40k unsecured debt. 75k equity. Was IVA the best option ?

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James.ri
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by James.ri » Fri Feb 24, 2012 6:34 pm
Morning,

I am currently 2 years into an IVA, where the payments have been sometimes challenging of around £500 per month. At the inception of the IVA I had about 40k unsecured debt, through 5 or 6 lenders, but had £75k equity in my house.

I have subsequently been advised that the IVA wasn't the best option for me and a debt management plan (with interest frozen) should have been the best solution. The IVA was needed.

I have checked the paperwork and for the first 3 mths I was in a DMP, but on advice from Debt Free Helpline, I changed to an IVA.

I have now been advised that the IVA has probably been misold and the company are just after their huge fee.

If so, what do I do? Anyone with any knowledge?

Thanks

 

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kallis3
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by kallis3 » Fri Feb 24, 2012 6:40 pm
Hi and welcome,

Who has told you that the IVA was missold? Is this from a phone call or a letter?

Whoever it was has probably got your details from the Insolvency Register and they have no idea of your circumstances.

With a DMP there is never any guarantee that the interest and charges will be frozen and usually not every creditor will agree to it which means that your debt will continue to increase.

You won't have been missold your IVA, DFD are a well respected firm and it won't be a huge fee they get as the creditors will more than likely have capped their fees.

At the end of your IVA you will be totally debt free (apart from your mortgage) and can rest assured that no creditor is going to hassle you and you will have saved thousands in interest and charges.

 

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James.ri
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by James.ri » Fri Feb 24, 2012 7:00 pm
Apologies - first question is supposed to read wasn't needed.

A further finance company have suggested this to me via a phone call.

 

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Adam Davies
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by Adam Davies » Fri Feb 24, 2012 7:03 pm
Hi

If your IVA is working then stick with it.

You have enjoyed protection from creditor legal action and a freezing of all interest and charges whilst in the IVA, something that you wouldn't have guaranteed in a DMP

Who have advised you ? and what are they advising that you do ?

Regards

 

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MerlinL14
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by MerlinL14 » Fri Feb 24, 2012 7:13 pm
James, anyone just cold calling you have got your personal information off the insolvency register. They have no knowledge of your circumstances and will try to get you to go BR using them as the middleman, it is they who are after your money as fee's. If you are happy with the way your IVA is running and most people are, then I suggest that you continue with it.

 

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James.ri
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by James.ri » Fri Feb 24, 2012 7:27 pm
Thanks for the responses.

They're advising I check the fees being drawn by the company, to ensure their appropriate and to enquire to the ombudsman of exactly what financial options would have been available to me, to ensure the company had my best interests at heart!!!!

 

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kallis3
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by kallis3 » Fri Feb 24, 2012 7:35 pm
DFD would not have suggested the IVA if it wasn't in your best interests. The fees will have been agreed by the creditors and to be honest, they earn their money looking after us for the duration.

DFD would also have gone through all of your options with you before you signed up for the IVA.

Who are they James?

 

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Adam Davies
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by Adam Davies » Fri Feb 24, 2012 7:39 pm
Hi

There are only three options, Bankruptcy, IVA or a DMP

Bankruptcy would not be an option because of your equity, so your choice would be IVA or DMP

All fees in an IVA are authorised and agreed by your creditors, they are essentially paying for your IVA by agreeing to receive whatever is left after IP fees are deducted and then writing off any unpaid debt at the end of your IVA.

If you are struggling with payments ask your IP for a review of your income and expenditure.

Regards

 

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James.ri
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by James.ri » Fri Feb 24, 2012 7:39 pm
They were a cold calling financial company based in Bristol, didn't catch their full name. But it did spook me!

 

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kallis3
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by kallis3 » Fri Feb 24, 2012 7:41 pm
If you are ever struggling with your IVA then your IP is the first port of call. People who cold call have absolutely no idea of your circumstances.

 

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hth
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by hth » Fri Feb 24, 2012 7:47 pm
Hi James, from the information you have supplied it is hard to see how a DMP would have been a better option than the IVA.

As others have pointed out the IVA has given you the protection from your creditors, in a DMP they could well have applied to place equitable charges on your property, which would have eaten in to your equity. With £40,000 of unsecured debt it would have taken you longer to repay via a DMP.

Debt Free Helpline are not connected to DFD, they are a different company altogether.

 

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kallis3
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by kallis3 » Fri Feb 24, 2012 7:57 pm
Apologies - misread the first post!!!!

 

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James.ri
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by James.ri » Fri Feb 24, 2012 8:13 pm
Just one last question; Why did DFH start me on a DMP for the first few months, is this common practice, while the IVA is being put together?

 

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norabee
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by norabee » Fri Feb 24, 2012 8:25 pm
Hi

We had similar only the other day, and the company sent paperwork through - when i read it - it basically was offering bankruptcy and they wanted £1700 to do this plus court costs!!! They dropped in things like government website etc that made us listen to them!!! As you can imagine when they called back - we told them no thanks!!!!

 

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kallis3
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by kallis3 » Fri Feb 24, 2012 9:03 pm
Some companies do put you on a DMP temporarily, it's not really necessary but that's obviously the way DFH operate.

norabee - glad you told them where to get off!!!!
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