Please Please help me

[coco]

Hi, I have been in an IVA for 6 months the contributions has really left me struggling, I have 2 children one at full time childcare, but during the IVA meeting one on the creditors refuse to accept 23p in the & and would only accept 42P in the pound in which i had to find an extra £40 pw. The only way this way done was to remove my child from 2 days of care which my inlaw argeed to look after her, due to circumstanes i have had to put her back into full time care. I am now living below someone who is goverment handouts. I am really struggling to cope with this. I dont want to loose my house as i have put alot into this and why should my kids suffer for my mistakes. I have only £5000 in equity (i owed oringinally £64000 CREDITORS) to various creditors so they would only receive 1p in the pound if i where to go Bankcrupt. I am now considering this option but due to the little equity available would they still force me to sell the house. Please Please help me

[jamesfalla]

Hi Coco

Sorry to hear about your situation. Unfortuantely you are not alone. I have heard of a number of people who have gone along with demands for higher IVA payments from their creditors only to find that they can not afford them down the line.

Given that you have only £5000 of equity in your property, if you were to opt out of your IVA and declare bankruptcy, in my experiance you would not loose your house. Lets face it, after the cost of a forced sale, the Official Receiver (OR) would generate next to nothing for the creditors and so the sale would be pointless.

If you were to declare bankruptcy, you would have to ensure that you bring up the house with the OR. Make a point of saying that you believe there is next to no equity in it and be prepared to give in a recent valuation as proof of this (you might have to get a new one if the last one you had done was 6 months ago). If the OR agrees you should then be able to buy back your property from the court for the cost of £1 + solicitors fees

Having said this, it is impossible to guarantee what the OR will agree or not agree to do. Therefore, it is worth considering the absolute worst case senario: the OR says that you have to sell the house. This would not be palitable, but you could move into a rented property in the same area and pay probably less in rent than you are paying for your mortgage. As such, you declare bankruptcy and write off £65,000 of debt. If you have little or no disposable income, you are likely to pay nothing to the court. You will be discharged in 12 months and fee to start saving to get on the property ladder again.

Even in this worst case scenario (which i think is unlikely), I think Bankruptcy would be an option certainly worth considering.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions, with extensive experience of solving personal debt problems over the past 10 years. I am regularly featured on BBC News, Finance Programs and Radio.

Visit my blog at: http://jamesfalla.blogs.iva.co.uk

[coco]

Hi James,

Thanks for replying, during the creditors meeting i had to otain a recent vluation report (within 6 months after the meeting) which i had done 3 weeks ago and after the mortgage + 10% there is only £5000, I spoke to my supervisor recently and he said that i would have to sell the house if i was to declare bankcrupt. Do you only get to liase with OR once I have decided to go Bankcrupt or can that be agreed before the process was to begin, I want to do everything possible to keep my home but the thought of the next 2 years struggling likes this really making me anxious.

[MelanieGiles]

Hi Coco

Under current bankruptcy legislation, I do not believe that you would be required to sell your house given the low amount of equity you presently have. The test applied that if (after costs) there is only £1,000 remaining - which would be the case in your circumstances, then a Court would not grant a possession order. The Trustee could be unkind and sit on the property for three years to see if it does appreciate in value, but in the meantime you could continue to reside in it so long as the interest portion of your mortgage payments were to be maintained. You can only deal with the OR once a bankruptcy order has been made and he has been appointed.

As an observation, I find it strange that you were able to find an additional £40 per week - which clearly you could not have afforded. IP's and clients alike should beware accepting unreasonable modifications, as this can be a recipe for disaster in the long run.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[jamesfalla]

Hi Coco

It is not an easy situation. I do not believe that you can meet with an OR to discuss how your property may or may not be treated before you declare yourself bankrupt.

My personal view is that you would not have a problem keeping the house but as i said before, I can not give you a 100% guarantee. Perhaps one of the other guys who regularly post on this forum can add to this?

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions, with extensive experience of solving personal debt problems over the past 10 years. I am regularly featured on BBC News, Finance Programs and Radio.

Visit my blog at: http://jamesfalla.blogs.iva.co.uk

[coco]

Hi Melanie,

During the meeting i had to make a decision to take my child out day care for 2 days which would have given them the extra £40 PW, but due to curcumstances now i have had to put her back into full time day care so now i have to find the extra money to pay for that which i dont have.I have had to reduce my heating costs i am currently using a meter so we are all freezing at the moment , I have also had to make my son use his bike to school instead of the bus, and my husband it having to work long hours to make the rest up as we are only allowed to keep 50% of his overtime. I feel absolutley destraught that i have to live like this for the next years

[freelili]

hi Coco

I am sorry to hear that you are facing such difficulties. Did you shop around for IVA companies. It also seems that you have been proposed an unrealistic IVA, there have also been other people who have posted about unreasonable demands by Northern Rock.

I am not an expert, I just tried to propose an IVA myself and well its a long story but I and other readers might be interested in the company you chose.

Many people desperate for an answer to debt problems will agree to anything for some relief, especially a sympathetic ear, only to find it impossible, and its only through sites like this that this comes to light. Your IP will earn well from your IVA, sadly there are good and not so good companies, hopefully someone else will answer with some advice on what your options are, but I feel for you and your family.

Dont beat yourself up about what has happened.

Take care and good luck

LILY

[MelanieGiles]

Coco

When you start to compromise family life against debt repayments I think you have to give serious thought to the benefits of bankruptcy proceedings. Please don't lose sight of the fact that it is your privilige to avail of bankruptcy proceedings and that this process is entirely there for your benefit to relieve yourself from ongoing creditor pressure. Remember bankruptcy is a sanctuary away from the creditors, rather than a punishment - and given your circumstances is certainly nothing to be ashamed about.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[coco]

I like to thank you all for you advice and i am going to discuss things with my husband. The company we are using for our IVA is Synergi.

[scaredkez]

coco read some of my old posts i have had a terrible time with synergi
kerri

[scaredkez]

they tried to push me into an iva with an unrealistic monthly amount i am facing BR now because of the time scale they took to get creditors meeting, northern rock and blackhorse were my worst creditos and they told me even b4 the meeting they weren't hopeful the iva would be accepted, they haven't released any of my paperwork either back to me after several letters i have finally sent another letter this week registered post requesting my information, can i ask did you use debt councillors first?
did you pay up front fees also b4 it got accepted and how long did they take to get to creditors meeting
kerri

[coco]

I wish i had known about this site before i went into the IVA, unfortunatley when i was looking for solutions on the web i took the first company call debt counsellors who charge me £800 filled in the paperwork and submitted it to synergi, i then had to repeat all the information again so i really paid £800 for nothing. I thought my life would get better ie stress after the IVA had been approved but it has not as we are still struggling.

It took 6 months for synergi to finalise the IVA.

I had been paying money into the IVA account for 6 months, this will be included in the 60 months

[scaredkez]

what synergi did with my income /expenditure they changed everything round so i was left with the bare minimum to live on they said they done this so i could offer a better return, as i realistically only had 400 per month they pushed it to 500, i also paid them 1566 in fees as they said that would be my iva payments and would have to start now as it would look good to the creditors that i had already started to pay, they didn't tell me i wouldn't get it back if it was rejected, i feel personally this company knows these iva's are going to fail, but know that whatever the outcome they have already made money on the clients, obviously i can't prove it but that is how i feel would be very interested to hear if anyone had had a good time with synergi and are coping with the iva's that they had proposed.
i too wish i had found this site b4 them and feel i might not have been in such a mess now.
i trusted them as i was very vulnerable at the time and really needed help, my main bug bare is that up until the point of me contacting them i hadn't missed any payments but knew i would soon be struggling, as they told me not to pay anyone all my accounts have now defaulted and have gone to far down the line to try and recover, i am setting up a temp DMP as i have applied for another job if i get it it means i would be able to offer a more realistic iva later on but as it stands BR is my only way out.
kerri

[coco]

Hi Kerri,

Have you not had your IVA approved yet,

[scaredkez]

my iva was rejected, northern rock wanted me to canc life insurance (although it was a stipulation of the mortgage to have) and also payment protection so i would have to pay in another 118 per month which brought the total monthly figure to 618 i was actually going to do it even though we couldn't afford to but my other creditor black horse rejected even with the ammendments and wouldn't accept they had 26% of the vote so i couldn't get the 75% vote, i am waiting to see the chairmans report as it was a joint iva with hubby they never said what the outcome of his was as only 1 of the creditors was joint (which was northern rock) and blackhorse was nothing to do with him.
my meeting was dec and they haven't sent the report only a letter saying they could put me over to debt care to arrange a DMP when in the first instance they said this was not an option, i have asked them about this in my letter, will let everyone know what they say when i get a reply.
kerri