IVA Rejected. Urgent Advice needed Again. The IVA which my husband and I were hoping to enter was rejected 12-Aug. In summary we have a property portfolio which unfortunately has gone very toxic.Amount owed on property = £750K, Value today = £330K, C Card Debt = £40K, Loan from relative = £147K On consultation with our IP the plan for IVA was to sell the family home and offer a Final Fixed sum £44K. The IVA proposal was rejected. In addition to the proceeds from the sale of our home the bank wanted an extra £21K to close out a FF sum agreement. We are already in a lot of debt to our close relatives - £147K to one imparticular and smaller amounts to others. We cannot raise the extra amount.We really thought the initial proposal of a FF sum with the proceeds of our home plus the return of the property portfolio to the bank would be adequate We were led to believe that the bank would not have voted against the initial proposal but they have. The IVA practitioner has said that the bank wants 13p in the pound. It seems the only way for us to go now is bankruptcy which we were so reluctant to do. Bankruptcy seems to me like a lose-lose for the banks as well as ourselves, but appears to be the only course of action open to us. Sadly my husband and I are separating due to the obvious stress brought on by our financial difficulties. We had wanted to do this finally and quietly after the IVA process was over but we have now declared it as this will obviously have an impact on our expenditure since we will now have two households to support since we still have two younger children at home and two older children to support at university. Our IP seems very distant at this stage as if they have done all they can and there is nowhere to go now. Again can’t express how stressful this whole situation is. Would just like it to be over with one way or another. Any advice or ideas appreciated. I would be grateful if the experts on the panel could give any further advice or ideas
Which IP firm are you with Josie - and what were the reasons given by creditors rejecting the proposals? Why not get a second opinion from another practitioner - they may be prepared to rework and represent the proposals for you. I have certainly done this for clients in the past, and am getting IVA proposals accepted at much lower than 13p in the £ - so I do wonder if that was the real issue.
I am saddened to read that your marriage may be at risk because of the financial pressure you are currently under.
Hi Melanie - thanks for getting back. Not sure what the issue is. The IP said that the bank 'feels there is more money to be had'. But as we have explained to the IP there really is not as we owe so much to indivduals. To be honest it feels like that the IP has reached the end of the road with us and we are not sure (and the IP doesn't seem sure) what the next step should be. In your experience is the next step always bankruptcy? Would be so grateful for your advice as there doesn't seem to be any other experts replying
Hi Josie. I have had a long chat with your husband and we are looking to see if there is anyway we could resubmit the proposals which would make it acceptable to the bank. It is unusual that this bank voted otherwise the IVAs would have been approved but we will try and get this resolved. The last meetings have run out of time but we can resubmit amended proposals once we have reached some form of agreement with the bank and yourselves.
I'll leave the procedural technicalities of this complex IVA to the practioners here.There is alot of money involved.
I say this though, as someone who has been on an IVA, increasingly been Bankrupt or going on an IVA are NOT NOT that different as lenders see both in the same boat.Many institutions only see past'defaults' in decision making in lending rather than labels like been 'bankrupt' or in a 'IVA'. I had a chat with EQ'fax and CC the two other credit agencies that credit score on their 'own'(not public) data on payment/borrowing history and they tell me that one's credit score isn't that much better during an IVA or been bankrupt.Infact it is scored around 200, very low score(one star out of five) for an IVA person.So how bad can been BR'get for your credit score.
I think we might personally think been on IVA is 'better'on a status point of view than been BR' but after 6 years on an IVA my view is to go BR maybe can be better as you are discharged in two years, clean start!
A 5 year IVA and with a 6th year discharge...that's another long period to go through.And all those I/E review processes in between.Sorry, but in todays economic state of affairs,I would go Bankrupt and have have my life and soul back ASAP.
There are those who are BR and aren't feeling the pitch afterwards and I am increasing think this is a better option than IVA with big big debts.
As a option to become BR you are no more disadvantaged than someone with an IVA.
One massive plus point for going Bankrupt over IVA is the insolvancy register, which as most know is free easily obtained online information to check on anyone you know or neighbours to see if they are IVA or Bankrupt which is an invasion of privacy but the main point being if you are bankrupt and discharged in 1yr (normally you are on the register for 1yr 3mts but with an IVA 5-6yrs.
A massive plus point if you value your privacy. I did.
There are many pros and cons with the BR vs. IVA choice, but there is no "no pill cures all" here. For some, yes, it's great that they are only on the register for 15 months or so, it's great that they are free after a year and only make payments for up to 3, but if your employer fires you due to BR it's no great advantage. Also the equity point has to be examined carefully, if you own your home.
At the end of the day the solution has to fit the individual circumstances.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Sorry to not get back to you Josie - I have been taking a little break from forum posting over the last week or so, but it seems appropriate right now for Michael to see if his firm can rework the proposals to make them more acceptable to the bank, now that they know specifically what the bank's objections are.
Keep us posted on progress, and good luck for second time around.
My total debt is around £400k (included a family debt), with an IVA plan over five years working to 35p in the £. My IP has told be that any proposal to reduce this down (due to change in circumstance) would unlikely be accepted. I've a wife, ex-wife, two children and hefty maintenance every month.
I returned my property to the bank following a divorce and the bank auctioned it off for £230k having purchased it for £320k 12-month prior, at worst, it was worth £275k. They don't care about the figures, they knew the balance would fall to me to pay, just about how much they think they can squeeze you for. At 19p in the £ the bank will still get more than if you go BR, I really think it's just down to having a decent IP and drawing a line in the sand as to a figure that you're prepared to stick on.
It's hugely stressful and at the time I didn't want to go BR, in-part because of the perceived stigma and in-part because I felt responsible for the debt and it should absolutely be my responsibility to return as much money as possible (at the time, I was also a bit self righteous about a friend who had gone bankrupt and cleared in 18-months). My view changed once I heard about the house auction.
Josie, my advice would be to seriously consider BR. If I had a chance again, I would have done BR and not IVA. I am on the insolvency register, I didn't need to be a company director for the last 3.5 years and I can't see one bit of different it would have made to me apart from right now, I would be debt and stress free.
The IVA has restricted my employment options (having to keep a high level of income up) and prolonged the pain. My ex-wife had to go BR as she had very limited income, but she's clear of it all now.
That being said, if you find the right IP who you really feel can look out for your interests and not just that of your creditors then life may be a little easier. One other thing also to consider is any other potential variable income that you might have. Through the IVA I was able to keep 65% of net commission earnings, which did lift me on some months, on BR I doubt I would have been able to keep any of it. Either way, good luck.
