rejected ivas???

[kiki]

hi

just wondering does anyone know how many ivas are rejected now a days? with the credit crunch at the moment i would think creditors are more likely to take what they can get before people declare themselves bankrupt??

thanks
kiki x

[andrewgoodman121]

I don't think that many IVA's applications will be rejected because of the current downturn.
The Banks have shot themselves in the foot by OVERLENDING!!! to people who have no chance whatsoever of paying it all back due to the cost of living these days and changes in peoples circumstance.
Banks are only interested in living on the interest that you have borrowed and the more you borrow the more interest you will have to pay.

When you default and can't pay back, the only alternative is for you to come to some sort of compromise eg. DMP or IVA.
At least the Banks are getting there money back somehow etc..

The only problem now for you is that you are now seen as a CREDIT RISK!! and will not be approved for any more borrowing.

The Banks are finding it hard now to lend to people as they are now seriosly worried on getting interest and there money back without people defaulting.

[size5]

It is a tricky question to answer really and depends which way you look at it.

You can argue that the vast majority of IVA proposals are approved simply because no IP will put a proposal forward without being extremely confident that it will succeed. Speaking for myself, it is rare to have a case rejected, and I know Melanie prides herself on a fabulous success rate also.

However, at the same time, you have to bear in mind an awful lot of cases will never make it passed the initial enquiry stage simply because, for whatever reason, an IVA is not the right product for that client or set of circumstances so for every 100 enquiries you get, maybe only between 5 to 10 may be IVA cases.

Hope this helps.

[MelanieGiles]

Agreed Size - although my gut feeling is that we are going to see more rejections, due to creditors claiming that they would be better off in DMPs. Are you noticing this more and more because I certainly am - although fortunately for our clients we are still managing to outvote the majority of these at the moment.

[size5]

Unfortunately that is true, and I am sad to say that I agree with your prognosis re rejections as well.

Regards.

[acsn]

Interesting stats, hadn't realised just how many debtors petition for their own bankruptcy. As Melanie suggests must be creditors trying to push DPM's or debts just being unmanagable in an IVA with the variations being put forward by TIX and the likes.
And remember this is all prior to the credit crunch.


Annually, total individual insolvencies in 2007 (at 106,645) were 0.6% less than in 2006 (107,288). Bankruptcy orders (at 64,480) were 2.4% higher than in 2006 (62,956), while IVAs (at 42,165) were 4.9% lower than in 2006 (44,332). Prior to this, year-on-year, total individual insolvencies demonstrated an increasing trend from 1997 to 2006, with particularly steep increases towards the end of this period. On a quarterly basis, Q4 2007 saw the fourth consecutive decrease in both bankruptcies and IVAs since the levels reached in the fourth quarter of 2006.

For bankruptcy orders there has been a pronounced shift towards debtor’s petition bankruptcies and away from creditor’s petitions in recent years. By the fourth quarter of 2007, 83% were made on the petition of the debtor. On an annual basis, this figure has risen consistently from 53% in 1998 to 84% in 2007.

[kallis3]

And of course in a DMP they get everything back that they lent you (minus some of the interest).

[Adam Davies]

Hi
If the DMP runs the full course !!!!

[kallis3]

There is that!

I know that if mine had run it's course there was a good chance that I would have been pushing up the daisies before the end!

[Adam Davies]

Hi
Many people end up on neverending debt management plans as some creditors still add charges and interest during the DMP.This is a big advantage of an IVA,no further interest or charges are added.
It is important that once in a DMP you check with your provider that interest has been stopped or supressed
Regards

[size5]

Good point Andy, but as Philip Beck points out on another thread today, and Melanie above, creditors may well reject IVA proposals on the basis of a greater return on a DMP with the DMP taking a while longer.

You would hope, therefore, that those creditors would have the good sense to freeze the interest on the DMP proposal!!

As they say, hope springs eternal.

Regards.

[plasticdaft]

Good point Andy, but as Philip Beck points out on another thread today, and Melanie above, creditors may well reject IVA proposals on the basis of a greater return on a DMP with the DMP taking a while longer.
You would hope, therefore, that those creditors would have the good sense to freeze the interest on the DMP proposal!!

As they say, hope springs eternal.

Regards.
A while longer would be a very big understatement!!!
It would be interesting to note if No voters in creditors meetings became keen to freeze interest payments on DMP's!!! I think not though.

[size5]

Totally understand your point Plasticdaft, in many respects it is like asking the Lion to stop eating the Gazelle and switch to grass instead!!

If creditors reject IVA's on the the basis that they would prefer DMP's and then refuse to freeze the interest, then in the long run they will lose out by forcing more people into bankruptcy and getting little or no return.

Regards.