sympathetic creditors?

[argento]

hi,
does the reason why the debtor got into financial difficulty make any difference to a creditors decision on whether or not to accept an IVA proposal or do they simply look at the return offered to them? Does it matter how you spent the money before proposing an IVA?
My wife and I owe 57k (30k on credit cards). Not to bore you all with the details but in a nutshell, when my wife became pregnant three years ago I borrowed money on my mortgage to build an extension to our home. Costs over ran and (unfortunatley) before the roof was completed our house was flooded in a storm. Our son was due a couple of weeks later and so I had to use my credit cards to repair the damage (new kitchen ceiling, rewiring the whole house, plastering, etc...) When it was complete and my wife was on maternity leave we had to use our credit cards to pay our credit cards minimum payment. Eventually, I proceeded with an IVA proposal when I couldn't get a loan to clear the balances.
Our IVA offer is 26% return as opposed to 2% in BR (All of the credit card debt is in my name as well as our personal loan which accounts for 16K and so if the worst comes to the worst I and not my wife would go BR!)
I am worried that creditors will want a better return and assume that I won't go BR if the IVA fails even though I've already been advised that because of my level of debt that a DMP wouldn't be suitable.
Any advice on creditors reasons for accepting or rejecting IVA's?
P.S
The 26% return is based on 72 months at £350 a month. It dosen't include equity release which we may be able to do in four years and therefore increase our creditors return!

[Adam Davies]

Hi
Your IP will write a brief note within our proposal as to the reasons that you came to be insolvent.They should accept the best offer on the day and if they see that an IVA is a better solution than bankruptcy or a dmp then you should be accepted.
I can,t see your reasons having a detrimental affect on their decision but be prepared to have the equity release clause put forward as a modification by your creditors.
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

[argento]

cheers Andy,
About the equity release. Obviously we would agree to it but if for some reason in year four a mortgage lender would refuse us the extra money (maybe because our combined income is to low to afford the ammount required) and it isn't our fault would that break the IVA proposal or would we simply carry on paying until year five is up?
Also we have a car valued at £3500. I believe in BR you can keep a vehicle worth £1500. Would the creditors ask us to sell our vehicle and pay into the IVA whatever amount we get over £1500?
Thanks for the advice!

[Oliver]

If you were unable to release money you would be able to make this defecit up through continued monthly payments.

As long as you can show you need your car i.e. travel to work etc... then I can't see the IP having a problem with its value.



Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[argento]

Thanks Oliver.
I thought the car wouldn't be a problem. But if I had to increase my creditors return by a few % then I would be more than willing to do this by selling the car (probably to a relative!!!)

[iva experts]

If in the 4th year no equity can be released then your I.P may have to increase the length of your IVA to make up for the loss.

Best Regards. IVA Experts

[MelanieGiles]

Creditors will be interested to know what has led to your financial difficulties, and do occassionally allow their view to temper their vote, but on the whole they stick to the commerciality of the proposal and whether it represents a better outcome for them than bankruptcy or a Debt Management Programme.

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

[sonyse2t5]

I've heard of gambling debts been accepted in IVAs.
Most of popular themes of debt problem is to do with use of CC to supplement spending, and robbing Peter to pay Paul due to Ememployment, sickness etc.

Lenders have seen it all. Just give your Creditors the best offer! They only see ££ signs.

[argento]

thanks for the advice.
Great site this!