I really don't know which way to turn now.

[m.b]

Hi. Was advised that I could get a quick and final IVA by my advisor. My house would be remortgaged and the equity would be given to the creditors just leaving me with my mortgage to pay. I understood that this mortgage rate would be higher as it was obviously for a higher amount.

I accepted this proposition as the timescale given was six months. All went well and I paid the first amount to the adviser but today I have been contacted by my IP. She knew nothing about the IVA being quick and final, my advisor did not mention it and on further investigation she doesn't feel I would be able to apply for one anyway. I am now left feeling very let down by my advisor even though he's from a very reputable company and I thought I was ok trusting and paying him. I also don't know what to do now. The idea of a five year IVA terrifies me and after year four my house has to be remortgaged to release some equity anyway. I am however unsure how much equity will be released at that time. I am now wondering if I should simply remortgage myself and contact the creditors directly and see if they will accept an offer from me and use the equity to pay for this. That way I can sort this out within a matter of weeks rather than years. I am also due to pay my second payment to my advisor.

However I already feel that I have been let down and misled from him so don't feel I should make this payment as he hasn't actioned what we agreed to. Any help would be greatly appreciated as I really don't know which way to turn now. Thank you.

[MelanieGiles]

Hi mb and welcome to the forum

Who do you mean by your "adviser"? Is this someone from a debt management company or a general financial adviser? How much equity do you have in your property and how much do you owe? Why does the IP you have been referred to feel that you cannot remortgage? Most mortgage brokers can effect loans of 90% loan to value, so I wonder why the IP feels this will not raise sufficient monies?

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

[m.b]

Hi. Yes by advisor I mean somebody from a debt management company. I have 82K of unsecured debts. My house has recently been valued at 85K and I owe 24K on my mortgage. Am I right in thinking that the equity on my house is about 61K?

The IP said that quick and final IVA's are only offered and approved if at the end of a month I have £0 left to offer a creditor. I don't understand this as if I had £0 left then I wouldn't be in a position that I could re-mortgage anyway. I told them that out of interest today I got a re-mortgage quote. The quote was to free up 50K in equity (this was a guestimate on the equity and this equates to about 60p in the £ which reading this forum seems an excellent offer). The repayments would be just under £640 a month. The IP said this wouldn't work and wasn't possible as I wouldn't be able to afford the repayments. The IP said that they have worked out that I will be making a monthly payment to them for £370. However I am currently paying £245 a month on my mortgage so this combined with the £370 totals £615 anyway. TA figure just £30 less than the remortgage figure and remember this is only the first remortgage quote I have got.[?]

I simply do not understand. I am feeling very worried about signing anything at the moment but being encouraged to get my signed forms back to the IP asap. I don't want to sign anything as I don't really understand what I am or am not agreeing today. What I wanted was a quick and final solution. I didn't even know such a thing was possible but the advisor at the debt management company suggested it and advised it. I am now so confused about the whole thing.

Thanks for the reply [:)]

[MelanieGiles]

Your present IP firm have clearly missed the point of your offer which I feel is a very good one. Do not enter into an agreement you feel uncomfortable with, and I strongly recommend you seek a second opinion before proceeding with a contributions based offer.

I regularly propose many proposals for clients along the lines you are suggesting, and do not quite understand the advice you have received - although I am not sitting with a full file of facts of course!

Who are you currently using?

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

[m.b]

Thanks again for your reply. I was initially advised by Thomas Charles and my IP is now somebody in Wilson Phillips but I can't put my hand on their name right now. Have to admit I feel a little happier following your reply Melanie. Knowing that things like this have been done in the past and can work is a positive light for me.

[m.b]

Hi. Just me again. Got a couple more questions which I would like some expert advice on please. Firstly if I was to re-mortgage then make a full and final offer to my creditors would this be something I could do myself or does it have to be done through an IP? The reason I am asking this is firstly because it will save the IP costs which will obviously give me more money to offer the creditors. Secondly I wouldn't have an IVA on file for 6 years so if my re-mortgage was initially on a two year fixed basis then after that time I should be able to move it to a high street bank and a much better rate. Obviously if this was done through an IP then the IVA would remain on file for six years and there is no way I could move the mortgage then. Thanks for all of your help. I can't even begin to express how much it is helping me.

[MelanieGiles]

Hi mb

You could remortgage and make the offer yourself, but if you have say more than four creditors you may find that you cannot get to speak to the decision makers, they all want a different deal and you go round in circles.

On of the advantages for you of doing this via an IVA, is that they all have to make a decision at a certain point in time - ie the day of the creditors meeting. So at that stage you will know exactly where you stand.

I am so glad that you are finding the forum of assistance, and good luck with the IVA.

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

[m.b]

Just a quick question. I am a little confused about the amount of creditors. We are only dealing with 2 banks. Sainsburys and Barclays. However with Sainsburys we have a credit card and a loan. With Barclays we have 2 credit cards, 2 loans and an overdraft. So does this mean I have 2 creditors or how many does it mean I have? Also one of the Barclaycards has now been passed to Mercers and the other one will soon be with them too. So are Mercers another creditor too? Thanks.

[MelanieGiles]

You could look at that both ways! Personally I would try and effect a settlement with the banks directly first, and if that fails perhaps an IVA is the most appropriate solution. Mercers are only a debt collection company and not a creditor.

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

[m.b]

Thanks Melanie. So I have 2 creditors? Is that right?

[MelanieGiles]

You have two creditors with five accounts.

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

[m.b]

2 creditors with 5 acounts. Thank you so much for clearing that up for me. OK last question. If I contact them do I contact all five accounts seperatly or just the 2 creditors and list the accounts in the letters? Thanks.

[MelanieGiles]

Try and find someone in the loan departments who can advise you whether they can also decide for the credit card and overdraft debts. Suggest you call first, rather than write - ask to speak to someone in the collections or insolvency department for further advice.



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

[m.b]

Melanie. Thank you. You are a star. [:)][:)]

I will keep you posted how I get on. Thanks.

[go_4_broke]

Hi mb

I think you could do worse than ask Thomas Charles why they have placed you with an IP who clearly does not understand, or is unwilling to implement your proposal.

You have paid them a fee to arrange this and clearly you do not want to be paying them any more until the matter is resolved.

Although you have two creditors if you decide to negotiate yourself you might find you are having to deal with the credit card, loan and overdraft people separately, unless you can get them to amalgamate the amounts.

There are advantages to doing it yourself, mainly being that you make your offers conditional on the debt being marked as 'satisfied' on the credit record, in an IVA it would be marked as 'defaulted'.

Also, in an IVA you are restricted to offering your creditors exact pro-rata amounts. Outside of an IVA, you negotiate individual settlement amounts as long as you can get the whole lot out of the pot. The principle of 'Divide and Rule' is a very useful one when dealing with creditors!

Make sure you get your acceptances in written form and in 'full and final settlement'. You don't want your creditors pocketing your offer and then pursuing you for the rest!

If it all looks a bit onerous, you can always revert to plan A. Just make sure you engage an IP who understands your proposal, mentioning no names of course!

-Best

Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'