will I lose my caravan in an IVA

[allen_r]

I have a static caravan that my wife and I use for weekend breaks.I am purchased it with a personal loan that still has 2yrs.to run.will I lose the van in an IVA

[chris_]

Your caravan would I am sure be classed as and asset and as such, the value of it would be used as part of the indicator to your creditors as to whether they would receive more in an IVA than a bankruptcy.

Remember though, an IVA is NOT bankruptcy and your assets will not be sold - an IVA is an agreement whereby you the debtor pay regular and possibly lump sums of cash over a period of up to 5 years based on your disposable income.

However, where you could have problems is convincing your creditors that you should be allowed to pay for site fees etc for the caravan during the IVA - they would probably take the view that that money should be theirs.

You need to talk directly to an IP, because if your IVA was offering a high return - say 90% you might just be allowed to do it, but if your return was going to be only 30% then they are going to be much stricter.

In a nutshell, they couldn't take the caravan, but they could stop you spending money on it.

We have seen however conflicting stories on this forum with regards allowing for things like this and you need to speak with an IP - Keep an eye out here for posts from those who know more than I.

Chris.

[MelanieGiles]

Sorry Chris - I don't agree with that one. If the caravan has value, and it is surplus to requirements ie not being lived in permanently, then creditors will expect to see it sold and the proceeds to be included in 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

[chris_]

That's strange Melanie, I know my case is rather different
as I was self employed and it was six years ago, but when I
entered into my IVA I had a house with a small amount of
equity in it, and I didn't even live in it - it was rented
out and the rent paid the mortgage.

I was allowed to keep this totally out of my IVA as part of me
agreeing to extend the IVA from 3yrs in the original proposal
to 5 yrs.
Unfortunately I didn't have the money left to act as a good
landlord and subsequently had to sell the house - before house
prices shot up I might add, and the small amount of money I
received ended up propping up my IVA anyway as I had to declare it
in my income.

I insisted on keeping the house out of the IVA - I flatly refused to
let them have any claws in the house or the equity in it whatsoever and they accepted this. (The housing market is different now so I doubt they would do this today)

The point here is that if you can offer 90% payments in an IVA or only 10% in bankruptcy then you should be able to dig your heels in
and let your creditors make the decision.

90% IVA and keep caravan out of it, or 10% in bankruptcy with caravan - which would you go for ?

Or am I missing something ?

Chris.

[ivoriva]

I would say from my experience it is no longer just a case of how much better off the creditors would be compared to bankruptcy. That is how it is supposed to work, but I think now they want people to be on the breadline and learn a lesson through hardship, or be 'rehabilitated' as I have seen it called in some documents!

[chris_]

Isn't an IVA supposed to be a legally binding AGREEMENT between a debtor and the creditors, with the supervisor carrying out the terms of that agreement on behalf of both parties?

I suppose under the pre 2004 reforms, the whole idea was to enable self employed 'entrepreneurs' to carry on their businesses and contribute to the economy, rather than go bankrupt for 6 years. This was the situation I was in and an IVA makes sense.

With IVA's lasting 5 years and bankruptcy down to 1+ years the system has obviously moved much more into the consumer debt market rather than business debt.

I know back in 2001 I would have taken a 1+year bankruptcy straight away.

Are creditors really shooting themselves in the foot over debtors 'negotiating' their IVA's ? - doesn't make sense to me - 90% or 10% Hmmm...

Chris

[ivoriva]

Well, it seems to me creditors are setting the benchmark for financial return a bit too high for many people, as a result a lot of consumer debtors arent getting an IVA - or they are getting them then failing them because they agreed to something they couldnt really afford. It seems to be a stance from creditors that has prevailed this year (there are several cases of posters on here who got bullied into higher payments then failed within months and went bankrupt, giving next to nothing back to creditors). This stance seems to have arisen because of the increased numbers of applications for IVA's from consumer debtors, sometimes of course being pushed by unreputable debt management 'factories'. And now it seems the creditors look at all IVA proposals a bit suspeciously. Ironically, the insolvency legislation is set to make the IVA more accessable and easier to obtain for consumer debtors - even to those with smaller debts, with SIVA's. And this seems to have the backing of the banks.

[chris_]

If this is really the way creditors are operating the IVA system, then it could be argued that rather than help with the debt situation in this country, it will actually hinder it - if creditors are willing to take 10% in a bankruptcy over say 40% in an IVA then that is plain stupid.

Chris.

[ivoriva]

It seems like they are ever more willing to take that risk, at least a certain group of them.

Back to the caravan question, I would probably side on mel's stance. This is because they wont allow you the expenditure to make use of it anyway, so it serves no useful purpose. So they will probably expect it to be sold off and the proceeds go into the IVA.

[chris_]

Yeah, that's what I put in my original post - it was the fact that the creditors would not allow you the running costs of the caravan that would be the issue for me.

It is therefore fair to say that if you can't run it then it is pointless arguing over keeping it -

Chris.

[MelanieGiles]

The caravan is an asset and that is a matter of fact. Chris - you would be unlikely these days to have got an IVA accepted by creditors if you had an asset which could have been sold to produce more money. Times have moved on since then and so have the creditors attititudes.

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

[Oliver]

I am with Mel on this one. The Creditors can't repossess the caravan but they can refuse to accept an IVA unless the caravan is sold and the proceeds are paid into the IVA. I can't imagine many creditors would overlook this asset as the clients do not reasonably need use of it to live. If the loan for the caravan is secured then this will have to be paid via the proceeds of the sale, if the loan is unsecured then this will be included in the IVA.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[chris_]

I suddenly feel very old

Back in the 1830's when I set up my IVA the principle was that you made an offer to your creditors and they either accepted it, made a counter offer (ie modifications) or rejected it.

The IVA could be negotiated within reason and it was just a case of where the two sides would draw the line - that is how I managed to keep my hovel, but had to stop paying into a pension.

These new fangled IVA's seem then to be more a case of the creditor telling the debtor what he would accept rather than the creditor accepting what the debtor offers.(try saying that 3 times quickly!)

I may be being pedantic here, but a debtor is not forced to sell assets in anything other than a bankruptcy - they can only be included in an IVA by the debtor agreeing to it.

If the creditors are rejecting anything other than total surrender by the debtor then it must be because they see that overall it is working and therefore in their interests to do so.

Rather makes a mockery of the word 'voluntary' in the title.

90% payout versus 10% bankruptcy pay out - seems straightforward to me - but then I remember the good old days.......frys chocolate cream and soap in the bottom draw, oranges at christmas...those were the days.

[ivoriva]

lol - yup, those were the days indeed! For me it would of been a packet of spangles and getting manic miner for the speccy at xmas. Life was a lot simpler then, dont you think?

[Skippy]

I always used to get an orange in my stocking at Christmas, and I usually used to get an apple as well - I'm showing my age now! Mmmmm, Fry's chocolate cream!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/