Should an account still show as a default after IVA completion?

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claire824

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Post by claire824 » Tue Jan 08, 2019 2:02 pm
Hi there – my husband and I had our IVA proposal accepted in February 2017 and received our certificate of completion in April 2017.

My husband had a credit card in his name as part of the proposal.
On his credit file with all three main agencies, this debt is marked as default from March 2017 onwards (after they received their dividend from the IVA).

The last payment to them was made in January 2017, February 2017 shows as AA (account in early arrears). The defaults appear from March 2017 onwards until present.
The provider received a dividend from the IVA between the February and March 2017 dates (there’s a change in the balance to reflect this).

We have been told that a few mortgage providers will consider us again once we are three years completed from the IVA, although we understand this itself will remain on our record for six years – so we’re keen to improve our credit rating as much as we can between now and then.

We were not aware individual debts from our IVA would continue to be marked as default (this is the only one however).
The provider tells us they are within their rights to do this, and will not marked my husband’s account as settled or satisfied.

Do we have any recourse here? Or is the provider entitled to do this?
They have told us they can keep this on our file for up to seven years – surely it can’t be right that this continues to be marked as default each month until then?!

Foggy

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Post by Foggy » Tue Jan 08, 2019 2:31 pm
Defaults remain on record for 6 years from the date of default --- so in this case, until 2023, as will the IVA itself. They are not defaulting every month, but merely confirming that it is still in default, which is correct.

I have my doubts about the information you have been given regadring the lenders being willing to consider you 3 years after completion. In most cases I know of they will consider you after the removal from your credit files. Some cite anytime after, others cite various periods up to 6 years after and a few never! We have had a few instances on forum where people have used brokers inexperienced in IVA's and had agreements in principle which have subsequently been refused when the full search is made.

Might I suggest a chat with Ryan and / or Shaun. They are two whole of market brokers who post on here and have helped many ex-IVA'ers get mortgages at "High Street Rates".

Their details can be gleaned from their member profiles:

Ryan: memberlist.php?mode=viewprofile&u=18488
Shaun: memberlist.php?mode=viewprofile&u=22837

Also have a read here for credit clean up info: https://www.iva.co.uk/what-does-an-iva- ... dit-record
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

claire824

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Post by claire824 » Tue Jan 08, 2019 3:11 pm
Hi – many thanks for coming back to me.

We are not planning to apply for a mortgage again any time soon, but just wanted to check how the market would view us. We have good affordability and all other credit history is in good order, bar our IVA settlement and this one creditor’s continued default ranking.

By way of background, our IVA was due to very bad negative equity in a property purchased shortly after the market crashed. Family circumstances meant we were unable to continue to pour money into a property that would continue to show in the red for the reminder of the mortgage term. This wasn’t a lightly chosen path, but our only option to make a clean break. This second creditor was also included in the IVA so we had an increased chance of getting it accepted by our mortgage provider.

Thanks for your suggestions.

It sounds like the provider is within their rights to continue marking us in this way then – we just want to do what we can now to help ourselves in the future – and guidance around this seems quite unclear. I guess the best way forward then is simply to add a notice of correction to our file and explain that this debt is part of a settled IVA?

Ryan

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Post by Ryan » Tue Jan 08, 2019 3:40 pm
Hi Claire,

With regards the mortgage possibilities there are indeed Lenders who will consider applications 3 years after early settlement, it is generally subject to credit score which ca be an issue but we have managed to obtain mortgages for Clients 3 years after early settlement.

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Ryan Radford
IVA Mortgage Expert
Zebra Money Centre

IVA Mortgage advice needed?

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claire824

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Post by claire824 » Tue Jan 08, 2019 3:53 pm
Thanks Ryan - that's my concern, that this continued default status will end up damaging our chances of getting back on the ladder.

Would you advise pursuing this with the creditor, or just adding a notice of correction ourselves, so any possible lenders in the future are aware of the facts before dismissing us outright?

Ryan

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Post by Ryan » Tue Jan 08, 2019 4:11 pm
The default date would need to be corrected at some point. The Mortgage Lenders won't really know what a Notice of Correction is saying they would just find the date of the default.

Regards
Ryan Radford
IVA Mortgage Expert
Zebra Money Centre

IVA Mortgage advice needed?

Contact me at http://www.ivamortgageexpert.co.uk or via the expert page

Foggy

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Post by Foggy » Tue Jan 08, 2019 4:23 pm
While the defaults are showing (for the 6 years) a lender probably wouldn't be interested in the contents of a Notice Of Correction. There have been instances where the CRA has posted such a notice of their own volition and it has come back to bite : The IVA and Defaults have a statutory shelf life and will, eventually, disappear, but the NoC does not and has, in the past, served as a reminder, on an otherwise new and sparkling credit file, of a murky past. If you enter an NoC, do remember to remove it when the IVA comes off.

Once you are removed from the Insolvency Register the IVA on your credit files should show as completed anyway.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

claire824

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Post by claire824 » Tue Jan 08, 2019 7:19 pm
Thanks all - so basically, we just need to sit tight and wait for the defaults to be wiped after six years? Our IVA is already marked as completed and we have been removed from the insolvency register and all.

Ryan - when you say the date of default will have to be updated at some point, do you just mean removed automatically after the six year time period has elapsed?

Or that the creditor could maybe choose to stop recording it as this, after a certain period of time, at their discretion?

It is the fact that it looks like a continuously defaulting account that makes it look worse in my opinion.

I just want it marked as settled so its clear this account is no longer being paid. Hence why I'm wondering if a notice of correction would be wise in order to correct any Misperceptions that we are just not paying this bill!

Ryan

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Post by Ryan » Wed Jan 09, 2019 8:30 am
The Creditor would need to amend the default date to the IVA start date so that all the default dates are the same.


Regards
Ryan Radford
IVA Mortgage Expert
Zebra Money Centre

IVA Mortgage advice needed?

Contact me at http://www.ivamortgageexpert.co.uk or via the expert page

Lisa Thomas

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Post by Lisa Thomas » Wed Jan 09, 2019 9:29 am
You might find this quick video I made about cleaning up your credit record useful:

https://youtu.be/PV4RzUY4BRM
Noddle, Clearscore and Totally Money are also free credit agencies to consider using:

https://www.noddle.co.uk/
https://www.clearscore.com/
https://www.totallymoney.com/
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk

claire824

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Post by claire824 » Wed Jan 09, 2019 12:50 pm
Thanks everyone. We will check with the creditor again to see if they will do this. At the minute, they're just telling us it's their prerogative to mark it as defaulted for each month, but this doesn't make sense to us.

Foggy

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Post by Foggy » Wed Jan 09, 2019 1:51 pm
claire824 wrote:
Thanks everyone. We will check with the creditor again to see if they will do this. At the minute, they're just telling us it's their prerogative to mark it as defaulted for each month, but this doesn't make sense to us.
OK ... every debt should be marked as in default --- the default date has to be at or around the start date te IVA. Each debt can only be defauted once. Each month thereafter the creditor is at liberty to tell the credit reference agencies that the account is still in default. It makes little difference to the grand scheme of things. Your creditworthiness is shot anyway for the full six years by the presence of the IVA on file.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

claire824

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Post by claire824 » Wed Jan 09, 2019 3:10 pm
Thanks, that helps clarify a bit. I understand about the issue being more with the IVA not clearing for six years anyway, but just want to do what we can do in case we can find a lender who can help us sooner!

I suppose there's no point in settling with this creditor at this stage is there? I know the IVA is already settled and they did receive a small dividend, but if it helps get this off our record and marked as settled moving forward, we might be prepared to look at it. The debt is for £533.

Any thoughts on trying this? Or is it pretty futile - would our account still show as defaulted for the last while, then settled from now, but therefore still stay on our record for six years anyway?

Foggy

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Post by Foggy » Wed Jan 09, 2019 4:06 pm
claire824 wrote:
Thanks, that helps clarify a bit. I understand about the issue being more with the IVA not clearing for six years anyway, but just want to do what we can do in case we can find a lender who can help us sooner!

I suppose there's no point in settling with this creditor at this stage is there? I know the IVA is already settled and they did receive a small dividend, but if it helps get this off our record and marked as settled moving forward, we might be prepared to look at it. The debt is for £533.

Any thoughts on trying this? Or is it pretty futile - would our account still show as defaulted for the last while, then settled from now, but therefore still stay on our record for six years anyway?
I am afraid that the default will still show for the 6 years, even if the creditors marked the account completed and stopped monthly reporting -- previous "history" will remain on file. Also, the elephant in the room will remain that IVA entry.
If you find a potential lender willing to put aside the IVA I imagine that they would also put aside the resultant defaults, being part and parcel of the same situation at the time.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

claire824

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Post by claire824 » Wed Jan 09, 2019 7:48 pm
Many thanks for everyone's responses - really appreciate the thoughts and input. It's a minefield!
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