www.iva.co.uk

I recently called a debt management company inquiring if we qualified for an IVA, initially we were told we do until we discussed our current mortgage, we have a "Together" mortgage from the Northern Rock, where part of the mortgage is an unsecured loan.

We were told that any IVA would be rejected because of this and were offered a debt program that would take us at least 10 years to clear our debts, is this really the only course available to us ? We have no fancy for paying £30 a month to a company for 10 years + if all they are actually doing is writing a few letters to our debtors telling them what we can afford to pay, couldnt we do that ourselves?

Why not get a second and third opinion? Melanie Giles posts here and has a very good reputation as an IP and arranging IVA's. It's always best to shop around before you decide,
xx

Hi i agree with chris do shop around before you decide and get some more advise, as suggested try melanie giles, or one of the other ips that post on this site.

I had a together mortgage with the Northern Rock and entered into an IVA last year. Only the unsecured part was taken into the IVA though .

Hi Biaze,

You might be better advised to get an impartial view from either CCCS, National Debtline CAB or indeed one of the IP's that regularly post on here.

An IVA is but one option, you should properly consider all ofyour available options.

out of curiosity, what percentage of your total unsecured debt does the NR unsecured loan represent ? [:)]

Hi

The 'Together' loan is problematic for IVA's because it is only nominally unsecured.

In reality it is covered by an 'all-monies' guarantee against the property and so is effectively secured against it in default.

However that does not mean it cannot be included in an IVA if NR decide it would be in their best interest to do so, as they must have done in Tommy's case above.

What you need is a firm or IP that properly understands the situation and won't just bottle out because it looks a bit tricky, (as others have suggested).

If you end up coming back to square one there's no reason why you can't run a debt program yourself, the difficult bit is getting your creditors to freeze the interest. However if you go through the CCCS, they should be able to do this as they are basically run by the credit industry and and I don't think there are any fees involved.

Best Regards, Simon

We owe £32,000 of which the NR unsecured loan is £11,000 (approx figures) We havent missed or been late on a mortgage payment tho have already defaulted on credit cards and other debts.

We spoke to the debt management company one day, got papers through the door the next morning and a phone call from them asking if we would meet the arranged payment with them and it was due that day, we hadnt even had time to open the mail from them never mind sign or return anything before we were supposed to make a payment, this stopped us really from going through with it and now reading advice here we are pleased we did.

Thanks for the advice we will definately call more companies x

I have no problem in putting IVAs forward with Northern Rock together products included, and see them regularly accepted - so I do feel an IVA would be a viable option for you if that is what you decide you would like to do.

And just to confirm that Northern Rck do not have any security for the unsecured element of their debt under the "together" product.

Thanks again for the advice, Ive filled in Melanies online form and hope she can advise us whats best for us x

Good luck biaze, if anyone can Melanie can.

Good choice of professional.

Melanie and her team will give you solid impartial advice and if an IVA is the right solution then you are in great hands

And just to confirm that Northern Rck do not have any security for the unsecured element of their debt under the "together" product.

Sorry Melanie but I don't think it's that straightforward. To illustrate what I mean, heres a quote from another forum from a poster called 'Anon IP' - it makes for some interesting reading.

I have just been reading your Northern Rock article, and though you would be interested to know that they are now exercising the 'All monies clause' as soon as client does not meet a payment or they are notified of an IVA, and in some cases not advising the Insolvency Practitioner until the day before the meeting that they have secured the unsecured debt against the property. To clarify, Northern rock sell there loans to customers as unsecured loans, but there is a clause in the agreements that allows them to exercise an 'All monies clause' which basically means that they can make an usecured debt secured. I have worked for three different insolvency companies and seen it happen. I spoke to Northern Rock directly who confirmed they do have this clause but dont normally exercise it. I had a client last week who missed one payment and the exercised it straight away, and another client where Northern Rock called us the day before the meeting to advise they have secured it against the property using the all monies clause.

Best Regards, Simon

I am well aware of that clause thanks, but have never seen it invoked - indeed Northern Rock actually go to Court to secure Charging Orders which they would hardly do if they felt that the all monies clause gave them good security. But you do make a very good point and perhaps Andy Davie now needs to write to Northern Rock, on behalf of forum members, to see what their position on this point actually is.

I agree with Mel. I have seen umpteen of these together products and their agreements. Not all these agreements have the all monies clause. Those that I have seen with the AMC have been invoked every time ! Those agreements that dont go for CO's virtually every time !!

The early agreements almost always had AMC but the ones in recent years rarely did.

They would not be able to get away with litigating the way NR do if they already had a security for the debt. [}:)]

In addition, where an IVA beats other solutions with NR debts (where you can get them thro thr vote) is these together products have an accelerated penalty clause . When the secured part of the product is redeemed but the unsecured portion is not the interest rate can increase by about 10%. Beware !!

Hi
If the above is true then NR are still a law to themselves regarding IVAs.
It's about time that they abided by the Banking Code of Conduct that they signed upto and about time that the BBA and the Governments Insolvency Services took them to task over their stance
How does the above action by NR eqate to the following part of the Banking Code of Conduct ?

14.1 We will consider cases of financial difficulty sympathetically and positively.
regards