Totally confused now, back to square one :(

[mummy2elliekate]

Hi all, I can't sleep because something is bugging me regarding the IVA we have just signed up to. Apologies if this doesn't make much sense as my head is all over the place at the moment. This is very long and detailed!

Me and my partner are in debt to the tune of around £21,000.
After doing an I&E we agreed with our IVA company that we could afford to pay £105 a month, plus half of our quarterly bonuses when we receive them. This would work out at about £500 per quarter which would significantly boost our payments. We have a car on HP which is due to end in just under 4 years so we agreed that when we finish paying the HP we would increase our payments into the IVA, with the extra disposable income, meaning our payments would go up from £105 a month for the first 4 years to £317 a month for the last year of the IVA.
None of the paperwork we were sent made this clear, all it said was that we could afford £105 per month with an uplift to £317 after 4 years. There were lots of terms and conditions etc and lots to sign but no specific information about what happens to our bonus or any windfalls. So it appears to have been presented to the creditors that we would pay £105 x 48 and £317 x 12. This would mean we would pay around £8800 back, which is a lot less than we owe, so naturally I was worried that our proposal would be declined. Even though there was a small mention in the notes on our statement of affairs that we receive bonuses, there were no figures. My thoughts were that if the creditors could see that we were boosting our (quite low) monthly payments with £500 every quarter, that they would be much more likely to accept our offer. This would see a return of around £18,800 which would be almost all of what we owe, which I thought was more than reasonable as we would be paying as much as we could afford and after 5 years we'd have almost cleared our debt. We have no assets at all so our proposal highlighted the fact that creditors would see no return if we were made bankrupt.

Our creditors meeting was on the 7th March and we got the phone call in the afternoon, whilst I was in a busy dentists waiting room for an emergency appointment as seemingly overnight I had managed to produce an abscess on my jaw the size of a golf ball and I felt like my head was about to explode. I was nearly on the floor in pain, despite taking many painkillers - I wouldn't wish a tooth abscess on my worst enemy. Couple this with a toddler that wouldn't behave and the dread of this phone call coming in at any minute, I was just not in the right frame of mind to process any important information. The timing was terrible!
So the call came at a very bad time (obviously not their fault!) and my other half answered the phone as it hurt too much for me to talk. He couldn't have a proper discussion about our finances as we were in a quiet waiting room full of people, so he went and stood by the door and surprisingly within a minute he was off the phone. He told me that our proposal had been accepted - for a 6 year IVA.

He was told that some paperwork would make its way to us, which I was hoping would be sooner rather than later as this didn't seem right to me and I wanted clarification of what was going on and wanted to know why our IVA was longer than usual.
If we have a 6 year IVA, by my calculation this means that would be paying in just over £24,600 - much more than what we actually owe!

I am not very happy with this as I now feel there was not much point in going for an IVA and have a feeling our bonus payments may have been missed off somehow, resulting in our creditors wanting to extend by another year to get as much as possible back.
I would have thought they would have happily accepted a 5 year IVA had the amount and frequency of our bonus been disclosed.

I haven't actually spoken directly to my IP before and when I call the company I speak to a different person each time. I don't know who I should be asking for. I am going to make a phone call in the morning to tell them I am not happy with the 6 year IVA but is it now too late?

I am going to be up all night worrying about this now so thought I'd write this massive essay to get my thoughts out there.
If we are going to pay back more than what we actually owe instead of our debts being paid or partially "written off" after 5 years, which for us was one of the good points of an IVA over a DMP, then I'm not sure if I want to continue with this whole thing... but I fear it may be too late now. Does anyone think they would renegotiate for 5 years? Why would the IP put forward a proposal that meant me paying more than what I owe?

Again, apologies for the huge post and if anyone has actually took time to read all of this, I appreciate it very much. I'm just in a huge panic as my IVA company aren't the most approachable and my partner doesn't 100% grasp this whole thing so I feel rather alone right now. I will somehow muster up the courage to call them tomorrow, but until then any ideas or advice would be more then welcomed as I don't know whether I have the right to do anything at all now.

Sarah xx

[abbiesmum2003]

Morning Sarah. I dont know too much about this 5 or 6 year iva thing as only just started this myself but I wanted to say well done for facing up to your debts in the first place and you will be glad you found this forum if feeling alone. My hubby doesnt fully get the iva thing either but is coming round to all the formality it carrys. Im sure someone more experienced will explainthings to you or have something more constructive to say. Hope your feeling better following absess issue...b***** painful thing to have hun. Try and get some sleep xxx

[mummy2elliekate]

Just to clarify, our IVA company has a copy of our bank statements showing the amount of bonus we receive and they were told that the bonus was quarterly and we would pay 50% of it into the "pot", and with it being a high amount in comparison to our monthly disposable income, I'm surprised it wasn't even noted as an amount on our paperwork and potentially not on our proposal either.
A 5 year IVA is long enough, without it being dragged out even longer I am just hoping they will be able to do something about it as I gave them all the necessary information, and eventhough our bonus is estimated it has always been somewhat predictable in the 6 years I've worked for the company. I don't think extending it to 6 years is fair to be honest and with this in mind, if it can't somehow be changed to 5 years, I feel that an IVA is perhaps no longer our best option. Where do I stand?

[mummy2elliekate]

Awww thank you so much hun, I saw your post about your first payment being made. Well done and good luck with your creditors meeting, I have my fingers crossed for you. You're with Mel's team aren't you? I'm very jealous, she is fantastic on here and if only I'd found this forum first I probably wouldn't be having these doubts. I was referred onto my IVA company by another company so unfortunately I didn't get chance to choose who to go with (I didn't know I could at the time) but if I did I definitely would have picked Mel, hands down. Despite only having made a couple of posts I have been lurking on this forum for a few months now I don't think my IP or even my IVA company in general posts on here which is a shame, I'd love the one to one contact with my IP (I'm a worrier!) but the way things have gone so far I don't think i'll ever be getting that benefit
And about the abscess... they gave me antibiotics which improved it a lot but as soon as I finished the course it's started to flare up again. Went in again today (or yesterday rather) and they put a filling in for now but it's going to be another two weeks before I can get the root filling that I need to fix it properly so until then I just have to hope it doesn't get as bad as it was. Both my bottom wisdom teeth are coming through somewhat awkwardly now too so at the moment I kind of wish I had no teeth at all! Not a good couple of weeks so far but ah well xx

[Hyperdrive]

M2EK - does the sixth year relate to equity held? Ours is 5 years plus another year due to equity in our house, have a look over your proposal?

[plasticdaft]

Were you ever given other options to sort the debt?

Paul

[ClareSilver]

You may not be paying more than you owe. How much are the Nominee & Supervisors fees. The most you will pay back is 100p/£

[MrsR]

Hi Sarah,

IVA's get accepted with different dividends, so myself for example am paying 23p/£, whereas other s pay 100p/£. This is calculated using your income and expenditure, and not forgetting that fees are also generated from that figure to pay the IP.

Sometimes, depending on the debt, you will pay back the full balance plus fees - BUT remember that your debt is being managed, which is why you looked into an IVA in the first place, no more interest or charges are being added during this time and you are protected.

If you looked into a DMP, it may appear to cost less, but again they will add charges and interest, and it may take longer to pay back.

Personally, I suggest speaking to your IP asap !

[Daniel Griffiths]

Hi Sarah

I can understand how you feel about this and you have given alot of information about your circumstances hopefully one of the IVA providers on here will see this shortly and comment as to your options and whether an IVA was really for you. Having an Insolvency solution like an IVA against you on your credit file for the future is a serious matter and should only be taken when you have no choice in the matter, a frozen DMP (if possible) with someone like Pay Plan, or a commercial debt management company may have been worthy of consideration, also like you say why was six years agreed by your nominee when in bankruptcy they got nothing five years is long enough.

[mummy2elliekate]

Hi everyone, thanks for the replies
Hyperdrive - we don't own a home, we rent so it's not equity related. I'm sure it was just because the offer in our proposal was low.
Paul - based on the fact that we wanted this over with in 5 years, especially because we will be renting a home for the forseeable future, and because our I&E would see us with no money for anything like christmas or birthdays etc it's just bills and IVA, the 5 year term and having the interest frozen (as that's all we've been paying off on our cards for quite some time) was the reason I picked an IVA. There is no reason why we couldn't have chosen bankcruptcy technically but I wanted to pay back some of my debts and not try to avoid doing so.
I just don't see the point in a 6 year IVA when the creditors would have got back a massive sum of money back with a 5 year agreement and although I'm not sure, I think it's because of the bonus issue. I also was told to refininace my car at the end of the HP so that I could pay the balloon payment at the end and this is why my monthly payments would go up for the last year, but I know nothing about refinancing and that's assuming Honda would even let us. If they won't then we'd be in a lot of trouble having no savings to pay this balloon payment and we would have to give the car back, be in negative equity with it and owe them money plus not be able to get to work! So this is another issue that is bothering me but that's another story!
If any IP's can tell me where I stand regarding renegotiating the length of the IVA so soon after the meeting that would be great. We will be offering a lot more than the final figure specified in the proposal and I feel that our offer may not have been represented in the best way.
I know it's taken me a week to go through all the figures and realise this but due to not having the paperwork yet, my terrible tooth pain issues and being at work I just haven't had a clear enough mind. Is it even possible for them to renegotiate my proposal or am I now stuck in an IVA i'm not happy with due to what seems like a small error?

[Shining]

Is Northern Rock a creditor?

[mummy2elliekate]

Plus what I'm worried about is that if our wages go down/bills and costs go up etc which they most likely will and we end up having to pay even less per month, they could extend it for even longer. Our bonus per quarter actually works out at more than what our IVA payments would be per quarter so I'm surprised this wasn't highlighted as a figure in huge letters in the proposal! I think they've just done it as £105 per month and we will contribute half of our bonus when we receive it, but that bonus could be any amount so that's understandably why the creditors may have pushed for an extra yea as they didn't have this information. But surely an IP would want to make their 5 year proposal as attractive as possible to the creditors?
Again I'm just assuming this is why it's been extended and need to speak to them to clarify this but the promise of a relatively large quarterly bonus wasn't in my proposal so I doubt it was explained properly to the creditors.
I just want some advice on what's possible to be done about it at this point in time so I know where I stand when I ring them, I haven't made any payments yet but surely there must be something. Do I need to fail it and reapply or can they just discuss this with creditors as a better 5 year offer with amount of bonus included in the final figure?

[mummy2elliekate]

Hi Lesley, Northern Rock is not a creditor. It's MBNA, HSBC, Lloyds, Barclays, Next and Shop Direct xx

[mummy2elliekate]

I've just got off the phone to them and they said that our bonus wasn't incuded in the proposal and it would be classed as extra monies payable into the IVA. So we are stuck with a 6 year IVA which I feel was unecessary. They said it was because bonus wasn't guaranteed, which in fairness is isn't but I have received the same bonus amount, give or take a little, for 6 years. It's part of my contract at work. So unless I get fired and have to find a new job, I will be paying my bonus into my IVA. Plus what is guaranteed these days? Not much! I'm not happy at all as I feel we've drawn the short end of the straw here with the way this has been worked out. The dividend is 14% in our proposal and is likely to actually be 100% with bonus included which is great for our creditors but not so good for us being in financial hardship for a year longer than necessary. Hopefully our landlady will let us live here long term as if we have to move out in the next 6 years we'll be homeless. Apologies for the moaning but this has given me the hump as I am seeing no benefit of this IVA now and could have just gone for a DMP and asked for the interest to be frozen and it could be finished in less than 6 years without putting a huge dent in my credit file.

[lem]

Who have you gone with for your IVA as it seems you really haven't been advised appropriately at all. Firstly it is likely that all your bonuses if they are over £500 will have to be paid into the IVA and you will be unlikely to be allowed to keep half, it is correct that they won't have submitted bonus information in your proposal to your creditors if they are not guaranteed. Also depending on who you have your car finance with it is unlikely you will be able to refinance the balloon payment when it becomes due at the end of your 4th year as most will not touch anyone in an iva with a barge pole, you are going to have to have something in place to be able to fund a new car and hand this one back when the balloon payment becomes due or pay off the balloon payment in one go, a loan from family perhaps? It actually really annoys me when people in debt stress going through the iva process are not advised correctly about balloon payments on cars that become due during an iva term and are just left in the lurch like this.

I don't know why your iva has only been agreed on a 6 year term, you will only ever have to repay what you originally owed, but there will be fees on too which will add to a few thousand. Have you actually agreed to these modifications yet?