When we bought the property last year we had a 10% deposit but with having just had the house remortgaged and with the drop in property prices we are right on the cusp of being in negative equity which is SOOOO depressing! But since we have no plans to move in the foreseeable we are happy to sit tight and hope that prices regain themselves again. But in the meantime our current product finishes next July so as you say we will have to see what deal we can strike with our current lender, bearing in mind that if things carry on the way they are we could be in negative equity. The estate agent that valued the house is part of the Skipton Building society and he said that Amber etc are having to honour mortgages despite any drop in house values to negative equity. So come next year I guess all will be revealed. And as Melanie said the IVA will have to allow for a potential increase in mortgage repayments. But your knowledge and advice is fantastic...thank you so much..xxx
Still gathering info....but hope to be on the right path pronto!!
The mortgage company is advised by the IP of the IVA as they are a creditor albeit secured. A secured creditor can revalue their security at any time during an IVA and in the event of a repossession and subsequent loss can prove their debt in the IVA or bankruptcy.
However, most mortgage lenders do not penalise existing clients who enter into an IVA but they may not offer the best products when the deal expires as they know that a remortgage would be difficult. Regardless, it is premature to worry about what will happen next July as mortgage rates could be lower and house prices may have recovered. If it is foreseen that mortgage payments will increase dramatically in the near future, your IP will factor this into the proposal but given the uncertainty in the markets at present, no one knows what will happen in the next year-never mind five years.
and a thank you to you too Michael!! I really do appreciate everyone's input! It's SOOO helpful. Now if you could just handle a rather persistant credit card caller (3 guesses that its MBNA) who has rung my mobile 3 times this morning!! Well I used to love Roller coasters but as I get older they always make me feel a bit sick and boy is this one roller coaster IVA ride! lol...xx
Still gathering info....but hope to be on the right path pronto!!
Just keep ignoring them - I've been ignoring MBNA for over 2 weeks now since they realised I cancelled my direct debit. The constantly call my home and work numbers. I have now written to them informing them to deal through my IP so hopefully they will pack it in. We are playing direct debit ping pong at the moment - they have reinstatated the direct debit THREE times since I cancelled it, and I have subsequently cancelled it three times. Hopefully now they might take the hint that I dont want it reinstated!
My creditors took no notice of the fact that I told them I would only deal by letter, not phone. I just ignored the calls.
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
Blimey how can they reinstate a direct debit? Are they your bank then? We were late with a payment to MBNA a couple of months ago before we got involved with the IVA process and they were like dogs with a bone where the phone calls were concerned. I wouldnt mind but they phone my mobile but it's my husband they want to speak to and yet they still keep phoning my number even when I have told them not to!! I have had the letters ready to send to all the creditors but have held off sending them til we had the business and personal bank accounts approved. Now that they have the green lights I will get the letters out too. Think hubby will also call the creditors to tell them too. Are you a big dipper fan??? lol.....looks like we are at about the same stage of the process and in the same capable hands it would appear!
Still gathering info....but hope to be on the right path pronto!!
Car finance companies have to be informed and it is a technical breach of a hire purchase agreement to enter into insolvency. However, the main hire purchase providers are not concerned with IVAs provided the proposal makes an allowance for the HP payments to be maintained and that any arrears are cleared pre IVA or very quickly afterwards. Some smaller HP companies have threatened repossession even when the payments were up to date but this is usually resolved easily when the IVA process is explained to them.
Fifilebonbon, MBNA are not my bank, just one of the many I owe money to. The direct debit is for a personal loan. As they hold your bank details, they can apply to my bank (Natwest) to reinstate the direct debit. Natwest inform me there is nothing they can do about this, as they just act as the middle man. So, I just keep an eye on it each day and keep cancelling it as they keep reinstating it. There is no money left in the account for them to take anyway, as all my direct debits have been transferred away from Natwest now, coz I owe them money too.
Re the car finance, I wouldnt be overly bothered if they did re-possess as I have been looking into going back into my company car scheme anyway so that I know that once I am in an IVA, I wont have any unexpected repair bills to worry about, or finance payments, or insurance/servicing/MOT costs. I am looking seperately into voluntarily ending the finance as I have paid more than half the required payments, and I understand you can just hand it back at this point.
There is a total misalignment of expectations over mortgage lendings and provision.The old rules are tossed out and and a re-entrenchment of who qualifies for loans and who don't is still been worked out. A real mess you could say! With the 'forced' reduction of SVR and Tracker rates on the banks Home loans the Banks are repricing their lending risk with due dilligence and it will work against many I say. I tell you my Brother lived in Japan, teaching English(TEFL) as a foriegn langauge in the era of 1% interest rate(now 0.30%??) and he saids that no one was flocking to buy houses then as their Banks only lend to low risk people. Whether the UK will follow this price risk assessment as interest rate crashes to 2% by next Spring I wouldn't like to say.
Until the rules are clear, we have lamb dress as mutton on all mortgage deals.....
Kalla is right that Japanese banks only lend to low risk individuals, and that is why they have been largely unaffected by the credit crisis, certainly not as much as western economies have been. They have just reduced rates to 0.30% from 0.5%, where they had been for a couple of years. Its the latest attempt to stimulate consumer spending, and also weaken their currency which has been strengthening against western currencies, which makes Japanese exports appear more expensive, and Japan relies heavily on exports to the west for economic growth. Japans problem is that if you take food and energy prices out of the equation, they have been in deflation for the best part of a decade, which is why interest rates have been kept so low. The bank of japan doesnt want to encourage people to save money, they want them to go out and spend it, so there are no incentives in place for Japanese people to save. When an economy is in deflation however, it means prices generally are going down, so Japanses consumers have not been spending because why would you buy a TV today, when it might be cheaper tomorrow? Then when tomorrow comes, why buy it then when it could be cheaper the next day? Once prices of consumer goods start to turn and move back in the other direction, watch Japansese men running for cover to avoid being trampled on by the rush of Japanese women to the shops trying to buy stuff before the prices get increased!![:D]
