seems now that 1 year on I am no better off

[suz_]

Hi, I entered into an IVA last year. all my credit accounts were still being paid at that point, so although I owed alot of money I had no defaults. once I started the IVA process I was told to stop paying my creditors. My IVA did not go through for another 4 months (july 06).. so I now have 4 months of defaults on my credit records. My IVA was a full & final settlement financed by remortgaging. A certificate of completion was issued in Oct 06. However on recently checking my equifax report, 3 accounts still show full balances & 4 months of defaults even though they have received thousands of pounds in the settlement. I have contacted one company with all the copies of completion etc and they have yet to respond. Another company who did not reply to any comunication thoughout the process (and therefore got no payout) are refusing to change my credit report.
I thought that creditors had to update my report by 28 days following certificate of completion, balances would be zero'd and there would just be the completed IVA on my file for the remainder of the 6 years.
If this is not the case, I think I have been hugely mislead in being told to stop paying creditors, as I would have not have the 4 months of defaults recorded.
I am trying to rebuild my life now, I would like to move house (downsize)to get a cheaper mortgage but my bank are saying it is the defaults registered against me still that are holding me back not the completed IVA.
Can you tell me what should be shown on my credit report? Do creditors have a legal requirement to update the settled accounts after completion ? etc etc It seems now that 1 year on I am no better off, I now have a whopping mortgage, all these defaults and amounts still owing on my credit report

[MelanieGiles]

Hi suz and welcome to the forum

As you were insolvent when you entered into the IVA, you were probably only up to date with payments as a result of "robbing Peter to pay Paul", so the fact that you have four defaults on your credit record whilst the IVA was being prepared seems irrelevant to me. You are in an IVA because of a debt problem, so your credit record is marked accordingly, and the references to the IVA in any case will remain present for six years from the date you entered into the agreement in any case. How would you have continued to make the contractual payments to creditors whilst you were putting forward an IVA. If you could have afforded to do this then you would not have been insolvent?

I do not feel that you have been misled at all by the insolvency practitioner who was advising you, and surely you are better off not to be carrying the burden of debt your were originally carrying. Other experts, with more direct experience of the credit scoring industry, will be on line later on to give your further advice on the removal of these entries.

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

[suz_]

thanks for the reply, I was just about holding my head above the water as far as my debts went, but knew I wouldn't be able to keep up for many more months. I could probably have kept paying up to the court date.
It may seem irrelevent to you that these defaults are registered, but I am trying to rebuild my life & according to HSBC it is the currently recorded defaults that are causing a problem not the settled IVA. (I am aware that the IVA is recorded for 6 years)
If the defaults, along with the balances get removed from my credit report, then they will become irrelevant.
It is a burden off my shoulders to be debt free, but I now need to move house (downsize)and reduce my massive mortgage to keep me debt free long term.
As per previous posting, I thought within 28 days of completing the IVA my credit report would show no outstanding balances or defaults, it would just show the satisfied IVA.

[Storm]

Lenders are under an obligation to report fact.

If the lender closed your account at the point of or prior to your IVA - the final status is the outstanding balance and default.

The lender who didn't recieve any payment from the IVA is reporting fact ie: outstanding balance and default.

The fact that you entered an IVA will remain on the credit file for 6 years as will the account conduct from the lenders.

There is a formal resolution process which you can persue - Experian / Equifax / Callcredit all have details on there website or your final option would be to persue the matter with the Information Commissioner.

This document is useful to anybody who wants clarity on data held by the CRA's

http://www.ico.gov.uk/upload/documents/library
/data_protection/practical_application/credit_explained_leaflet_2005.pdf

[Adam Davies]

Hi
Defaults on your record will not stop you obtaining a mortgage but it will prevent you from getting a High st bank to finance you.There are many sub prime lenders offering competitive rates but you will need to use a mortgage broker.
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

[suz_]

thanks for your replies,
I am a little confused, On completion of the IVA we owe zero ?
but the credit report says we still owe ?
shouldn't there be something at least to say its settled ? otherwise how is that fact ?
the accounts were not closed until after the IVA went through because that was another battle in itself. All accounts except 1 recieved a settlement figure, if any balance shows - surely it should be minus the settlement ?
The company that was included in the IVA but did not respond - (so did not get a settlement) do we still owe the balance or not ?

I'm worried now :-/

[Storm]

Lenders are under obligation to report the status of your account and any balance for the duration you have an account with them.

Lenders have different opinions of the final status in an IVA - the status settled would be used if you make all contractual payments / settle the account in full.

The credit report doesn't say you owe anything - the credit items should have a last reported date on them and should reflect the status of your account at that time.

It may seem harsh but you will only get a correction if the data is factually incorrect.

As Andy states the defaults / IVA will become pretty irrelevant with the majority of sub-prime / near prime lenders but they will be looking for a deposit (between 10-15%) and you will pay a slightly higher interest rate.

There will be a more significant impact from the defaults if you attempt to obtain credit such as credit cards, hire purchase or store cards.