NEW IVA?

[Gerrard ST]

Hi All,

We are currently in the process of discussing/deciding if an IVA is an option to our debt problems. I would like to ask, if we decide to apply for an IVA and the IVA fails, can the creditors force you into bankrupcy? What would happen if at the creditor meeting the IVA failed and we didnt want to accept debt management? Could we walk away and try and sell our property privately?

Thanks

[MelanieGiles]

Hi Gerrard and welcome to the forum

Creditors can potentially force you into bankruptcy by petitioning, however they rarely do as this is seen as throwing good money after bad. They would probably rather pursue you directly than this to be frank.

If the IVA fails you are really back to the starting blocks with one option removed. Then you could declare yourselves bankrupt, enter into a DMP, or do nothing - but the latter will just bring more and more creditor pressure, potential charging orders and general upleasantness. How much do you owe to creditors and what is the value of the equity in your property?

And do remember that over 80% of all IVA proposals put in front of creditors actually are accepted.

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

[Gerrard ST]

Hi and thanks for the prompt response.

My partner and I owe around £60k with around £30k in equity.

We do like the idea of an IVA and understand some of the consequences.

Melanie, are you saying that if the IVA fails we could still walk away from the creditors meeting, return home and put our property on the market? sell it, pay the £30k equity off our debt and then rent a property? and then continue to pay the remainding debt? Is this possible?

[MelanieGiles]

Entirely possible - and quite the best outcome for creditors as they would get their debts paid off in full. If you are mindful to do that, why not go with with plan and avoid insolvency proceedings altogether?

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

[Gerrard ST]

We love the house!!

We really dont want to move, its our dream property!!! but we would rather move as a last resort, than be forced into bankruptcy, but we would also prefer to go into IVA rather than more!!!

Thanks Again.

[MelanieGiles]

How much disposable income do you have available to offer creditors in an IVA on an ongoing monthly basis, bearing in mind that you will be required to raise equity in your property during the final year on top of contributions?

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

[Gerrard ST]

Melanie

Our current situation is as follows:

CHILDCARE 366.00
ELECTRICITY (estimated) 40.00
GAS (estimated) 30.00
PHONE + BROADBAND 20.00
COUNCIL TAX (estimate) 130.00
CONTENTS/HOME INSURANCE 27.00
LIFE INSURANCE 43.00
MORTGAGE 1527.00
WATER 31.58
TV LICENCE 11.61
Car insurance 40.00
Car tax & maintenance 35.00
Fuel 20.00
Sky 21.00
Food 200.00

TOTAL EXPENDITURE 2555.19

TOTAL INCOME 2798.93

Hence leaving us with £243.74 disposable income. We could possibly reduce some of the items(Broadband/phone to £20; no sky; remove car maintenance and only pay £10 for car tax and possibly cancel life insurance (would this be classed as non-essential item?) In which case our disposable income could increase to £345.74

We owe £56k (3 loans and 9 credit cards) and are currently paying out £1400 for debt repayments only. This leaves us £1200 in minus every month. We really do not want to lose our house as we love it and are positive its value will increase significantly in the future due to its location but cannot carry on like this for much longer. We still have about £20k of credit available to us which is probably why we have never realised our situation until yesterday when we looked through our finances properly. As mentioned earlier - we really do not want to go down the bankruptcy route, hence hope we have a case for an IVA?

Also, hope you could advise us on the following: I am due a payrise in April - probably around £200 nett - would it be worth waiting with an IVA until then so we can show a more realistic Income/Expenditure ratio (by which time we will probably have incurred another £5k of debt)?

Would the fact that we have not missed any payments yet and that we still have credit available to us go against us when considering an IVA?

Many thanks for your help

[Gerrard ST]

...correction to previous post - current BT Phone/broband is £33...

Sorry

[Beechy]

Hi
Your shopping for 2 addults and is it one child? and Fuel look very conservative (less than £5 a week).

You indicate equity of £30k--- what the Value of your house ad the outstanding mortgage?

I think you need to talk to someone as soon as possible, as dont want to be taking on additional credit you know you cannot repay.

Dave Beech

[MelanieGiles]

An IVA monthly payment of £345 plus a final year equity release based upon further lending at 85% loan to value ought to produce a viable IVA, however I agree with Dave particularly on the issues of housekeeping, which does appear very low.

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

[Beechy]

Hi Melanie
I was with a broker the other day and they indicated that some lenders are now at 72% LTV. The broker said this figure is changing every week, have you come accross this?


Dave Beech

[MelanieGiles]

The brokers I use report that there is an improvement on loan to values, and that they expect the market to settle down by April 2008. Let's hope so!

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

[Beechy]

Lets hope they are right.

Personally I think there is a longer journey to travel.

Part of the problem stems from the way the debt has been packaged aand sold on, nobody knows what the package contain and the future default rates they contain.

The uncertainty for the lenders could go on for several years (depending on the loan periods).

Ok some risk analysis can be do based on the previous performance but to do this you need historical data to work with, and at this time it may be to early to project.

Again, I hope you Brokers are correct in their thinking as the market does need to settle down

Dave Beech

[Gerrard ST]

hi again

There is 2 of us and our little boy. Re: fuel - I have a company car which we tend to use, £20 allowance was for my partner's car to get her to/from work. So are you saying £200 house keeping allowance isn't enough for a family of three? We would be expecting help from family when it comes to clothing etc. And we know they'd be willing to help every now and then. So shouldn't we wait for the payrise? Does our situation seem reasonable?

[Beechy]

Personally I would like to see the IVA stand alone although it is very kind of your relatives to assist.

I dont think based on the information provided you should wait for the pay rise as the debt will increase.

I am not allowed to solicite for business on this web site but if you did contact my office through our web site I would look at the situation

Dave Beech