A question for Melanie

[Adrian Ratcliffe]

Hi Melanie,
When I took my IVA out I was paying a total of £1089 for my mortgage and second charge.
I have come out of a fixed period and with all the interest rate rises I have a remortgage going through at a fixed rate for 3 yrears bur my monthly mortgage is now £1340 along with my IVA payments of £560 per month my income is only just goint to cover this leaving me with about £40 a week to live on and run my van.
I t is obvious that this can't go on, would the IP let me downsize to a property that took into a account payments dropping to a lower level but still paying the same amount into the IVA?
My property value is £270.000
Regards
Adrian

[MelanieGiles]

Hi Adrian

That would seem to be a sensible suggestion to me, but you will need to discuss the implications of this with your IP. Another option would be to put a variation to your creditors lowering the monthly payments to an affordable level. How much equity is there in your property now - as perhaps an equity release based full and final settlement might also be another option. Could you also let me know how much you owe to creditors.

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

[Adrian Ratcliffe]

Hi Melanie,
Thanks for that the equity in the property is between £40,000 and £60,000 this is due to Estate Agents differences in valuation.
The original IVA amount was £111.000 this was due to bad business deals to which im'e partly to blame for. I have paid 12 months so far.
I can't see in the original proposal if there was a 24 month clause for ending the IVA, I have heard some people on the site revert to a debt management plan I know this doesn't pay the debt off but the repayments seem to be lower is that an option?

Regards
Adrian

[MelanieGiles]

Not really with the level of debts that you have Adrian - you will be paying for ever!

Given the valuation of your property, I cannot see how you can raise much money based upon an 85% loan to value calculation now. Have you consulted a mortgage broker?

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

[Adrian Ratcliffe]

Hi Melanie,
I have seen a mortgage broker this is why I think the best route now would be to downsize, the differenc in payments over the last year to which the IVA was set up on is £375 in defecit I doubt the IP would vary my IVA from £560 per month to around £285?
If I did downsize what would be the angle on the equity in the 4th year ? in my arrangement the voluntary payments = £30,000
with £8,000 being quoted as the equity to be sought from the remortgage in the 4th Year(how can this be calculated at the start of the IVA, in a rising market will this be upped to the full 85%)
Regards
Adrian

[MelanieGiles]

You really need to take specific advice now from your IP, Adrian, as it is impossible for me to give specific advice when I do not know your full circumstances or who your creditors actually are. It seems a sensible way forward, and I feel sure that you will get the result you are looking for.

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

[Adrian Ratcliffe]

Hi Melnie,
I would like to take specific advice from my IP but the more I go through the IVA process and posts on this forum it strikes me there are more questions than answers. I have looked through the paperwork for my IVA and nowhere does it state anything other than £8,000 and I presume it's in year 4.
Another point that I have read is that a contingency is unlikely to cover a hike in mortgage rate rises, historically they have been 10% my company has never covered these points. Surely a default contigency would be set at an historic rate or a rate based on fact.
Why is there no handbook on IVA's ?
Seems to me like it's made up as it goes on as there is no history to look at, with the interest rates at the moment about to rocket IVA's have been setup post massive rate rises.
Regards
Adrian

[Sadsack]

Adrian

An excellent book has been published by Cavendish. Its called Personal Insolvency and is part of the Pocket Lawyer Series. It does not give you every single answer, I think there would need to be an entire library devoted to various issues surrounding debt, but I have found it to be extremely useful.

Sue

Ho Hum! Think I'll bang my drum!

Read My Blog
http://sadsack.blogs.iva.co.uk/

[MelanieGiles]

You do not need a handbook on IVA's, so long as you have an IP you can visit for advice or at the very least talk to on the telephone.

Adrian, sorry I do not understand your post about the property equity. If you can reproduce word for word the provisions of your own proposal, then perhaps I can advise further.

IVA protocol is not made up as we go along - it is based upon the Insolvency Act and Rules 1986 and widespread caselaw. Of late, the creditors themselves have set rules by way of modifying IVA proposals, and it is hoped that a consistent approach will be agreed shortly. In the meantime, your IP should be the only expert you need to take advice from.

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

[Adrian Ratcliffe]

Hi Sue,
Thanks for the info.
Regards
Adrian

[Adrian Ratcliffe]

Hi Melanie,
The post about the property equity revolves around my IVA paperwork.
I have studiesd it and it's more generic than specific.
The first page states:
STANDARD CONDITIONS FOR INDIVDUAL VOLUNTARY ARRANGEMENTS
Produced by the Association of Business Recovery Professionals.
Version 2
November 2004

After that the only page thae relates to me specifically ithe comparison of IVA and Bankruptcy.
In which this page states Contributions £500 x 60 £30,000 Monies available from remortgage in 4th Year £8,000 versus £300 x 36 and £7,000 in Bankrupdy.
Can scan the whole 50 pages off in word and post it if you want?
Regards
Adrain

[MelanieGiles]

OK - so now you need to read further in to see how it is suggested that the £8,000 be raised. If this provision is limited to £8,000, then you are obliged to raise this during the fourth year of your arrangement by way of a remortgage - which begs the question as to how you will be able to continue to make payments of £500 when you have a higher mortgage to pay.

Why not ask your IP to confirm your responsibilities in this regard in writing, so that you can consider the future of the IVA in light of ongoing affordability.

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

[Adrian Ratcliffe]

Hi Mealanie,
Exactly (Accrington Stanley((bingo)
I want to see my IP but he has so many bods around him I am relying on your info to be able to focus on some kind of meaningful exchange when I actually get the priverlidge of meeting him.
My company had all the mortgage details at the time and knew it was fixed Interest Only until this year, until I stumbled on this site I thought all IP's just said sign here here and here and there.
Would I be wrong in assuming bankruptcy is better because it doesn't take into account interest rate hikes on mortgages.
Regards
Adrian

[MelanieGiles]

It is not a privilage to have a meeting with your IP but your right as a client. These people need to come down from their ivory towers and treat their clients with some respect. I have searched you on the IVA register and know the firm you are using - they do have a fairly good reputation. Bankruptcy is unlikely to be better for you given that you have equity in your property.

You don't need a meaningful exchange - just some simple answers to some simple questions. I suggest you arrange a meeting as soon as possible to put your mind at rest. And you have to appreciate that I cannot advise you specifially on the forum as I have no in-depth knowledge of your case.

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

[Adrian Ratcliffe]

Firstly thanks Melanie,
There is no in depth knowledge about my case to be honest. I wouldn't ask you to give advice just help form an opinion. The company I am useing was reccomended by the Bankruptcy Association but I wish I had come on here first I would have used you.
Regards
Adrian