possibility of my application being accepted

[chubba]

Hi, Yes NR increased the required div. and in order for us to keep the monthly payments down, we accepted the additional year. I think the biggest hurdle was the fact that i had a loan for apx £30000 (incl interest) which i had only taken out with them apx 6 months ago.Which initially pushed me out of their "Yes" box. We are not really the architects of our current situation....We had a shortfall debt thrust upon us after 11 years, without warning.

[thebear29uk]

Hi richards.

Another point that seems to crop up with NR is how long ago you took out the loan with them. If it was fairly recently they tend to reject proposals.

Dave

[BlueShoes]

Hi Chubba
43p/£ to 63p/£ is a huge hike!
We're offering 54p/£ (but don't have NR)
If the creditors wanted to raise our return by 20p/£ we would have no choice but to say no, and file for bankruptcy.
Could you tell us which areas of reasonable expenses they challenged (i.e. where from your budget are yoy getting that extra 20p/£ from?)
Thanks
Blue

[richards]

Thanks for all of your responses. I think that an IVA with a 4th year equity release would give a much better return than bankruptcy. I have had this loan with NR since Jan, 2005, and have not missed any payments on this or other accounts so far.

I phoned them to get a settlement figure last week – this was quoted at £12,123, and they mentioned a rebate of £2,653.53 was included in this. I did not ask what the repayment amount would be if I defaulted on the loan. I am also concerned about my debt with MBNA, as around a third of this is recent.

I now need to find someone to represent me with this application, as I need to progress this as soon as possible. I have contacted several companies so far, and have previously been told that I would be better off going for bankruptcy once I made it clear that MBNA and NR were involved.

I have just applied to open a basic account with the natwest – I hope that this will be accepted.

Could anyone give me a rough estimate of how long it would take for me to enter an IVA? Are there any IP’s in the forum that would be willing to prepare an IVA application on my behalf?

Thanks again for your responses to my post.

Regards,

Richard.

[thebear29uk]

Hi Richard

I can recommend Melanie. She has an excellent track record of success and will make sure that any proposal you put forward is achievable by you over a 5 year period. So many people on this forum post that they are struggling with their IVAs because the amount payable was too high. Others report that they never actually spoke to their IP.

I don't know whereabouts you are based but Melanie is in Cardiff. She can do an interview by phone if meeting up is difficult but I would strongly recommend a face to face meeting.

Regards

Dave

[richards]

Thanks Dave,

I will take your advice on this. I live in London, but I would be prepared to travel if I have to.

Richard.

[richards]

Just a quick update - If i multiply the remaining 90 months of my NR loan by the monthly payment, this comes out at £14,777 - I guess this is what the rebate is about. This means that NR's total percentage of the debt is higher, giving them more say in the matter.

Richard.

[thebear29uk]

Hi Richard

You can use the link on Melanie's replies to go to her website. Don't quote me but I think Melanie can do interviews in London occasionally.

Good luck

Dave

[MelanieGiles]

Hi again

The Northern Rock loan is still less than 25% of your overall debt, so even if they reject your offer they can be outvoted by the other creditors.

I and my team would be delighted to chat to you off-line if you wish with regard to finding out more details about your current situation.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[richards]

Hi, Thanks for all of the advice. A big part of resolving debt is accepting it – I have really had a problem with this since my original post. I have decided to aim for a short-term DMP, followed by an IVA, as Northern Rock is one of my creditors, and hopefully the IVA process will be easier next year. My current situation is detailed below:-

Income
Salary - £2,111.71

Outgoings

Outgoings ex. Unsecured Credit Payment
Mortgage £772.00
Insurance £26.45
Secured Loan (approx 22k remaining) £309.00
Service Charge £300.00
TV Licence £11.49
Council Tax - Paid until March, 2008
Broadband £21.99
Electricity / Gas £62.00
3G £30.00
Food / Housekeeping £150.00
Travel – Paid until July, 2008
BT Telephone £13.33
Total Outgoings £1,696.26

Service Charge
Currently paying additional reserve amount of £1800 p.a. to complete building works, in addition to standard £1800 p.a. service charges. Currently in year 1 of 3 of the additional payments, and have paid £3,600 this calendar year. This is set to remain the case for the next 2 years.


Council Tax
Paid in full until next year – estimate of £80 p.m after this.

Travel
Paid in full until next year – estimate of £90 p.m after July, 2008.

Unsecured Debts

Creditor Detail Balance and % Total Debt
Halifax inc. 3k O/D 11,332.63 17.64%
Egg £8,599.83 13.38%
Alliance & Leicester £10,450.24 16.26%
Morgan Stanley £4,228.29 6.58%
Capital One £4,871.05 7.58%
Marbles £6,000.00 9.34%
MBNA £6,937.85 10.80%
Northern Rock Loan £11,835.00 18.42%
Total Owed £64,254.89

Property Details

Property Value £187,000.00
Mortgage owed £126,954.00
Halifax Loan Balance £22,123.00
Available Equity £37,923.00
Total Unsecured Debt Minus Equity £22,992.94

I currently have approx. 37k equity, but have been refused further lending for consolidation by the Alliance and Leicester, due to my high credit balances. I had thought of trying to find a lender to give 125% of property value as a re-mortgage, allowing me to clear all debts, but this does not appear to be possible. I am also unable to find any loan for this amount from any lender.

I am now in a situation where I cannot meet all payments without ‘robbing peter to pay paul’, and I cannot continue to do this. I am trying to avoid bankruptcy as I work for a major retail establishment, and work closely with the finance department. Although I have equity in the home now, it is nowhere near enough to clear my debts, and I feel that an IVA followed by equity release would give the best possible offer to the creditors.

I am willing to enter a 6-year IVA, and also release equity during the IVA, providing that I can find a lender who would be prepared to do this. I can realistically pay around 400 p.m at the moment, and this will change when my council tax / travel are due for renewal.

No post would be complete without a couple of questions:-

Do you think that I am doing the right thing?

If I were to enter a DMP, when do I stop making payments to the creditors (I have not missed any payment to date, and currently have a credit score of 490)?

I have opened a basic bank account with the NatWest – is this organisation linked to any of the above creditors?

Can overdue payments on a credit card provided by my mortgage lender be attached to the mortgage?

Is it likely that a DMP or IVA application will be rejected, due to the amount of available equity being more than half the total owed?

Thanks,

Richard.






I.O.U.

[MelanieGiles]

Hi Richard

I cannot quite understand why you are doing a DMP to then be followed by an IVA? Your case does fit current IVA criteria, and as Northern Rock are only 18% of the overall debt, it should be possible to get it accepted.

Your very detailed post indicates that you are in control of your finances, but obviously you cannot afford to make the contractual repayments. I cannot see the point of a DMP with such high debts, but the sooner you make your mind up about what you are going to do, the sooner you can try and stop the interest. This is automatic under IVA proceedigngs, but less certain in a DMP - and an IVA will conclude at the end of the fifth year, whereas a DMP will continue until the debts are paid off in full.

Have you discussed your case with an insolvency practitioner yet?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi
I must agree with Melanie.
Be aware that NR may seek to secure their unsecured lending if you enter into a DMP.
Take advice from a IP as you have a good case for an IVA.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp