is this normal?

[ame]

I am in an IVA and payments are very high, because we were told at the onset that debts to our families could not be included we have been working overtime to get extra money to pay these seperately, we have now been told that 50% of that money needs to go to the creditors, looking at the notes you say that up to 75% of our debt could be written of, this is untrue by the end f our payment term we will have paid at least 75% if not more, the difference is that the company organising the IVA take a large percentage, the help we needed is turning into a stick to beat us with is this normal?

[MelanieGiles]

Hi ame and welcome to the forum

First of all your family's debts should have been included in the IVA - so you may have an issue with the person who advised you not to included them - but very importantly they should not be being paid on an ongoing basis. That is effectively giving them preferential treatment.

There is no guarantee of getting away with only paying 25% of your debts - IVAs are individually tailored for you to repay as much as you can, based upon your own circumstances for a realistic period. If you manage to pay more than 75% of the debt you shoudl be immensly proud of yourselves - but I would have a chat with the IP about the omission of certain creditors.

[Adam Davies]

Hi
Some people have 80% plus of their debt written off and others nothing,it all depends on your personal circumstances.
It is standard that 50% of any extra income is paid into your IVA.You are free to use the remaining 50% to repay yur family members.
Regards

[luluj]

I know that by the time my 60th month comes around in 2012, I will have paid back to my creditors at least 85% of the money I borrowed - yes I borrowed it so I have to and want to pay it back. Likelihood will be that they may have even received 100% plus the statutory interest of 8% by then - at least my head will be held high and I can honestly say I have repaid my debts.

Don't enter into an IVA unless you want to pay your creditors back - an IVA is for those that want to - for those that don't then consider bankruptcy!

[ame]

I appreciate that I have borrowed the money and wouldn't have wanted to avoid repayment, that is why I went into the IVA, what suprised me was the lack of information given by the advisors I spoke to concerning the repayment amount and what would happen during the term of the IVA, I had differing information, which I have since found is incorrect, but because of my simplicity in not getting original information in writing I cannot prove what I was told, I am also feeling pressured by the administration company to close my IVA early by selling my house to raise a lump sum or as I cannot get a loan or remortgage, to borrow the money from my family, I am told they feel this would be the best course of action for me. How they think I will find somewhere else to live, with a poor credit rating has not been explained.

[ianmillington]

I can't see why they would be pressurising you into raising a lump sum and settling early. That's a very odd thing to do. Have they given you any reason why?

Ian

[ame]

They just say it would be better for me, possibly because my circumstances are due to change, my job is under threat and my partner is changing job,with a lesser wage?

[MelanieGiles]

I wonder if they are a firm who has a mortgage arm perhaps? And if your circumstances are going to change that much, how do they think you are going to be able to fund a higher mortgage, which will run for a lot longer than the IVA will take to conclude.

[ame]

As we are unable to get the lump sum requested and I will not borrow more fom my family, its actually immaterial but, my point is that there are companies out there that are more than happy to take your money but do very little to help/explain the process as it goes along, I was told by the citizens advice bureau that almost a third of IVA's fail in the fourth year, when the request to release equity from the home to supplement the IVA puts people into more debt than they were originally. For every good company out there trying to help, there are a multitude trying to help themselves, and changing to another administrator is punative in cost, if you are even allowed to do so. I am suprised that creditors are happy to accept the pittance that is paid after the administrators take their 42pence in the pound plus expenses of course.

[ianmillington]

Hi again ame

A properly crafted remortgage clause must always take into account the debtors ability to fund it. There should always be a "get out of jail" element too, which in certain circumstances forgives the remortgage in the event that no-one will lend. Ok creditors modifications can sometimes muck it up of course, but over the last few months my experience is that things have improved in that respect.

From your post it's not clear precisely what your obligations are i.e Do you have to raise a specific percentage, what happens if your circumstances deteriorate etc. Without being in any way patronising, these proposals can be daunting and difficult for a lay person to understand, particularly when accompanied by 28 pages of standard terms and then modified by the creditors. If you are in any way uncertain there are lots of other IPs who will be only to happy to look at your papers and tell you where you stand. It is clear that (rightly or wrongly) your faith in your IP is somewhat shaken and you don't altogether trust what you are being told so a 2nd opinion will be worthwhile.

Hope this ghelps

Ian

[ame]

Already had another IP look at the paperwork, through the CAB and they said that the house was not involved with the IVA which confused me even more, but according to them it had been left out of the agreement and I could not be forced or requested to remortgage. I am therefore completely unsure which one is giving me the correct facts. The second company Payplan had nothing to gain whereas my Ip has.
The amount requested for settlement was around 30K as we have already paid 10K back in the 15 months we have been in the IVA.

[MelanieGiles]

It is now time to take this to a lawyer for specific advice and potential action against your IP if they are misadvising you.

[ianmillington]

From what you say the property has been simply omitted from the proposal, rather than diclosed and excluded? I assume you told them about it. If that's right, then that beggars belief. Non-disclosure is not exclusion, it's a material omission that could lead to a challenge to the validity of the IVA and the Supervisor would appear to have presided over a right mess.

Melanie is absolutely right, you need to talk to an insolvency lawyer.

Ian

[ame]

I will look into that, when we had the first consultation on the IVA, at our house, we asked if we could keep the house out and were told it was unlikely, but they would try, after we got the IVA settled and the payments increased by an extra £120 per month, we were a little worried and went to the CAB, they gave us the phone number and address of Payplan an IP with a mortgage wing, we originally asked if we could change IP and if so how, we were askedto send the agreements to them so they could check the wording, they contacted us and said that it would not be viable to change on a purely financial basis, they also told us that the property had not been added and that we were not liable to release equity on the house, they were quite suprised at this ommission as indeed was I however as they had nothing to gain from this information I had no reason to doubt their word.

[MelanieGiles]

The CAB referring people to Payplan? That link appears again!