www.iva.co.uk

I have just started the sixth year of my IVA. My IVA term is 6 years with the usual possible 12 month extension if I can't remortgage to release any applicable equity in my flat. For the duration of my IVA, so that I could afford payments, my mortgage company agreed to interest only repayments. In my sixth year they have now changed their minds and increased my mortgage payments due by roughly £150 per month. I currently pay £152 per month into my IVA and if my mortgage cannot stay an interest only I cannot afford to continue. After paying into my IVA for so many years, it would be devastating to have to go bankrupt at this stage. I owe £3.3k on my IVA still. I looked at offering a full and final settlement figure but my family can only raise £2k. My IVA officer told me that if the offer is rejected then, they might petition for my bankruptcy. I'm devastated. What should I do?

Hi and welcome,

Sorry to hear about your problems - from what you are saying I suspect your IP is Payplan and they always say they might petition for bankruptcy - you can ask that this clause be removed and they will do it.

I think the £2k is a good offer personally and the IP should put this forward with all of the mitigating circumstances given to them. Make sure they know that the money is only available for the full and final.

Your case officer is talking rubbish. Indeed you should not even need to offer any more money as most decent IPs would call a variation to close down based on payments made to date. It is not your fault about the mortgage and if it was Northern Rock who have done this then the likelihood is that they are also a significant unsecured creditor. If this is the case I am pretty sure they would support the closedown.

I agree with Michael your options are:

1. Speak to Ryan and Shaun about alternative mortgage options (but suspect this will not be possible)
2. Put forward variation accepting payments to date in Full and final settlement and close the IVA down
3. Put forward £2k F&F settlement offer variation proposal.

3) is clearly going to be more attractive to creditors and therefore has more chance of being accepted than 2.

However if the IVA fails the creditors probably won't receive a further penny in Bankruptcy as the costs are so high so little reason to reject 2) unless they want to be difficult.

Thank you all so much for your replies. Right that I'm with Pay plan and also right that my mortgage is with Northern Rock. Not sure I understand what you mean by a variation. regards the F&f offer,pay plan have said they'll need a redemption certificate, flat valuation as well as utility bills with the offer letter. Seems like a lot of info. There will be equity in my place because some of my mortgage was an unsecured loan which was included in the iva. Do you think the equity will mean they are more likely to reject my 2k offer? I know there are no guarantees #128542;

I never had to provide utility bills (I was also with Payplan) - Lisa means that you put forward a suggestion that payments to date are taken as full payment.

I think the offer from your family is a good one and make sure they take that bankruptcy clause out!

Thank you. Pay plan certainly aren't being that sympathetic. Glad to have advice and support here.

I see no reason why the full and final offer will not be accepted as it was N Rock who forced you into a six year and also them who want repayment rather than interest only. They will be a big creditor but their vote will hopefully be in favour. You have done all that was required.

Thank you Michael. I hope so, this is really getting me down. it was my fault of course that I got into debt but I've tried so hard to pay back what I can. To fail at this late stage would be awful.

There is no reason for the IVA to fail nor for you to blame yourself. Get on to Payplan and ask for the variation and I am sure it will be fine.

Best of luck - let us know how you get on.

The variation meeting will be required as whichever option you chose you are asking creditors to accept a variation of your original proposals.

I have just spoken to PayPlan. They have said I should offer more so I'm nearer the 23 payments left and base it on the original monthly amount of £132pm. My total debt was £16,700 and to date I have paid £13,500 (after my Nan dying and leaving me £5k)so far. I asked if I offered the difference between what I had paid and my original debt and Payplan said it's not that simple. They have said there are no guarantees which I knew but then they said, potentially the creditors could want 5 years worth of interest and other fees.I'm so lost! They still want the flat valued, even though I approached my bank and they said they wouldn't give me a mortgage until 6 months after my IVA ended. Should I just sell up if there is equity but I know worry that wouldn't be enough. How much money could the creditors really take me for?

sorry I have paid £13,500 to date not £15,500

If you sell then Payplan will want some of the equity so I certainly wouldn't advise that.

Insist that you want your offer putting forward. I presume they are talking about statutory interest and fees. The creditors are usually happy to get their money early.

Nothing wrong with getting a valuation - you might find the equity is less than you thought.

Yes they said it was the interest that would have been charged to me on the debt had it not been for the IVA and £1,000 for a nomination fee?
I'm lucky to have family who will make a F&F settlement for me and I just want it over.