www.iva.co.uk

Dear all,

I had heard from another chat forum that this creditor at creditors meeting is asking debtors to go DMP instead off IVA and even calling debtors before the meeting telling them(wrongly) that an IVA adds 6 more years on top of the 6 years of adverse info onto the credit reference files.

This other chat forum had dozens off cases like this??

Can any one confirm this in their experience

One of my creditors is MBNA.

They voted yes to my IVA without problem in May. I dont know of them being problematic in general, only that they expect to see a well drafted & fair proposal. I think that the important thing is when dealing with your debts you shop around and do a bit of research before making any decisions. Probably avoid companies that advertise in 'too goo to be true' fashion, as it seems creditors are particulary annoyed by such companies at this point in time.

As for calls to debtors, they dont tend to come from the decision makers just the debt collection dept/agency staff. Who's main job is to try and get a payment from you, not decide if a IVA is the most relevant way of dealing with your debt. So what such people tell you should probably be taken with a pinch of salt. Or at least, check back on a forum like this one for further advice...

Hi
I agree with Ivoriva that these calls must come from call centre staff who often use scare tactics and incorrect info.
We,ve had cases of staff saying that their company does not recognise IVAs !!!
I wouldn,t lose too much sleep about it.The quality of your proposal and your IP are paramount in the present climate.
Regards


Andy Davie
IVA.co.uk Spokesperson

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

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

MBNA are a commercial creditor, who rightly always look for the best solution to recover their debts. If they do not feel that this is served by an IVA, they will say so - in which case you should ensure that you have fully considered all options available to you before plumping for an IVA.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

If a default is registered on your credit file it lasts for 6 years. I had this conversation with MBNA, what they are saying is until your debt is written off, ie end of IVA, they can record a default on your credit file after each months unsatisfied payment, so the last could be in year 5(or 6 if lasts that long) of your IVA, therefore remaining for another 6 years, total affected credit file 11 or 12 years.

Hi
I can't see why when someone is already in an IVA why registering default notices on a credit file would help or hinder.
In the case of a mortgage a default notice is ignored (in all adverse mortgages)
If you have an IVA it stipulates you can't hold a credit card (debit card yes)
So it is of no benefit to register a default notice to anyone with an IVA.

Am I wrong ?

Regards
Adrian

You probably missed the bit about +6 years from the date of last entry Adrian..... entries on a credit file remain for 6 years since last update. As the rep from MBNA pointed out if they continue to report a default for the full 60 months it will remain on the file for a further period of 72 months.

This issue has been raised a number of times by the members of SCOR (Steering Committee on Reciprocity) but to date nobody has provided a working solution so at the moment it is at the creditors discretion as to when they give a final status at the beginning of the IVA or the end.

(SCOR has representitives from all the credit providers who report credit performance data to the credit reference agencies (CRA's) )

It is important to note that credit providers must report the true status of your account so for example if the sell the debt they must give a closing status and stop reporting, if they write off the debt they must give a closing status and stop reporting.

This is where the sale of the debt can help - only the top 2 or 3 DCA's report to the Credit Reference Agencies (The main one being CABOT)

The issue of defaults does have a bearing on mortgage products as the individual looks to better the rate - certain light adverse products (with better rates) do take defaults into account.

Hi

MBNA used all those scare tactics on me via a constant stream of letters. I phoned up my IP and they told me not to worry. In the end they didn't even bother to vote at my meeting and the debt was for £7,500k.

Im sure I read if creditors do report defaults on you whilst in a IVA, once the IVA is completed you are allowed to attach a note or something on your credit reference file to state all defaults were satisified within the IVA... which may help in regards to future borrowing.

You can add a notice of correction at any time.

It is worth noting automated credit systems / scorecards do not read a 'notice of correction'

Hi
I,ve often wondered if these notices of correction actually work and as most credit decisions are made via automated means,as Storm suggests, then the answer is probably no.
Regards


Andy Davie
IVA.co.uk Spokesperson

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

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

Hi Andy/Storm,

Thanks for that info. Maybe SCOR should suggest any file with a notice of correction on it should be flagged so that manual intervention has to take place before a lending decision is made. That would seem a whole lot fairer to me.

Andy - as someone who has come out at the other end of the IVA tunnel, did you check your CRF & if so, had any defaults been registered during the term of your IVA?

Hi
No,I think that I have been lucky,also I have moved house and have been at the same address for three years.
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

Hi Andy, thanks for that info. Its sort of re-assuring to know. Hopefully in most cases the creditors wont bother to write the defaults then, at least not once the IVA is well and truely underway.