25% minimum - is this right?

[rickyg33]

We're being told that creditors are all now insisting on 25% of debts to be repaid through an IVA. Is this correct?

We're looking at remortgaging and offering a Full & Final offer up front of up to 25% [might be difficult to achieve 25% as credit crunch makes it tricky to get a remortgage at the moment]. We could reach 22% or 23% certainly.

Any feedback welcomed.

rickyg

[carlmcmullen]

Ricky,

Who is telling you that ?

The majority of creditors are now best offer and if your best offer is 22/23% then i dont see why this offer would not be accepted.

I suggest you take advice from another IP.

[rickyg33]

Wilson Phillips.

It's a little complicated but to try and make it simple:

(1) the debt is in my name [about £85,000]

(2) the house is 99% in my wife's name and 1% in my name - it has been for 10 years [long story]

(3) I am the earner in the house - my wife had to stop work about 5 years ago

(4) my wife has agreed to raise equity in the house and offer a full & final to my creditors

(5) we can reach 22 or 23% but very, very difficult to push up to 25% due to income multiples and house value

(6) Wilson Phillips have insisted we cannot, under any circumstances, make an offer less than 25% as it would be totally rejected

I had always believed that if the IP could show that the offer is at the absolute limit of affordability, that should be received favourably by the creditors.

rickyg

[carlmcmullen]

I agree, if it is you are making the best offer possible then your creditors are likely to accept it. Dont really understand why your IP would tell you a minimum of 25p in £ - would be interested to hear Ian or Melanies view on this

Is there a reason why you are going straight for a full and final and not making any income contributions before raising the equity ?

[rickyg33]

our monthly disposable income is only around the £200 mark and Wilson Phillips have suggested a one off full and final would be better for us and would be more favourable to the creditors

[rickyg33]

don't forget, the property is only 1% in my name and this 'offer' from my wife is really my only alternative other than bankruptcy, in which case the creditors would get nought

I have no other assets - even the car I drive is my wife's!!

[MelanieGiles]

I think you will struggle with this to be frank, and not due to a minimum dividend level, but the fact that you have all of the debt and your wife has all of the equity.

I had a case rejected (my first for over 6 months) a couple of weeks ago due to this very point. We were offering all of the lady's share of equity in her property, by way of a remortgage, but creditors wanted a share of her husband's equity - and he was genuinely not responsible for any of her debts.

One creditor did not believe this argument and rejected on this basis. She is now declaring herself bankrupt and the return will reduce considerably, and she is absolutely distraught, and her other creditors are not happy as they gladly accepted the offer.

[rickyg33]

don't quite understand that.....

if my wife [effectively] has all the equity and can release just short of 25% to offer my creditors, there would be no better offer if the house was all in my name, since the offer would be the same

confused......

rickyg

[MelanieGiles]

They might see a better deal under bankruptcy proceedings, where the amount that you can raise by way of a remortgage has no relvance - but the actual equity (and any beneficial interest you may be deemed to have in that property)does.

[markss]

my iva was approved with 15p in the £ on a debt of £79000 through debt free direct

[rickyg33]

markss.......

is that recently?

and did all creditors vote 'yes'?

[ianmillington]

Basically the days of 24p in the £ == no and 26p in the £ =yes are long gone, so to say an offer is inadequate because it won't raise 25 p in the £ is plain wrong.

However, I think my main concerns in your case would be:

1. On an income point, we don't know whether or not you could afford a contribution and

2. Creditors might ask why and how your wife who, by your own admission, comes to own all the assets. They will suspect a sham I'm afraid. The property is a big issue and you appear to be under a wrong impression. The fact that the property is in joint names and stated to be 1% yours and 99% your wife's is merely the start point. It is necessary to then look at the financial arrangements which as you yourself have stated appear to contradict that split. I fear a Bankruptcy Trustee might will a strong case for varying the interests.

As a result of the above I can only conclude that Wilson Philips are letting you down gently.

Ian

[rickyg33]

a contribution of about £220 per month is about our limit

the house was 100% my wife's before we met - she had paid the mortgage in her own right for a good number of years before I moved in

we then paid the mortgage jointly [she was working also] for about 10 years - she stopped working 5 years ago

the 99% + 1% split came about when she lent me money and wanted [understandably] to safeguard her equity in the property - this is logged with the Land Registry and countersigned by a solicitor in 1998 - all above board, legal and documented

if Wilson Phillips are letting us down lightly, I'm annoyed - we have already paid over 2 x £209 to Thomas Charles, who then passed us onto Wilson Phillips, having recommended an IVA was possible of up to 25% [or best offer]

rickyg

[rickyg33]

we're now looking at cutting out the IP altogether - it's taking so long to get things agreed and the credit crunch is making it more and more difficult each day to remortgage [already had one mortgage offer pulled out from underneath us]

I'm looking at working out exactly how much we can offer on a monthly basis in a DMP, getting that in place, then looking at IVA options

we were advised to stop paying creditors altogether, and now interest is accumulating and remortgage options are diminishing

rickyg

[Oliver]

Hi Ricky

I picked up on your case yesterday evening and believe that I now have come up with a solution whereby you will make your very best offer to your creditors. I have already arranged for a number of your creditors to be contacted about your case and they are happy to judge your case on it's own merits. Jake should be due to call you today regarding this (if he hasn't done so already).