Hugely Embarrassing Request for Advice

[Lisa.53]

Hi all, it is with massive regret and embarrassment that I find myself re-visiting this forum to ask fellow members for advice. This is going to be a long one so bear with me please........

6.5 years ago I entered an IVA due to debts which had built up over gambling due to a poor mental state that left me desperate to find a way out. I settled my IVA with a full and final 4 years ago but since then I have racked up debt again and over the past 6-12 months have rather pathetically tried to gamble my way out of it following the breakdown of my relationship and panic over how I was going to get out of this mess, and quite obviously I have made things a million times worse as I know that gambling is not the answer! (yep I know, the sensible part of my brain has obviously completely exploded!) I have taken all steps to stop the gambling and my relationship is now back on track and I am happy with all that apart from the fact that I now find myself completely unable to pay my debts and it is destroying me mentally... I can't function at work, my partner is SO supportive but I know I am not being fair to him as I'm miserable when I think about money or panic about making my next payments. My loans have high interest and my credit cards carry interest rates approx 37% so I simply cant pay this off. If I wasn't paying the interest I may have a fighting chance of doing this but alas due to a poor credit rating (again) I cannot find more attractive rates. SO anyway, that is the background of my debt but more about me is that I am a qualified accountant with a practising certificate and having already had an IVA my many questions are....
1... Would I be considered for a 2nd IVA having already had one for the exact same reasons
2... MOST IMPORTANTLY.... Does anyone by any miracle have experience of how ICAEW and ACCA would view entering an IVA for a 2nd time if this is possible? (I can't lose my membership as I would lose my job as a result and this would render me completely unable to pay ANY of my debt off and would also result in me probably losing my house etc) I had to advise them when I entered the IVA last time (I am a member of ACCA who were fine about it but I don;t know if they would be a 2nd time) and ICAEW fined me - as I am a named "responsible individual for audit purposes" with my employer so am also regulated by them)
3....I have a large loan with a family member that I am currently repaying and I REALLY do not want this family member to know about my issues (it is my dad and I really don't think he would understand or accept me getting into the mess I have again - in fact I know he wouldn't and he's the only family I have) - does anyone know if this debt can be excluded from an IVA and I can continue to repay this as I am or is this seen as preferential and therefore not allowed?
4....any recommendations on the best and fairest IVA companies to approach for advice, I was previously under the care of Melanie Giles and she and her team were absolutely AMAZING but I very much doubt they would want to take me on as a client again after making the mess I did again this time.
5... I have a government loan on my property and only about £20k of equity in the property once this loan and the mortgage are deducted from the value - what would this mean? ( I cannot get a secured loan as the government loan would need to be paid off first before any of the additional monies released and this would result in too high of a LTV ratio I believe - I have made enquiries previously before my debt increased to the level it has)

My apologies for such a long post but I know you have been so helpful in the past and I am really hoping someone can maybe give me a little bit of advice regarding my pitiful situation and what my options could be (IF ANY!?!)

Many thanks to you all if you've got this far in reading my essay!!

[Foggy]

1) & 2) have basically the same answer: You can apply for a 2nd IVA, but the responses you get from both creditors and your governing professional bodies will depend entirely on your explanation and their sympathies -- I am afraid there is no easy answer there!
3) The family loan, if declared, would have to be included. You cannot pick and choose. You could decide to keep it quiet (risky, but possible) but you would have to fund the repayments out of your agreed allowances --- you will not be allowed an expense allowance to fund this loan ---- obviously, yo ask for one would require that the loan be disclosed, in which case it would have to be included along with other creditors.
4) I am not sure that Mel is taking on IVA clients any more, but would be sympathetic, if she is. You are going to need a company that will fight your corner, so I would avoid the "IVA factories".
5) The inability to remortgage or raise a secured loan at the outset can be offset, by sympathetic IP and creditors, by proposing the falback 12 month extension is applied from the start (so a 72 month standard term) and the house be excluded. This, again, will require an IP in your corner.

Finally --- is an IVA the way to go, in view of the possible comeback and effect on employment ? Have you looked at a debt management plan with a firm like StepChange? It could last a long time, but will hopefully allow interest to be frozen and payments to be reduced to a managable level. Maybe even a year on a DMP would strengthen your arguements and prove a period gambling free for a future IVA.

[Lisa.53]

https://www.accaglobal.com/content/dam/ ... s-2013.pdf just a little further information.... ACCA consider each case on their own merits regarding discliplinary or exclusion from membership (which would then affect my job and income) and this is what they say so I am guessing it is very likely I will lose my membership given that my debts have been as a result of reckless actions...... I guess that is me completely stuck in this situation I can't get out of. Seems sad in a way that I want to do my very best to repay my debts as they are mine but yet if I lose my membership, I lose my job, therefore lose my income and therefore will be in a position where I actually can't pay anything back
What a royal mess I have got myself into again!

[Lisa.53]

Thank you Foggy, i knew you would be helpful, you always have been in the past so I am grateful you are still here! Sadly it sounds like an IVA isn't going to be a great option for me or one that my creditors or governing bodies would accept given the reckless nature of how the debt has arisen, I also completely understand the family debt can't be excluded but it is a large monthly payment so I doubt my allowances in an IVA would cover those repayments. I wondered about the DMP but I feared with my borrowings as high as they are that even that wouldn't be acceptable or make a dent in anything. My debt (without the family loan) is approx £55k I really don't know how on earth I am going to manage this mess this time around.

[kallis3]

We took out a DMP initially with a debt of £80k plus our mortgage and a secured loan and then went to an IVA.

You will need to prove that you have stopped gambling - take yourself off any online gambling sites to prove that you have done something about it. Speak to a few companies and get advice from them.

I'm not sure if Mel is taking on any clients as she sold most of her portfolio to Creditfix.

Hope you can sort something out but I'm afraid your family debt will have to be included.

[Lisa.53]

Are you able to recommend any really good IPs? I don’t know which companies are the “factories”

[Foggy]

Are you able to recommend any really good IPs? I don’t know which companies are the “factories”

The "factories" are the large firms who deal with thousands of clients at a time -- they work for some, but, if there is a problem, the support is variable and thin on the ground. Personally I prefer small to medium sized firms like Cambridge McDuffy, who have a good reputation for client care. We also have an IP who regularly posts on the forum, helping clients and non-clients alike, Lisa Thomas from Neville and Co. I would suggest you chat to a couple of firms to discuss options, to see who you get on with. Finally, you could try the number on the top of the page and have a word with Keith White, who also comes highly recommended.

[Lisa Thomas]

It might be worth you having an anonymous chat with ACCA to get a feel for what their stance might be in the circumstances.

Mel has left the firm but there are 2 partners left in the practice who took over- I am not sure if they deal with IVAs. Their contact details are here:

http://www.jonesgilesclay.co.uk/

I'd be happy to have a chat.

[luluj]

I have little to add from what advice has already been given other than to say you are not alone in getting into debt for a second time and you won't be the last I am sure.

You have the added pressure of your employment issues and memberships etc ... I think if it were me, I would try for a DMP for now to buy a little breathing space so you can take time in sourcing the right outcome.

The support of your partner is great, and with them standing by you, I sincerely hope you are able to find a solution xx

[Lisa.53]

So as it’s a new year I’ve decided to bite the bullet and told my dad about my situation, he is unable to help but I told him so that he is aware my debt with him would have to be brought into an iva if I have to go down that route, which it seems more and more likely it will be as I see no other alternatives. I did apply to do a DMP with stepchange but have never received the paperwork or any communication from them since this.

I have also contacted Melanies remaining colleagues and I have also emailed Lisa Thomas (thank you)

I have spent a long long time thinking about my job etc as obviously this is my biggest consideration- I need my job for even an IVA to work so it’s important that my job is not compromised by a 2nd IVA.

Whilst I am waiting to speak to someone could anyone help with a few more questions please .....

1. Obviously the creditors need to know the background of my debt and I know that gambling will not be seen favourably (I have registered with Gamstop and excluded for the Top 5 year period so hopefully this will help my case) but regarding my accountancy body do you think I have to tell them the same story or could I skirt around it?- and explain that I had credit when my credit rating was awful attracting a very high rate of interest etc and my debt just spiralled out of control (that is true to a large extent as my interest payments alone are more than I can afford to repay currently- if I had low interest rates I could probably manage and firefight the problem but my credit rating just keeps declining and the rates are around 35-40%). I recall Melanie perhaps said that I didn’t have to tell them my debt was due to gambling.

2. My partner lives with me now however it’s a complex situation as he owns and pays for a house that his children live in and has them to support so he doesn’t contribute to the bills at mine (and they wouldn’t vary very much anyway as it’s only groceries that would increase and maybe water but the heating etc would still cost the same) he does buy groceries but he has his own financial commitments too. When I had my first IVA this was taken into account and his income was not considered due to these circumstances. I would not be able to live on allowances of 50% of what I am actually paying out if they think he is contributing (or should be) half of the bills- can he still be considered as a “lodger” perhaps or me treated as a single person as I was with my first IVA as only my income runs the house with the exception of some of the grocery expenses which he contributes to.

3. The equity in my house, is there any way to protect or exclude my house as I don’t have much equity to start with plus I have the government loan so I can’t get a secured loan on this anyway as it would be a 3rd charge and I am aware hardly anyone offers these. Also would my car be safe- I need a car to get around and to work - it’s high mileage and only worth probably £4K anyway.

Melanie and her team were so wonderful with me when I took my first IVA and helped me so much and making my IVA affordable so I would really like to find an IVA firm who could help me as much as they did and offer as much understanding and reasonableness.

I’m so grateful for this forum, any help will be hugely appreciated.

It’s terrifying and very embarrassing to be in this situation again but I have to do something before it has any more of an effect on my life.

[Foggy]

1. I would be inclined to leave out the gambling here, unless absolutely pressed --- the other reasons you give are perfectly valid.

2. Different creditors will have different views on this --- some will take the line that they are, indirectly, supporting your partner if his income isn't factored in. It would possibly be simpler to set him up as a lodger, but the 'rent' he pays would be considered income to you. You can only discuss this, in detail, with an IP and see how they wish to present it to creditors.

3. It is possible to negotiate the house out of the equation, given that you would not be able to raise a third charge anyway --- this is sometimes done by simply factoring in the extra 12 months in lieu of equity release from the start -- but, again would be down to agreement bu IP / creditors.

I am sure that you will find Lisa Thomas to be reasonable and sympathetic.

[Lisa.53]

thanks foggy, I am certainly hoping I could leave the gambling issue out of the background for my institute in an effort to preserve my membership and limit any damage to my career/job.

I do appreciate that view but given that he basically pays for his own food etc I would be no better or worse off if he wasn't living with me, I think I was treated as being single and my expenses were based on that of a single person (groceries) etc when I had my first IVA.

A few more other questions - I'm sorry they keep coming to mind throughout the day -
If my family debt (dad and partner) are brought into the IVA (not waived) and are approx 50% of the total debt does this associated debt make it less favourable for the other creditors to agree to an IVA proposal? (my dad will at least want a dividend and some kind of monthly repayment as he is due to retire and needs some money back) Also my creditors are made up of 2 loans and 5 credit cards, the largest loan of which has only just been taken out a couple of months ago with a deferral of payments for 2 months so my first payment has only just left my bank account - this largest creditor accounts for approx 58% of the debt with non associated I think, it is with Tesco - does anyone know if it will be viewed badly that my debt is so recent? (majority of non associated debt is pretty much all accrued in the last 6 months) and do Tesco usually agree to IVAs (as one of the bigger voters I am just trying to gauge their view/response to an IVA proposal) Do the creditors get to see bank statements too or is this just for the IP - if it is just for the IP does this mean that I could maybe avoid telling the creditors that a large amount of this debt is due to gambling also and can focus on the increasing cost of the debt etc?

Its highly unlikely as I don't know anyone in my family with enough money to help me out but if a family member was able to offer a lump sum to offer as a full and final IVA (with no monthly repayments) to my non associated creditors how would a reasonable amount be calculated? I earn what should be a decent salary but over half of it currently pays off debt that I cannot afford and I rob peter to pay paul every month to live off, plus if I have equity in my house as well with they maybe not consider a full and final and want to take the longer route of me paying back a higher dividend over a longer period? ie - do you still do an income and expenditure to accompany a full and final offer? I would have loved to have had a child but with crippling debt and an IVA hanging over me and with my body clock ticking away it is unlikely I would be able to unless I could pay off an IVA quickly etc - if I was to suggest that the plan is to have a family of my own and therefore my earnings would reduce how would this be viewed - would it impact on an IVA proposal - 5/6 year or full and final from the off? ie - if i offered a full and final on the basis that my income would be changing in 1-2 years would that be more favourable than a monthly paid IVA? (please note I am not saying I would simply suggest that as a way out of paying back as much to my creditors as I possibly can - of course I wish I hadn;t messed up and could pay back every penny, but I would like a baby and I don't know if that would be possible to afford in an IVA but if I did this would have to be soon too as I am 39 this year so I do not have the luxury of time on my side - and I don't want to bring a child into a debt ridden family, perhaps that is something I will have to forego but I would appreciate any help and advice and perhaps any shared experience from others who have been in similar situation)

Thanks again foggy for your help thus far I am glad you are still on the forum offering your advice.

[Foggy]

Associated creditors are dealt with in various (and unpredictable) ways by other creditors: Sometimes they main creditors will ask that the associated creditor steps aside for the duration and gets no dividend. Also associated creditors votes are treated differently, hhich someone with more detailed knowledge would need to explain.

Tesco were one of my ex's creditors when we went into interlocking IVAs and voted 'yes'. A good chunk of our debts were incurred in the months approaching the IVA's --- in many cases, by then, most of us are living off credit !

The IP sees bank statements, but will report to creditors if there is anything they should know -- gambling being a pertinent issue, if, in their view, it is, will be addressed.

F&F vs. a full term ? : Usually a F&F proffered during an IVA is based on the amount the creditors stand to get in the long run, so is based on 'remaining payments' --- A usual dividend in an IVA seems to fall around 30 - 40%. So, for ease of maths, say you owed all non-associated creditors (we won't mention associated creditors for this exercise) £10,000 and are Ms Average. Your dividend at 40% would mean you are paying creditors back £4,000 plus fees, so total IVA payments, over 5 years, would be probably in the region of £6,500. So a F&F for a £10k debt would be based on £6.5k --- this is all, however, smoke and mirrors as there are so many variables, not least of which would be what affordable monthly payment was arrived at.

Yes, I am still here ( at least for the immediate future ) and you are more than welcome.

[Lisa.53]

Thank you as always for your advice Foggy.

I have this evening spoken to Sue Clay at Jones Giles and Clay who was exceptionally helpful and then also had a response to an email I sent to Melanie Giles and spent another 2 hours discussing my whole situation with her.... Melanie is still very much practicing and taking on new clients under PJG Recovery so she is going to be looking after me to find a solution to my problem which is a huge relief given she knows my whole background with my first IVA.

So, if anyone is looking for Melanie or thinking she has left the industry she certainly hasn’t and is still taking on personal IVA clients so please could you let them know she is still at PJG recovery

[Foggy]

Thank you as always for your advice Foggy.

I have this evening spoken to Sue Clay at Jones Giles and Clay who was exceptionally helpful and then also had a response to an email I sent to Melanie Giles and spent another 2 hours discussing my whole situation with her.... Melanie is still very much practicing and taking on new clients under PJG Recovery so she is going to be looking after me to find a solution to my problem which is a huge relief given she knows my whole background with my first IVA.

So, if anyone is looking for Melanie or thinking she has left the industry she certainly hasn’t and is still taking on personal IVA clients so please could you let them know she is still at PJG recovery

Thank you, Lisa. That is excellent news. Mel is, indeed, a jewel in the insolvency crown. Could I trouble you to pass on my regards when you next speak ? Thank you.