting minimum dividends required by your respective creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[BlueShoes]

Hi Melanie,
If a creditors' meeting has to be called to vary the IVA payment in light of mortgage interest rate increases, and there are 10 interest rate rises during the life of the IVA for example, would the additional costs of calling several meetings not lead to an IVA being extended by long periods to cover the costs of these meetings? Am I right in thinking a variation meeting with creditors costs approximately £1000 a time?
Just wondering!
Thanks
Blue

[Adam Davies]

Hi blue shoes
You raise a good point and one that both your IP and creditors should have seen coming.It,s ridiculous to have to call a meeting just a few months in because of the costs involved.Common sense should build in a flexibility to allow for both increases and decreases in mortgage rates without the need for a costly meeting.

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

[MelanieGiles]

And common sense on the part of the IP would be to call one meeting giving leeway for future interest rises to be absorbed as and when they occur. So one meeing ought to do the trick if the correct resolution is presented.

Andy you make a good point, but there is no way creditors will allow that sort of flexibility at the time of the first creditors meeting.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[iva.com]

Hi SLM,

Congratulations on getting your IVA proposal approved. Now that you are there would you consider posting a review of your IVA firm at www.IVA.com? This could help those considering an IVA to make the right choice for them.

Good luck with reducing your monthly payments.

Kind regards,
Terry Balfour
IVA.com

IVA.com - The IVA Comparison Site
100s of reviews, All IPs and IVA firms rated.

Use our IVA firm comparison tool to find best IVA firm for you:
http://www.iva.com/iva_comparison_1.asp

[SLM]

Hi
Thanks everyone for your messages. I wish I'd known about this forum before as I don't think I would have gone with the IP I'm with!
I'm really disappointed to hear my IP didn't build in flexibility with the mortgage interest rate increases, surely that is standard practice?
I have another question, should our creditors reject this new reduced amount, can we just revert back to the original payment even though I know we will struggle? We really don't want to be pushed into this but on the other hand, we are desperate to keep our house & don't want to go for BR.
I think based on the replies, we will try for these reduced payments as it is a genuine request can provide copies from our mortgage provider and secured loan creditor to prove this. I really hope our creditors will look favourably on this request.
Thanks again everyone

Looking to a debt free future!

[Adam Davies]

Hi
If the variation is declined by your creditors then you would just revert back to your original proposal.If this is the case make sure that any overtime you earn first stays with you,to pay the increased mortgage cost,and then any remainder is split with your IVA provider.
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

[SLM]

Thank you for your help. I'll let you know how I get on.

Looking to a debt free future!

[SLM]

Hello again,
Well I am still having difficulty with this one. I phoned my IP last Monday to request a modification & they said they would send a form. Waited & waited for this form to only not receive it so my husband called again on Monday, to which they apologised for this & said they would send another one. However, letter received yesterday but no form inside! The letter was basically saying "we review on an annual basis & at such point we will look into this", basically "thanks but no thanks". I called them yesterday & they made me feel as though this proposal wouldn't be accepted as we are so new into our IVA agreement. I did say we have supporting paperwork to demonstrate the increases so they have reluctantly agreed to contact our creditors but said this may now take 4-6 weeks. I'm disappointed I am now almost 2 weeks delayed in this process as we asked this to happen last week & still are no further forward.
I'm feeling really dispondent as my IP made me feel as though we are wasting our time as the creditors will probably say no.

Looking to a debt free future!

[MelanieGiles]

You do need to be patient with your IP, who is probably a very busy person at the moment - but I agree they could be a bit more supportive. Variation meetings do have to be scheduled into an ever busy workload, and a 4-6 week wait does not appear to be unreasonable.

IP's do, however, have to review cases as and when the need arises - even our regulatory body insists on file review at least twice per year, so to say that they only do this annually is not appropriate. Even if it will take a little while to put your offer before creditors, I feel that you need a little more support from this firm that that which you appear to be getting.

And there should be no set time period for a variation. If circumstances change then this is a matter of fact - to say that it is too early into the IVA to put forward a revised offer is ludicrous, and down to your creditors to decide whether an amendment is necessary given the full facts on which to pass judgement.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[OPTIMIST12]

Melanie -

Your post rightly points out that circumstances can change at any time and at any stage. Does not SLMs post illustrate that (for those people who have it) the often mentioned "No Variation in the First 24 Months Modification" does not take account of events just such as this.

I know you have said that you rarely get this mod in your cases now but I just cant see the logic as to why it was ever introduced at all. Surely a responsibly varied IVA is better than a failed IVA if the Creditors saw fit to accept the proposal in the first place. Luckily it sounds like SLM does not have this modification.

Was there much discussion about this modification when it was first introduced - or perhaps in the early days of IVAs there were too many early variation applications?

[MelanieGiles]

Absolutely - and funnily enough I have my first variation to prepare over the next couple of weeks which contains this ridiculous modification - so we will see how that goes!

There was quite a lot of discussion about the modification when it first reared its head, and I took advice from one of the top insolvency lawyers - who is also a District Judge - who agreed with me that it is largely unenforcable.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Skippy]

I'll be interested to know how that goes Melanie as I had that stupid modification and it was the main reason that I couldn't vary my IVA. I would have been happy to extend my IVA so that I returned the original dividend but it didn't make any difference.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/