www.iva.co.uk

Our IVA has just been rejected by Northern Rock. And now I'm desperate for advice. Should I consider bankruptcy?

SB

Hi. Could you post more details on your debts etc

Hey sobroke, really sorry to hear that. What has your IP suggested now? If you post a few details of your offer then the experts will be able to help. X

Can you find out from your IP why Northern Rock rejected your proposal ? Usually when there are insufficient votes at the creditors' meeting the IP will adjourn the meeting for up to 2 weeks and go back to creditors to see if they will change their mind if the deal can be improved. Presumably your IP spoke to NR and they said they wouldn't change their mind ?

If the IVA really is finished, then you have 2 options left, either a debt management plan where you pay your debts in full over an extended period, or you petition for bankruptcy.

Before you consider a DMP, work out how long it will take until you have repaid your debts in full, and don't do it if this is excessive, like over 10 years. Also, if in a DMP, make sure that none of the creditors are continuing to charge interest while you are in it, otherwise you could find that the interest being charged means you'd mever get out of debt.

and on DMP don't forget to add approximately 15% of the total debt to cover DMP charges.

Hi there sobroke,

so sorry to hear your news and hopefully you will get advice on the next route to take, try not to worry.

One thing I am concerned about is our main creditor is NR, we have paid the loan for four years now so have six years remaining to pay, I have read so much bad press about NR and I am very worried that ours will be rejected.

Trina x

Hi thanks for everyone's advice. It's calmed me down a bit. NR said that we didn't have enough debt and would be able to pay it off over 30 years. (It's a together loan). All our other creditors accepted 40p in the £. Our IP is going to ask them again and adjust the figures to 6 yrs. But she didn't seem optimistic. It's about £64000 between 2 of us HSBC, NR biggest about 30% then Llyods, M&S and MBNA. Currently negative equity in our house.

SB

Hi Trina, saw your reply after i'd posted. Ours is a together loan with our mortgage so very different to yours. I hope yours goes through ok.

SB

Hi,

Was just about to ask what a together loan was!!

It's very strange as our debt is almost the same as yours. I must try to stay calm and not worry about it but it's so difficult.

Good luck to you

x

A together loan is a 125% mortgage offered by Northern Rock, can see why they got nationalised, can't you.

Personally I think it's highly unrealistic for NR to think you can pay off your together loan in 30 years when you have other debts that are crippling you, but that's their thinking and probably why many IPs are reluctant to do IVAs where NR is a major creditor.

Hi sobroke,
I'm so sorry the IVA was rejected first tiround. Hang in there - would anyone seriously sign up to apying back a debt over 30 years??!!
Thinking of you and hope your IP can get an agreement second time around,
Stay strong and positive,Hugs,
Chardonnay

It sounds to me as if your IP is talking to the wrong people at Northern Rock. If the proposal has merit, and represents the very best offer available, then they will usually accept it - but saying that the debts could be repaid over a 30 year period is not usually a criteria point.

The together loan product is not actually part of a 125% mortgage, but is an unsecured element of lending which was advanced at the same time as the main mortgage at the same interest rate - usually a lot lower than standard unsecured loan rates. So the loan was over a very long period - giving Northern Rock a long term return on their investment, but allowing their customer to benefit from reduced monthly repayments. Whether these products were wise is mute point, suffice to say that it is no longer an available product in today's market.

It may be beneficial to find out exactly why they have rejected, and see if your IP feels able to negotiate a settlement. If not, you may wish to seek a second opinion, nefore considering bankruptcy or a never ending DMP.

If you can't get anywhere with your IP, SB, give Melanie a call. I believe Melanie has a very good relationship with NR. Worth a try. Good luck, X

Hi,sorry to hear your bad news. Northern Rock are also one of our main creditors, although it is an unsecured loan rather that a together loan. I must admit, despite all the bad things I have read about NR, they have actually been quite symathetic with us over our situation. We wrote to them very early on explaining we had a debt problem and offered them a token payment. They did actually agree to our offer after we sent them a full income and expenditure report but we have since decided to enter an IVA as our debts are too big to attempt a DMP. I'm just hoping and praying that they aggree to our IVA proposal!

hi sobroke

i am so sorry your iva has been rejected!

my hubbys main creditor was nr, 2 loans with them and our iva was accepted in april. our ip is melamie, like vicki says it may be worth speaking to melanie as others have said she has a good relationship with nr!

good luck i hope things get sorted for you!

keep posting we are all here to give you support

love barb x