Joint IVA started with Accuma, now Grant Thornton in March 2004.
Total debt approx £37,500.
IVA terms 52p in the pound with year 4 equity release of exactly £10,500
Credit crunch and recession came, couldn't get remortgage so IP agreed to extend a year. I advised IP was putting house up for sale as boy and girl getting older and sharing a room and would pay up with proceeds from sale.
Year extension is up, house still not sold and IP suggests just keep paying in till £10,500 equity release is paid up. This means IVA will complete in Feb next year. We are paying in £466 each month and final payment will be £104.01 This means the current balance left to pay is £3366.01
We are now expecting our 3rd (and final!!) child. Our house is in a popular area but will not sell until some urgent works are carried out eg. New Guttering, new front door and frame, some replastering as a result of damp coming in at door. IVA payments prevent us from being able to afford this so in a bit of a Catch 22 and by the time we can, things will be overcrowded and house will be damper after yet another winter.
Do you think I stand a good chance of approaching IP and saying "Look. Enough is enough. All regular monthly payments have been made and only 32% of Equity clause balance remains. Can we just wrap it up now with no more to pay? I liken this to making a F & F of £7133.99 on a £10,500 balance.
Congratulations on the pregnancy and I think this is perfectly reasonable. You have more than maintained your agreement and the new addition will certainly rack up costs. Creditors should look favourably on a full and final and you can get the house ready for when the baby comes along. Have a word with GT and maybe get a few quotes for the work that needs done. It would be unfair to bring a newborn baby into a cold or damp house.
Hmm it's getting a bit conflicting now lol.
The most recent Annual Report basically conceded that the remainder of the IVA was now on an informal basis ie. No request for I & E or payslips as it was running it's natural course and would have taken 7 years to complete.
By your question Melanie do you mean prove we cannot afford the repairs which would be necessary on account of IVA payments? I mean thaty's a no brainer really, there is nowhere enough disposable income left to cover what is required.
Surely in our situation, in the last 7 months of a 7 year IVA, I need to be proving that there is more benefit in stopping the house going into a state of further disrepair so we can get it sold and move somewhere big enough for our growing family. If creditors are stubborn and insist on it carrying on till next Feb, the house will be damper for starters thus reducing it's value. Furthermore, it will be obvious to any interested buyer that 3 kids in a 2 bed home means we are almost certainly going to have to accept a below par offer as they will smell our desparation to sell.
If at the end of year 5 with £10,500 remaining, we made a F & F of £7133.99, I'm sure it would have been accepted gladly. Well nearly 2 years on an extra £7133.99 has been paid in.
Perhaps I ought to add that despite keeping myself fit and active, my asthma medication has recently been doubled. Damp at home does not sit well with this.
I think estimates and a report would be enough. Perhaps a letter from your GP would also help particularly if you would be bringing a newborn baby into a damp house. You have certainly shown good faith and in my opinion creditors would see that and not penalise you. I would at least try a settlement and see what creditors say.
Not discussed anything yet - testing the concensus here as there is a lot of informed expertise to draw upon.
Like you say Michael, getting a few quotes sounds reasonable and I am in the process of getting some. Had one for the Guttering which is £750 - £800. There's just under 2 months worth of remaining payments. New door and frame could easily be another £500 - £600. Plastering work indoors to replace crumbling plaster and subsequent redecoration could easily exceed £400. Pointing work is required around one leaking downpipe, cost = £???. I could justifiably add a few other things to the list without making look like I have some TV Makeover show budget.
Thanks for the advice guys keep it coming
We may all be experts - but none of us have detailed knowledge about the mechanics or track record of your case which may temper both your IP and creditors decision making processess.
Take advice from the ultimate expert in your case - your own IP - and do let us know how you get on.
The reason creditors sometimes take a lower full and final is because its in a lump sump. I could put forward a full and final offer of say 35k for a 45k debt from a family friend and they may well take it but it would not mean I could pay monthly my IVA payments up to the 35k mark and then say please accept this as a full and final because its not a lump sump but been paid over time.
The creditors are unlikely to accept closure on the basis you want to spend money on the house because they will see it as you sprucing up the house and potentially getting a larger equity release because of their generosity and they would not be seeing any of it. Personally I would go more along the lines of another new born child which is obviously dependent on yourself, work out your new expenditure as a result of the new addition to the family and if you can then present to the IP as a result of your new I&E there is no disposable income left for the IVA they may consider closing it especially after you have paid for so long.
As for the extension part because you couldn't re-mortgage I am a bit confused. Did you carry on paying your IVA payments for the 6th year or did you in effect have a payment break for the past year with the caveat of selling the house and providing the £10100 once sold?
Thanks for your contribution. I fully understand the first point you are making but I am suggesting on the basis of actually making the house habitable and sellable. The current state it is in is having a lowering effect on any equity. I could even show them pictures for goodness sake. Rain and snow and cold will only make it worse. A whole piece of guttering fell off in storms a few years ago. The insurance would not pay out because it was wear and tear of original cast iron guttering. The remaining guttering is rusting away and seemingly hanging by a thread in places. There is a crack in one downpipes which is currently held together by epoxy resin but not before loads of water has made it through the wall and approx 3 to 4 sq. m. of plaster in the dining room is blistering and crumbling as a result. The mortar on the outside around this downpipe is moss ridden and requires repointing. Frame on front door is rotten on account of botch job by previous owners resulting in damp affecting a corner of wall in living room and a radiator in hallway becoming loose. A crack on driveway is (I believe) responsible for another damp patch in other corner of living room. One more winter will only make all this worse and any repair bills could seriously escalate potentially wiping out any equity we may have left in the property anyway. I am asthmatic and like I said, my medication has just been doubled. The baby is due about a month before IVA is due to end and a damp house in winter is not what we want for him or her. This is certainly not about sprucing the house up, it is about making it habitable and sellable. If we were in a newer home, I seriously doubt we would be considering making this proposition.
To clarify your last query Dave. As we could not get the remortgage, we have effectively extended the IVA for 22/23 months. With this in mind, I am also considering using the "look Guys this isn't a conventional arrangemnet now, the IP has stated in the report they are no longer interested in monitoring I & E on account of duration and quite frankly it's getting a bit boring now so cut us some slack" approach to creditors. Lord knows they don't exactly have a good image. A few small kindnesses can go a long way to rebuilding public confidence.
Dave - Sorry just realised another point there mate. The Equity release in our IVA is not the usual 75% of any available equity. It is a flat £10,500 and won't exceed that figure so any rise in equity should be irrelevant to the creditors. It really does just boil down to appealing to their better nature by acknowledging it has overunn for too long anf mst of the funds are already there and by doing their bit to give a young family a bit of a break and a headstart without actually incurring any further risk themselves.
I am sorry you are in such a position. From your original post I never realised you was living in the money pit that's falling apart around you.
I still stand by my comments that the creditors will not accept a full and final working on your logic of I have paid this large sum in as its been over time and not in a lump sum. They may however accept a full and final of payments thus far paid in due to the fact you have a new child on the way with your expenditure raising dramatically and you also have a house which is not fit for the childrens health and safety. I think you need to speak to your IP about your change in circumstances your essential works required on the house and see if they are prepared to put it forward for you as a full and final.
Let us know how you get on
If you are seriously concerned about the state of the house then you need to put that forward to the IP and ask for a full and final on that basis. Provide evidence you can no longer afford to pay into the IVA and the costs you have upcoming and like you say hope the creditors have a heart. I personally think an almost 2 year extension due to the fact you could not release equity seems high also the majority of people only get a 1 year extension from conversations on here which you have already paid.
