www.iva.co.uk

hi, we are in the process of setting up an iva... i have a managed loan with hsbc and have been told that for them to agree they will require 40p/£1 is this correct as this will mean we will be paying £410 a month back and will still make life very hard for us....

Hi Dix3 ... just wanted to extend a warm welcome to the Forum ... one of the experts will be around to help you shortly. [:)]

Debbie

Hi there dix

I am afraid that HSBC do have a hurdle rate of 40p in the £, and if HSBC represent more then 25% of your overall debt then you will need to try and achieve this if an IVA is to be workable.

In my experience the bank will look at lower dividends on a case by case basis, and if you were to extend the IVA for a further sixth year you could also avail of lower payments to achieve the dividend required.

What advice has your own IP given you in this regard?

We have just been told that for hsbc to agree we have to get it to 40p/£1... as my managed loan is for £10.000(our debts in all are nearly £50k) when i contacted hsbc to advs about the situation they didnt want to listen and said i had to carry on paying and thats it, when payment for the month of my managed loan was not made they contacted me and when i explained the situation and that i had called before reg this they where quiet pleasant about it and advs that they wouldnt call again reg the situation and would await the letter from ip... they also refunded the money back which they took the day before through standing order (which they refused to canx) for the managed loan.

Hi
HSBC have been very reasonable in refunding a payment when your IVA is not yet up and running.
Don't be forced into accepting an unmanagable amount to pay each month.I was under the impression that the 40p hurdle rate had been removed,surely this is contary to the recently agreed protocol ?
Regards

Andy - the 40p hurdle rate remains and according to TiX there is little sign of it being removed in the near future, although they will look at lowe dividend cases on an invidual basis - so I am still putting them forward. In this poster's case, he only has 20% of his aggregate debt with HSBC so this is unlikely to be of much concern so long as the other creditors all vote.

Does the 40P/£ that HSBC require extend to First Direct too given that they are the same group?

Yes they also have the 40p hurdle rate.

Hi
I struggle to see the commercial sense in having a 40p hurdle rate in todays climate,bankruptcy for many people is financially less painful nowadays and I would guess that most bankruptcies return less than 10p in the £1 to creditors.
HSBC will have to change their stance if the housing and mortgage market continues to harden
Regards

Most of us share your views Andy - but unfortunately no-one at HSBC!

I agree, the HSBC are going to have to mellow! I'm now worried that I now not only have Northern Rock and MBNA to deal with but the HSBC hurdle too!! Oh well I am confident I am in good hands with Melanie and will continue to be positive!