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lizzie4
Starting Member
United Kingdom
4 Posts |
 Posted - 22 August 2009 : 21:04:06
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We have been in an iva for just short of 3 years paying 850 a month on a total debt of around £140,000. We have a 20k equity agreement to pay into the iva before the end of the iva, didnt say in the 4th year just as soon as possible. That said the house is now in negative equity or at the very least only worth what the mortgage is on it. We are now considering bankruptcy due to 2 redundancies and although alternative work has been found it is at a much lower salary.
If we were to go bankrupt the mortgage is £1280 per month & was taken out on a fixed term rate over 10 years (which was a good deal at the time - 4 years ago)there are two of us and a student nurse daughter of 18yrs. Do you think the OR would say that this was excessive. The mortgage was taken over a shorter period of 14 years due to hubbys age.
Really not sure what to do at the moment and just need some guidance as to whether you think the or will say housing costs are excessive, a reasonable rental property in our area would be around £800 a month here and then of course would need deposit and also somewhere that would accept the family pets of 2 labradors! |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 23 August 2009 : 07:27:20
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Hi,
If you decided to go BR then you should be fine to pay the mortgage as the deal was taken out several years ago before you had your current financial difficulties.
I would recommend you speak to your IP as you have put a lot of hard work into getting the IVA and sticking with it for so long so it would be a shame to have to give it up when you are more than half way through it. |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 23 August 2009 : 10:27:12
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I would assume that from what you describe that you are on a repayment mortgage which obviously reduces the balance outstanding each year.
it is quite possible that the OR would ask you to switch to interest only to allow an income payment agreement to be made.
Because of this I would suggest that your first step is to speak to the IP - not one of their telephone team - and clearly lay out your new income & expenditure.
It may be possible for the IP to propose a modification to the IVA to reduce payments and eliminate the 20k, along with a swith to interest only.
this may give you the space you need rather than switching to Br
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 23 August 2009 : 11:15:55
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You can email your IP directly via this link:
http://www.insolvency-service.co.uk/newipsearch.htm
It seems a shame for you to have got so far through your IVA and for it to fail now.
As Paul says - speak to your IP and you may be able to renegotiate your payments rather than go bankrupt.
The glimmer gets brighter all the time
Jan
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lizzie4
Starting Member
United Kingdom
4 Posts |
Posted - 23 August 2009 : 14:00:40
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Thanks for your replies, the mortgage was always split 50/50 with half already on interest only anyway. We have just reduced the other half to interest only but can only do that for 12 months without attracting any penalties, you have worried me now as I didnt advise the IP just thought it would help over this patch of no income from my husband; are you syaing we should have asked first it is only this monh this has happened? The advice I got when ringing my IP was that if we could keep below arrears of 3 months payments we would be ok and to use this time to see if there was any movement on the job front we have been able to keep below the 3 months arrears (just) by paying less on the mortgage which hadnt occured to me would not be allowed, it was just a way of making up some of the shortfall in the current IVA and to worry about the equity later as it is the fall in house prices that have affected the equity badly we only ever had about £25k and would have only perhaps paid off another 10k on completion of the iva with hindsight perhaps we should have done a revised i & e when the IP first knew of the shortfall
If the OR in bankruptcy was to say we had to switch fully to interest only this would cause a huge problem as there is a redemption clause of about 7 or 8 thousand and with no equity and age taken into account we wouldnt get one elsewhere.
There seems to be so much against us completing the iva and have now started to wonder if there is another option before struggling even further and still ending up bankrupt. A big creditor was HSBC and the iva HAS to achive 40p in the pound. |
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RHB
Senior Member
1159 Posts |
Posted - 23 August 2009 : 14:39:35
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You are more than half way through, I think if you are apying back 40p in the pound then your IP should be able to sort something out for you. If you go bankrupt your credit rating will be sour for longer & if there is borderline equity in the property you could possibly lose that.
I think best thing is to see what your IP suggests, it does seem a waste to go bankrupt now though. |
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Daniel Griffiths
Junior Member
United Kingdom
268 Posts |
Posted - 23 August 2009 : 14:45:43
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| Your first call for help is really your IP to se if a variation can be agreed with the creditors you have come along way its a shame to fall now however your circumstances dominate the way forward. I do not believe from what you have said in that the OR will see your mortgage payments as excessive normally 40% of income is seen as the norm for mortgage payments but this is not written in stone it can be 50% or above. If you chose the BR path its not the OR policv to cause further financial problems with your mortgage. Your mortgage is existing and you have not increased the level of capital payment recently which is what the OR normally looks for, some clients think they can increase mortgage/ pension payments to offset IPO orders this of course would be wrong. |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 23 August 2009 : 14:50:39
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Give your IP a ring tomorrow and see if you can sort something out.
Let us know how you get on.
The glimmer gets brighter all the time
Jan
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 23 August 2009 : 18:56:45
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i notice that you are with a large IVA company rather than a "bespoke one" and it is likely that you may well not have spoken to the IP at all.
Sometimes the large IVA companies run cases rather than know their clients.
Unfortunately lots of people chose IVA providers based on contributions or adverts rather than on speaking to the IP directly.
the choice of an IVA provider is probably then most important one you can make as you have to have a relationship with them for 5 - 6 years and need to be able to approach them in times of change.
Incidentally for other readers I would recommend Jones Giles and speaking directly to Melanie. They actually know their clients by first name terms and have a stunning reputation.
Lizzie4 if you don't get what you need then speak to one of the experts offline as they may be able to represent you with the IP.
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 23 August 2009 : 19:00:50
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I totally agree with Paul.
Melanie has an excellent reputation, and is a lovely lady.
Lizzie - try and speak directly to your IP in the first instance and see if they can help.
The glimmer gets brighter all the time
Jan
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lizzie4
Starting Member
United Kingdom
4 Posts |
Posted - 23 August 2009 : 19:35:43
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We are with McCambridge Duffy who have been fine up to now, just that I'm getting a bit panicky about the 3 month arrears thing as it could mean automatic fail. The IVA also says that no variations will be allowed, no time limit just none allowed and also states a minimum of 40p which if we cant raise equity and also ask for lower payments we are not going to get this!
I think at the time we were so desperate we would have agreed to anything and to be fair I dont think anyone envisaged the state of the economy and the rising job losses.
I will ring them but it will probably now be Wednesday as I envisage a long call and I'll need a clear head and privacy. |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 23 August 2009 : 19:40:51
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Hi,
Have you posted on the sister site to this, www.iva.co.uk they have a manager from McCambridge Duffy who posts on there regularly. If you put your question on there, you may find you can sort something out via that site.
The glimmer gets brighter all the time
Jan
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 23 August 2009 : 19:46:47
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Are you now with Debt Free Direct or have they moved you to Macambridge Duffy?
My experience of DFD is that they are particularly slow in failing IVA's and we are now helping a lady avoid Br after no contributions to an IVA for over a year!.
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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lizzie4
Starting Member
United Kingdom
4 Posts |
Posted - 23 August 2009 : 20:06:43
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Paul - always been with McC/Duffy never DFD. If my report says No variations is it still possible to do one?
Kallis - I have seen the posts on the iva site, I think really my initial thoughts were to find a general consensus of opinion/thoughts regarding the housing costs etc. in bankruptcy before I ring the IP.
They have always been ok when ringing them before I just wanted to find out a few thoughts before ringing. I know no one else other than my IP can give me specific answers it's just when things are uncertain you start thinking the worst and start weighing up options.
Thanks for your responses up to now though I do feel a bit more positive, and who knows with 3 good job applications in for my husband we might just still get there! |
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We have been in an iva for just short of 3 years
