Your comments would be appreciated

[jeff.s]

Hello there, found your very very useful web site by doing a google search, which I had all this information to hand as i went through the process of arranging my IVA, I have to say my IP was excellent and went through everything. My Question is about this IVA Council, yes I received their letter just before Christmas Eve, although my details are on public record do they have a right to be able to right to you without invitation? This letter sounds very qenuine until i found your web site and learned more. Your comments would be appreciated here, many thanks in advance. Jeff.

[MelanieGiles]

Hi jeff and a ware welcome to the forum

There is nothing to stop anyone from writing to anyone in this country - I guess that is what living in a free society is all about, albeit it can be irritating sometimes.

The IVA Council appear to be challenging the advice given by several firms which they refer to as "IVA factories", on grounds that improper or insufficient advice was provided by them to their clients before they entered into IVAs. It is not clear what evidence they actually have of potential "mis-selling", but you can find out more information about their corporate mission on their own web-site.

If you are happy with the advice you were given when you approached your own IP, were provided with details of all options available to you and not just an IVA, and made your own decision about the choice you made rather than being co-erced into an IVA, then it is unlikely that the IVA Council can be of assistance to you.

As a matter of interest which IP firm are you with, as I was not aware that persons in IVA were still being targeted.



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

[Lisa2009]

I suppose its just like credit card companies and such like. They find your details and write to you. Its then left entirely up to yourself if you choose to ignore these letters. Personally, i would throw it in the bin but thats just my opinion.

mrs skint

[jeff.s]

Hello Melanie, many thanks for your comments here, much appreciated and apologies for my earlier spelling mistakes!!!! I was actually referred by the Debt Councilling Service to The Payplan Partnership who i found very very supportive. I had previously to this made contact with a number of these factory management companies and almost signed up to one of them you could say in a matter of desperation, but i saw the light at the last minute and cancelled! I have found this site so useful to the extent that i will be checking through my iva papers in case I have any further unanswered questions. In the meantime, I think the best thing i can do to this letter from the IVA Council is to bin it!!!!! Kind regards and thank you. Jeff

[MelanieGiles]

Jeff - I am not sure whether Payplan are one of the IVA Council's targets, but as you have had a letter recently then one must assume so.

Please let us help you with any other queries you have - that is what this site is all about as we learn from each other - even insolvency practitioners!

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

[jeff.s]

Hello again Melanie, I have had a look through my initial IVA proposal papers and the subsequent statement on the chairman's report which was issued after my creditors meeting back in June 2006. During the IVA process, my home was in fact valued before my proposals were drawn up, however all my other assets are NOT included in my proposal. As there was a clause in my Debtors Proposals concerning my home which I jointly own, the clarification I got from Payplan did not fully explain what this actually meant? As I understand, as stated "based upon the valuation provided to the nominee and the claims of secured creditors, 75% of the equitable interest in my residential property as indicated by the summary sheet and outcome statement, will be realised and paid to the supervisor before completion of the arrangement" I take this as basically they will look to recover half the equity in my property before i will complete this arrangement. So although I am making payments of £446 over 5 years totalling £26,760 I will be expected to pay out further sum of money or have this arrangment extended if there is insufficient equity in my property. How would my IP come to this final figure?

Regards

Jeff

[MelanieGiles]

Hi Jeff

Is the property owned solely or jointly? And was the property issue further modified at your creditors meeting - check your Chairman's Report to see. And could you clarify what other assets were not disclosed to your creditors?

If there was no further modification at the creditors meeting, this clause of your proposal effectively confirms that you have agreed to raise 75% of your share of the equity before the end of the agreement. What is not clear is how this will be financed, and what happens to your IVA payments when you are likely to be paying a higher mortgage to accomodate the equity release. One assumes that Payplan envisage that this equity raising will occur right at the end of the IVA, when you will then be facing ongoing higher mortgage payments for a considerable time.

Surely this important issue, involving your home, was discussed with you at length by Payplan when they were assisting you to formulate your proposals?

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

[jeff.s]

Hello Melanie,

This property is jointly owned and on checking the Chairman's Report there are no further modifications to what was stated in the original proposals regarding the Debtors home. In the original proposals there is a clause that states that should I be unable to realise my interest regarding the equity, then the supervisor may call a meeting of creditors to consider varying this sum or duration of the arrangement which shall not exceed 72 months. As I previously mention, when i queried this issue, the explanation i got was not too reassuring as i felt that the person I was addressing this issue to, did not fully know the answer! There has been a restriction placed with the Land Registry but I am not really sure why this was done and the co owner of the property had concerns about this. Had I been fully informed of the need to raise 75% at the end of the agreement, I would have had serious reservation on signing this agreement as if i am already on a tight budget, how am i supposed to raise this additional money especially if there is no equity judging by the way the housing market is going plus, being able to raise these funds against the property in the first place. As we have already had a number of rate rises increases. My IP did not seemed too concerned about this when i spoke to them during my first yearly review, all i was informed of was the importance of maintaing these payments!

Regards
Jeff

[MelanieGiles]

Hi Jeff

It is this very thing that the IVA Council are seeking to crusade. People like you not being given appropriate advice about the important things surrounding their IVAs, such as the need to raise equity during the arrangement.

That said, if there is no equity in your property then 75% of zero is zero, so there may be nothing to raise in any case, however the proposal seems to indicate that this is to be based upon the original value and not one taken at any time in the future.

What figure was used for your property value for the purposes of the IVA, and how much did you owe on the mortgage at that time. Take this figure, divided it in two to establish your share of the equity, and then work out what 75% of this sum is. This is the figure that you will have to find before the end of the arrangement - and can be paid by extending the arrangement by an additionla year to fund ongoing payments towards this.

It is a shame that you do not feel that this was properly explained to you, but your IP will no doubt tell you it was you who signed the agreement and therefore you ought to have understood the consequences. What was your understanding of this clause when you signed the proposals, and what advice (if any) did your IP give you?

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

[jeff.s]

Hi Melanie,

The property was valued at 195,000 with an outstanding mortgage of 198,000 which is an interest only mortgage.I think the property is currently value is £220,000, so at the time of having the proposal drawn up there was no equity.

I apprecaite your comments regarding the additional funds I may have to find if I have equity in my house, depending on this figure will depend on whether I could pay this off if it is small enough or extend my arrangement as i know the co owner does not want to increase the mortgage any higher!

My understanding of this clause was vague as in the chairman's report, there was no mention of this equity issue and thought at the time that the chairman's report was final.

I felt at the time the ultimate importance of getting this IVA application approved in order to take the pressure off me during this stressful period so feel that this issue was somewhat not fully looked into.

When i had my re-view, it was mentioned to me that i could get a re-mortgage and pay off my IVA early, once again there was no mention of the equity issue which i did not ask about!

Regards

Jeff

[MelanieGiles]

OK - so it clear that the basis for valuing the property is £195k, but what is not clear is whether the secured creditor claims are to be atken account of at the same time or at the time that you liik to raise the equity. In other words, the wording of your proposal is ambiguous, and you could probably argue that there is no extra money ro raise as there was no equity in your property at the beginning of the IVA - but you may need to take specialist legal advice on this matter.

The fact that your IP appears to be relaxed about this matter, amy indicate that they do not believe that any extra money is due, but best to get this clarified at an earlier stage rather than wait with a black cloud hanging over you for the rest of the IVA term.

I suggest that you now formally approach your IP for guidance on this matter.

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

[jeff.s]

I certainly will write to my IP to get clarification on this point.

One other point that i did mention to you before was why there was the need to have a caution placed with the Land Registry?

My Co owner felt pressured into signing this however I did put our concerns in writing to Payplan and highlighted that the wording on the agreement could have been worded better to reflect that the co owner should not be affected by my IVA, this was to follow up a previous conversation!

Regards

Jeff

[MelanieGiles]

Cautions over property are unavoidable these days in property related IVAs, and this will remain in place until the IVA is concluded.

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
Again another case of misunderstanding the ins and outs of the equity release,and again blame must lay partly with the debtor for not asking but mostly with the IP for not explaining fully.Not a case of mis- selling though,on the info supplied.
On the subject of the IVAC Melanie,have they contacted your clients to apologise for sending them the initial letter,suggesting mis-sold IVAs ?
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

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

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

[Sensible77]

Am I correct in thinking that the equity release payments are taken off the current monthly IVA payment at that time at a limit of 60%? e.g. If the IVA payment is £500 a month, the equity release payment is a maximum of £300 and the IVA payment £200. I seem to recall Andy Davie mentioning this in other posts.