SIVA

[james.c]

I keep noticing that some people in this forum keep making reference to SIVA coming out soon.

What is an SIVA?

no matter how bad money gets, theirs stll alot more important things in life

[Oliver]

I'm sure Andy won't mind me cutting and pasting his quick introduction to the SIVA.

Simple IVA, due April 2008

SIVA
A quick introduction to SIVA



1] A MAXIMUM UNDISPUTED DEBT LEVEL OF 75K WITH NO MINIMUM REQUIREMENT.
This is fine and should open the SIVA up to the majority of people with personal debts.The undisputed clause will probably mean that crown debts[Inland revenue etc] are excluded in most instances unless the figure can be verified within the time scale.

2] NO RE-ENTRY INTO A SIVA FOR SIX YEARS IF IT FAILS.
This will stop people from using the SIVA as an easy option to clear debts when they have no desire to contribute for the full term.For genuine people who fail during the SIVA the option for the full IVA still exists as a safeguard.

3]NO MINIMUM DIVIDEND
However I am sure that creditors will still have their set minimums[hurdle rates].However it allows people to propose a SIVA without offering an unrealistic dividend.

4]A DEBTORS PROPERTY TO BE DEALT WITH AT THE PROPOSAL STAGE.
This is an excellent condition and will take away the uncertainty that currently exists where debtors are required to remortgage in the fourth year of an IVA for an unknown amount of equity.
Under the SIVA the amount of equity release will be agreed at the proposal stage.

5]NO MODIFICATIONS BY CREDITORS
This may cause problems as creditors will only be able to vote yes or no on the proposal.They may like the proposal except for one detail and would be unable to change this.
In reality a draft proposal may have to go out to creditors to gauge their reaction and feedback,but this will mean more workload for the IP and goes against the whole premise for the SIVA.

6]A 50.1% MAJORITY VOTE
This is welcome and will stop creditors with more than 25% but less than 50% from having the determining vote.It is a fair change both for the creditor and debtor.

7]90 DAY CLAIM LIMIT FOR CREDITORS.
At present the creditor has upto the full term of a five year IVA to lodge a claim.This is a welcome change as the debtor will know his liability after 90 days,however the supervisor will have discretion to add a debt after this date.It will mean that the IP is reliant on the debtor disclosing their full debts and may mean more work for the IP in the proposal stage as they verify claims.

8]NO SET IP FEES
There are no set fees with the current IVA and is the area that is under discussion at the moment.It,s interesting to note that the IPs wanted set monthly charges and nominee fees depending on the size of the debt but the creditors want a percentage paid of money recovered[15%]to be paid to IPs.This area will continue to be debated until the insolvency service legislate the fees paid.

9]THERE WILL BE NO COURT INVOLVEMENT
This is fine and will have no impact on the debtor.

10]THERE WILL BE NO ANNUAL REPORT.
Again there will be very little impact on the debtor.


Best Regards
Oliver

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

[admin]

i believe that the siva has been put back to Oct 2008

[Oliver]

Thanks for that Admin.

Best Regards
Oliver

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

[mikebdomain]

While we are on the subject:

Really hope some one can correct me on this – I don’t believe that point 4] is actually included in the consultation on SIVA’s

I have read the ‘Insolvency Services Consultation document on the proposed changes’ and researched as much as I can with the information available, but can find no official reference to the point 4];

“4]A DEBTORS PROPERTY TO BE DEALT WITH AT THE PROPOSAL STAGE. “

Andy has given me pointers where it is mentioned, but not, it seems directly connected to the current consultation.

I am currently in talks with a number of lenders about mortgage products specifically designed for the new SIVA. Before I submit the final proposal for the new products, it would be handy to find a specific, definite, official reference to point 4] being part of the consultation. As the basis and strategy behind the proposed products is the requirement for the release of equity and the stability of mortgage payments during the SIVA.

Has anybody got any other pointers or documents I can reference?


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
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Check out my blog at:
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Please read our Initial Disclosure Document(IDD):
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[catullus]

Hello Mike

You'll find reference to this at paragraph 63 on the attached link

http://www.insolvency.gov.uk/insolvency ... ngIVAs.pdf

This is the DTI's consultative document on improving IVA's and was where the concept of front loading remortgages was first introduced.

Of couse, the consultation process has now taken place and we are still not really sure where we are going with SIVA's. We can't even agree on the original version!

[MelanieGiles]

Catullus - where are the Insolvency Service with regard to the new protocol, do you know? I must collar Andy Woodhead at tomorrow's event to see what the anticipated timescale is likely to be.

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

[Andrew Graveson]

Other considerations on this subject; in the current mortgage environment it's likely that:

1 - An individual in a well-conducted IVA/SIVA will be more likely to be able to borrow at a higher LTV (and therefore be able to make an equity contribution) than someone with current credit problems who is proposing to enter into an IVA/SIVA.

2 - An individual in a well-conducted IVA/SIVA will often be able to borrow at a lower interest rate than someone proposing to enter an IVA/SIVA. Reduced interest costs would increase dividends.

3 - An individual with adverse credit history who requires to self-certify their mortgage will likely not be able to borrow more than 75% of the value of their home.

4 - Quite often lender affordability criteria will make a remortgage prior to entering an arrangement impossible due to the weight of credit commitments.

If dealing with property at the proposal stage means getting a mortgage offer at the proposal stage it could depress returns for creditors and make the SIVA a non-option for many people, especially the self-employed.

Is it proposed that a mortgage offer is in place as part of a SIVA proposal?

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[catullus]

Hi melanie

No,I don't know where we are with the protocol. I've heard some waffle that, through the DRF, if the protocol doesn't include a satisfactory outcome on fees, then DRF members will refuse to adopt the protocol thereby putting pressure on the IS to legislate but frankly I don't lay much store by that,

About 6 weeks ago the BBA was quoted as stating that the i's were being dotted and the t's crossed which I think is double speak for "we're buying as much time as possible" and so I think that they've stalled on the question of fees which was always the central issue anyway.

[mikebdomain]

Thank you catullus that’s exactly what I was looking for - Sorry Andy if you already sent a link to this document, didn't see one.

Mind you - I will have to check the dates of the documents (not in the office till next week) if the consultation document come out after this document, then there is no mention of the consideration of equity at an early stage !!!

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[MelanieGiles]

Mike

Don't hold your breath on this point. My own view is that will a lot of give and take before these things bed down, and I have to say that creditor preference is still to raise the equity at the end of the arrangement, but based upon valuations taken at the beginning. I don't think that the view was ever to raise the money up-front, as this would produce a worse return for creditors given that the debtor would be paying higher mortgage payments, and therefore lower IVA payments.

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

[mikebdomain]

Thanks for the clarification Melanie - My understanding was; that if there was found to be sufficient equity found at the valuation stage to make a sizable payment into the SIVA (obviously not enough for a F&F) then a re-mortgage would be encouraged or be part / condition of the agreement.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[MelanieGiles]

Yes - but based upon year 1 valuations rather than year 5, and effected during the final year.

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