Two Sides To Every Story

[OPTIMIST12]

Sorry to be a bit controversial again - but as some one in an IVA and trying my best to comply with all the requirements - I was just wondering how some of us would feel if the boot was on the other "foot" and we were looking at things from a Creditors perspective.

OK - so we had leant someone some money and they had signed on the dotted line that they would repay this over X months. Were we wrong to lend this money??? - maybe - but it takes two to tango and everyone going down the credit road is an adult aged 18 plus. If the person we had leant the money to did not stick to their repayments - what would we do??? Obviously - we would do all we could to get our money back!!!! Can anyone honestly say that they would not????

The fact is that Creditors DO lend money to people whom they should not - but borrowers who should not take that money do so. It is a two way thing - everyone involved is an adult.

IVAs are a truly brilliant opportunity for people to get back on the straight and narrow - and lets face it - the Creditors who vote "yes" are stars. If YOU were a Creditor - how would you vote???

Sorry - there is no real substance to this thread - but lets just remember that Creditors who vote "Yes" deserve our gratitude.

[aguise]

I totally agree Debbie and have always tried to look at things from both perspectives. As you say when it comes down to it both have to hold some responsibility. Some more than others, I had creditors who as soon as I had paid a thousand for example off, were on the phone at xmas when you were most under pressure with 4 children as you know, offering more or to renew the loan. They never once said do you realise it is going to cost this much extra in interest, just it is only a few pounds more than you are paying, and like an ignorant fool I took it to make things a bit nicer or sometimes just to cope.
I am eternally grateful for the oppportunity an iva has given me to pay my debts back and am happy, as I know you are, to pay more if I can, and very grateful for the yes votes certainly.
Personally I would be no good as a creditor deciding, I would probably say yes to them all. Seriously I would want to see a good proposal with the best return. What I cannot understand is set criteria as with hsbc wanting 40p plus in the pound, an iva is INDIVIDUAL so not everyone is able to offer that, that is not treating each proposal individually. If I had been in that position mine would have been refused if they were my largest creditor and instead of 32p in the pound they would have got 0.01p in bankrupcy , I cannot see the sense.
Anyway I am rambling now so I will stop. I do agree though, in my situation blame can be put on both sides, ignorance versus making money and not looking at affordability.

Ang

[chris.g]

I would just like to ask one thing...what happens to all the money that isn't paid back?? Do the creditors have some kind of tax write-off or insurance scheme to cover the unpaid debt? This would be interesting to know...

[Adam Davies]

Hi
If creditors vote 'no' to an IVA what is the alternative ? Bankruptcy or a debt management plan.
With bankruptcy the creditors would almost certainly receive a far less dividend,if any at all.Under a DMP the creditor could wait upto 20 years for their money and often sell the debt on for around 10p in the £ anyway.How many IVAs return only 10p ????
Whilst I take Optomists view on the fact that creditors don't have to agree to an IVA I do not feel that they are doing us a favour,it's a commercial decision at the end of the day.People entering into IVAs are truly insolvent and an IVA will return far more than the other two solutions in the vast majority of cases.
I also agree that we do not have to take the credit offered and should accept responsibility for our actions and the situation that we find ourselves in[unless circumstances outside our control have left us in debt].However banks etc can't be exonerated as they HAVE lent money to people that clearly can't afford the repayments.
Remember many people need protection from themselves regarding taking too much debt and all sides must take responsibility
Regards

[wen]

It would be interesting to see the % of debt people take on when they are past the point of no return, yet have not admitted their problem yet. We took on a loan we probably shouldn't have in a last ditch attempt to make everything work. In those sort of situations there seems like no light at the end of the tunnel except another financial organisation waving a cheque at you. Should we have been more controlled, hindsight says of course, but most people on here know what it's like to have "that feeling", and as has been said before by Andy, someone can have a PERFECT credit record just because they are moving money around to pay minimum payments yet be totally insolvent.

Of course creditors do not have to vote yes, but I can only second Andy by saying that the creditors are taking the best opportunity available to them - and while accepting 25p in the £ may sound generous, I wonder how many of them are hedging their bets that property will further increase, or that some debtors may get huge pay rises/inheritances/windfalls during the 5 years and they would then stand to get higher than 25p/£. It is a commercial decision, and the vast majority of the time, it is not their own money or lives that the IVA voters are playing with, they go home at 5pm to their families and forget about their day. We carry on the worrying and stresses through the evening, night and beyond and it effects every moment of our lives.

I had a run in with a bank worker pre-bankruptcy when I notified them of our intentions to file and they made it sound like I had robbed them personally of the money and they would be out on the streets.... Uh no. The banks will carry on churning out £millions on £billions of profit, and while I realise we have a duty to repay what we can, I just don't feel that anyone should be falling to their knees to creditors begging to have their IVAs accepted, as in effect you are doing them a favour by giving them an opportunity to give something back rather than bankruptcy (of course bankruptcy in some cases is the only option such as myself).... so in effect shouldn't the creditors be thanking you??

[MelanieGiles]

With regard to the query about what happens to the money which is written off, this is set against profits generated by the bank and may often be insured - so the losses actually attributed to the lender can be minimal.

[bigpete]

Please do not take this as a personal attack - it is not - purely an observation..
Over the months I've been reading OPTIMIST12's postings and during that time the more I tend to think she/he is either in the Credit business or is verging on being sycophantic..

In my own instance I am just some poor sod who got into very deep debt (through illness) and I have worked / am working my butt off to get out it. We make curry with Tesco's 6p tins of curry sauce, ASDA's 31p fish fingers, we've been many week living on just spuds..

Yes, we had credit cards; one we were paying £200 of which £190 was interest.. The Royal Bank of Scotland's profit for the year rose to 7.3 billion pounds booms the headlines. Optimist; "The Creditors have been very generous in agreeing to potentially write off a significant percentage of OUR debt" and "we should recognise that creditors are doing us a very big favour by writing off a big chunk of debt" and "Sorry if my post is unpopular but I think that our (my) creditors do us a fantastic favour by accepting our proposals and I will be forever grateful to them" No these 'creditors' are NOT doing us a favour; it's purely a commercial decision, they will take as much as they can, and in an IVA/ Trust Deed they get more than in Bankruptcy. Additionally their debts are written off against profits, so losses are diminutive..
Your assertion that "I went into this arrangement on the understanding that I am going to pay back as much as is reasonably possible" so why, if you are so keen to pay back all, did you turn a DMP down?; "They did suggest a DMP as an option to me (it would have taken 100 months to pay in full assuming frozen interest)"..

My wife and I do our level best and have been in our Trust Deed 3 times longer than you have in your IVA, but the incessant;
"Anyone entering an IVA must realise that they are being given a brilliant second chance"
The above notion that I think you are involved with the credit 'side' maybe based on your postings;

"Given the high numbers of people now seeking the debt solution provided by an IVA I think we must all accept that a small minority of these will seek to exaggerate their expenditure or present a "sob story" when initially approaching their IVA provider" and
"Perhaps more influential is the fact that - if we are honest - the majority of the UK population are likely to have little sympathy for IVAs / IVAers in general. For many people who pay their bills / charges / fees on time every month IVAs will probably be seen as an easy way of shirking ones responsibilities and IVAers as people who have spent what they do not have and have only themselves to blame!!"
I have no wish to be preached to: "Well - it is true that for whatever reason many people have ended up insolvent through selfish reasons (no stupid excuses please - accept the blame - directed to me personally as well!!!!!) - but we must all accept that we are responsible for our own actions We have GOT to get out of this "blame" culture where we say that our Creditors are to blame for our problems - we are adults aged 18 plus and are fully legally and morally aware to make our OWN decisions. no one made us apply for Credit Cards and no one made us accept them - but for whatever reason we did so"
"For goodness sake - we (debtors) are responsible for where we are. From reading the forum some people seem to get - quite honestly - fairly generous allowances for contingency and other allowances in their IVAs."
"Things will be tough - but they SHOULD be tough - your Creditors are potentially writing off thousands and thousands of pounds. Be THANKFUL for that and be honest about your I + E - your Creditors are doing you an unbelievable favour"

"It has changed my life in many ways and I will be forever grateful to my Creditors for approving it."

"Seriously though - IVAs really do give people a second chance - I think they are a wonderful scheme - and we should not forget that it is our Creditors as much as anyone who gives us this second chance"

"surely the point of paying more money into an IVA - if there is extra money available - is simply to repay more of what the debtor owes to their creditors? Yes - in most cases it will not shorten the payment term but surely it is "doing the right thing".

"I think I have been criticised for this analogy in the past but - treat your creditors as you would friends or family"

"I can understand if my Creditors - or their reps - give me a hard time - after all they are doing me a mega favour by agreeing to my IVA. I am going to try my damndest to stick to my IVA and if my creditors want to give me grief then I wont complain. I will understand that - and I am just grateful that people are literally letting me off thousands of pounds of debt."
When I initiated this posting, my emphasis was it was not an attack, your postings are very knowledgeable and no doubt have helped a great many. Personally, as one who is experiencing living on the bread line, It is no help or comfort to me to read how wonderful and fantastic my creditors are - I will pay back what I can, let us not lose sight of the fact that most of our debts here on this forum is 'Interest' - I know I will have paid back the sums I owe + some interest, but nothing like the obscene percentages that were demanded.
PLEASE do not take all the above as an insult..

[petes39]

I`ll put this on my post to read later. hope you all dont mind ahve read a bit but just fin work and need my bed... I find this intersesting to read properly when wide awide.

[zim zim]

Hi, having read OPTIMIST12s post and the subsequent replies, i think the thing to remember here is: The creditors are not your friends and the decisions they make re IVAs and DMPs are solely based on what will give the best financial return to themselves and understandably so i might add! What the reasons are for being in the financial mess that a lot off us on this forum find ourselves in are probably vast and extremely varied. The only "stars" i see are the likes off Andy, Melanie and Co who give their time willingly and freely to help us all. Regards zim zim

[chris.g]

As far as creditors doing us a favour, I think we, as lenders would like to think they are but in reality it is a business decision to generate as much profit as possible. They may along the way, have some adverse lenders, a fact they accept when they are handing out the loans, c/card balances, car finance, mortgages etc. They are all in it for the money, not to help poor materialistic people get that 'must have' thing. Don't get me wrong and take offence at that, I am, too, one of those people but I have now realised that it is not life or death if we have a new car, or own our home, or that family holiday abroad.
I used to work for a home shopping company, on the personal finance side of it, and know that their card and loan were specifically intended for and targeted to people who may not have had the best credit file or who had no credit history at all. The scores needed for acceptance were very low, basically, all you had to have was a checkable name, address and bank account!!! Their take on it was that, as catalogue customers, they deserved a chance to have a high street card and that they were helping them to build their credit file--nothing to do with the £millions that they made in the 4 year I worked there!!!!! While I worked there I have spoke to numerous people like us, who have found that they cannot manage their debts and I was very limited to what I could actually advise them, everything had to be company orientated. (may I say, that was one of the reasons I left!!!) I've spoke to housewives who had £5000 credit limit who's husband didn't even know, all on a card with 29.9%APR......The company did eventually lower the maximum limit down to £1000, but only after they had to sell a lot of debt off!!!!
Now, I know I should have learned my lesson and kept away from credit, having known the way these creditors work but I didn't, as I say, I wanted that new car, etc and could afford it when we first took out the credit. It was only when my bricklayer hubby was out of work for 9-10 mth, due to building sites preferring to employ cheaper immigrant labour, that we found that we were in 'debt' and couldn't manage. If we had been responsible I probably wouldn't even know this site existed but I also feel that credit companies need to shoulder the most blame. After all, it is they that control the amount that lenders ultimately have. The business is still very profitable and always will be, for there will always be people wanting to buy things that they do not have the money for........

[OPTIMIST12]

Thank you to everyone for the very interesting replies - all of which make very good points.

I would like to add a few comments and thoughts to bigpetes post if I may.

bigpete - I can say in all honesty that I am in no way connected with the credit industry - beyond the fact that I am an ordinary person who has just completed the first year of an IVA. This first year has been tough but manageable and - like yourself - I frequently rely on the budget "Value" brands for meals ( I recommend 8p instant noodles - tasty and filling) - especially towards the end of each month. I note that you have been in your Trust Deed 3 times longer than me in my IVA - so I would like to congratulate you on seeing it through (PTDs last for 3 years only I believe???). When is your final payment? I hope that I can follow in your footsteps to a successful completion (though for me this wont be until Spring 2012).

I agree that my posts often come across as "pro-creditor". I know many banks make massive profits and charge excessive interest rates on credit cards etc. There again they are - obviously - in business to make money. Without wishing to repeat myself - or preach - I signed contracts with my creditots of my own free will. For various reasons I have had to break those contracts. By approving my IVA my creditors have given me the chance to make a fresh start and - yes - as a PERSON I am extremely grateful for that. I know they had their own reasons and financial self-interest for doing this and they couldnt really care less about me as an individual!!! But I am still grateful to them - I will always feel a massive sense of guilt about failing to meet my committments - is it really so outrageous to be thankful when someone agrees to write off half your debt? And yes - I realise that most of us will have paid LOADS in interest - but that is the way of the financial world.

I respect the banks as businesses - I think overall they provide a generally good service to the majority of their customers. Before I hit problems I had been with my bank for over 20 years with no problems. They paid me good interest on my current account. If I went overdrawn they charged me - they never made a secret of that - and on the rare occasion they made a mistake they put things right quickly. Like I say - I have respect for the banks - and like to give credit where it is due. I dont know about me "verging on the sycophantic" - (dictionary def. of "sycophant" - a self-seeking, servile flatterer; a fawning parasite!!!!) and apologise if I come over that way!!! I know that many many people fall upon hard times due to reasons totally outside their fault or control - this forum illustrates that very well. But I am also sure that there are a MINORITY of people in the wider world who act in a deliberately reckless and dishonest way and have no real intention of sticking with their committments. The banks have a duty to try and crack down on that minority and I dont think we should fault them for taking a robust approach. Harassment and threats by Debt Collection Agencies etc is of course totally unacceptable.

bigpete mentions my wish to repay as much as possible of my debt and asks why I didnt do a DMP as suggested to repay 100%. I can honestly say that I would have done a 100 month DMP had there been a "middle way" where creditors agreed to freeze interest. As things were it became apparent that I simply had too many different creditors to reach a plan that would be agreeable to all - it was not me trying to wriggle out of anything.

Thanks for reading my posts bigpete - I just put my opinion in them and am genuinely sorry if I have caused offence or upset. I would like to wish you all the best - hopefully despite our different views we will both finally enjoy debt-free futures!!!

[jpj]

As Melanie says...most of the banks etc underwrite their bad debts anyway so they dont actually loose that much.
All the years we were all paying interest on our extortionate loans, a certain amount of that interest was being set against the lenders bad debts anyway.
At the end of the day its all a big game of cat and mouse.
I think putting a person through 5 years of an IVA is enough to punish them anyway,let alone the financial impact the whole thing has on you too.
You are basically on probation for 5 years! and as Melanie has mentioned before very few people re offend after!
At the end of the day most creditors dont know you from Adam,and I think Optomists "lets all be happy clappy, and praise the creditors" is a bit wide of the mark! ..a mere "thanks" will suffice!!

HAPPY MOTHERS DAY TO ALL MUMS ON THE SITE! )

[OPTIMIST12]

Hi jpj -

I am actually an atheist - so cant quite relate to the "happy clappy" and "praise be" analogy - but I understand what you are saying!!!!

Yes - maybe I do go a bit over the top sometimes!!! but I have on occasion read - on the forum and elsewhere - messages from people who seem to blame creditors for everything under the sun!!! So there is room for all sorts!!!!

[Adam Davies]

Hi
I enjoy Optomists posts as they always make for a good debate.
It's good to have someone who is happy with their IVA posting as the forum can become a bit of a 'problem only' IVA arena
Regards

[Soulgrowth]

I agree and think that such debate is very healthy and makes us all stop and think ... keep posting Optimist [:)]

Debbie