www.iva.co.uk

Hi

I had my IVA accepted on Monday and in the proposal it was on the understanding that I would change my mortgage (with NR) to interest only thus giving me an extra £110 to put into the pot. One of my creditors (in fact my main creditor at 34%) is Northern Rock who accepted.

Anyway, I have just phoned NR to ask them to put my mortgage to interest only as per the IVA proposal and the insolvency department has turned round and said that they didn't accept it on those terms and it's unlikely they can put it to interest only but if I want to apply to the underwriters through the normal channels then I can give it a go. I have read through my mods from them and it doesn't say anything about refusing that part of the proposal.

Any ideas on what I should do? If this doesn't go to interest only then I won't be able to meet the payments agreed upon.

Thanks

*ping* !

Sorry to hear this popcorn. I cannot answer your question but I hope you are okay and that you get sorted soon. xx

NR is one of our bigger creditors also so this should be interesting.....

I think the best thing to do is get in touch with your ip and ask them to clarify the mod. That way you can go back to NR with a bit more info for when they start their b*mf...

I had this with my IVA - before we could go ahead I had to request to go down to an interest only mortgage - I filled in the form and they changed it, but this was before the creditors meeting - they had said they would reject it, if we didn't change it (they like you are the major creditor).
I'm not sure what you can do, but hopefully your IP will sort it out for you.
k.

Hello Popcorn, here's a penny for your thoughts till some expert opinion comes along !

I think you probably need to check with your IP on exactly what terms the proposal was accepted because it seems to me that unless NR mortgage dept. agreed in advance to making the payments interest only then no-one had any guarantee that that would happen, and there ought to be some provision for that.

It may be that if they refuse you simply pay less money into the arrangement and continue to pay the money into the mortgage but if you have to release equity later there will be more of it so it's possibly swings and roundabouts.

I think that you have NR also as an unsecured creditor probably doesn't actually matter that much other than to confuse things.

Best Regards Simon

I would also add in the light of what Kal has said above that word 'mistake' comes to mind. . .

Why on earth was this IVA proposal put forward by your IP on an interest only mortgage basis if this had not been cleared first with your lender?

Um I don't know. I just trusted what they said. They asked me to get an interest only quote and on the I&E page it has:

Mortgage: £593*

* I am currently on an repayment mortgage but once my arrangement has been approved, I will change it to interest only. The amount noted is my expenditure is the estimate for interest only, given to me by my mortgage provider.

That loose end ought to have been tied up before your IVA was presented. I suggest you look for guidance from your IP who ought to have checked this. It is silly in today's volatile mortgage marketplace to assume that lenders will automatically agree to drop deals to interest only.