I have been in a DMP since 2009. Is an IVA my best option ?

[Becky.ht]

Hi
I've recently been contacted by a company called Harrington Brooks about an IVA and they believe it is my best option. I owe around 28,000 in debt. I have been in a debt management plan since being pregnant in 2009 as it was really stressing me out. However looking at the IVA fills me with dread especially when it mentions rx1 land registry and bankruptcy. As you can imagine I have 2 really young dependent children and can't lose my house. Could I contact all my creditors and come up a payment plan direct with them rather than go through with the IVA? Or is this my best option? My house is jointly owned by my partner and myself and he doesn't agree with me signing up for the IVA if it effects our home in anyway as the debts are solely in my name and also mine from before we bought the house I have to agree with him. The repayments for an IVA do not worry me as I'm a teacher. But how much do the creditors receive after Harrington Brooks take their cut. Also I've read up about the company and got mixed reviews- are they a good company or are they just out for the money.
I would really appreciate your professional advice.
Many thanks
Bec

[Shining]

Hi and a warm welcome to the forum. Firstly take a step back read a little bit more and contact at least a couple more companies to compare advice given. Do you have equity in your property as this could be affected by an IVA. We do have professionals who are members of the forum and will hopefully be along to give you some sound advice but do contact a couple more and take some case specific advice too.

[Becky.ht]

Hi Lesley,
Thanks for your post!

We currently have about £10,000 in equity in our property. But I'm not really sure how that effects the IVA and how much equity I have to have before they make me remortgage. As I wrote in my first post my partner would not be happy if we had to remortgage for my debts alone?
Very confused as to what is best especially with 2 small children to think about.
If I'm honest I also feel quite pressured by HB in agreeing to the IVA, I'm receiving a lot of phone calls off them and not always the same person. I have spoken in depth to.

[Shining]

Becky, if you feel pressured please don't go ahead with the IVA. Talk to a couple more companies and see if you feel better. you'll know when something is right and then can move forward. One of our professional members may be able to give you some advice a little later in respect of your mortgage.

[Michael Peoples]

You could opt for a self administered debt management plan which could shorten the time for repayment. This would depnd on how much surplus you have otherwise a 5 or 6 year IVA may be the best way forward.

[kev59]

Talk to a few company's before you go ahead with any thing. it free and you may find you get on more with one company them the other.
read others posts on here, you will soon see which ones always get good posts

[MelanieGiles]

A key factor to consider Becky, is how long it is going to take you to repay your debts in the current DMP. If this is within a realistic timescale, and you have confirmed that creditors are not charging ongoing interest and collection charges, then it may be best for you to stay put - or at least move to a DMP company who will not charge you fees so that all of your money paid over can be repatriated to creditors - to thus reduce the repayment timescale.

If, however, you want the benefit of a repayment plan which gives you a firm timescale, and the benefit of being able to write off a proportion of your debts, then an IVA is very worthy of consideration.

How did this company find out your personal details and contact you as a matter of interest? Is your current DMP being managed through themselves?

[Becky.ht]

Hi to everyone who has posted a comment on my question. I really appreciate your advice!
In regards to your question Melanie - when I was pregnant with my first son I was being hounded by creditors to the point where I was seriously stressed. At that time I thought a DMP would take the pressure off as I had no spare money. I joined Abacus in 2009 and recently I have been contacted by HB to say they are taking over.
Today i got in touch with step change to ask for advice.
I think in principal the IVA would be worth while as I think ill be paying off my debt until I'm 91! But what is really concerning me is the house, remortgaging etc. as I've explained earlier the payments have been fine and I haven't missed a payment for my DMP in the last 4 years! It's the remortgaging and what are the chances they could take my home off me? I know this may sound silly but I CANNOT lose my house with two small children!
Also those people that have completed their IVAs has it really worked has the debt been written off! Does it take a long time to get credit rating back?
Thanks again!

[llamedos]

An IVA wont take your home off you A standard condition is that In the 5th year, you are generally expected to attempt to release any available equity in the property to pay into the property. If this isn't possible (due to not being able to remortgage etc) then your IVA may be extended by another period (commonly 12 months).

I don't know how this works when the house is jointly owned and one partner is not in an IVA - in my case, we are both in an IVA but the house is only in his name so I have been advised that my IVA will run the 5 year term, whereas he is expected to try to release any equity in the property into his IVA.

I hope that makes sense?!

For me, the IVA was the best option - I had 2 young children too, and ended up having a breakdown and being diagnosed with depression. It is so nice to know it is now all under control and that there is an end in sight

Also, when your IVA is accepted, your debts should be marked as defaulted. This remains on your credit report for 6 years - so usually a year after your IVA finishes. After that, you can start to rebuild your credit score, but it will have a lasting impact.

[MelanieGiles]

Yes - I had heard that Abacus have recently sold their DMP cases to Harrington Brookes.

These days, IVAs have been specifically designed to protect the family home, and not leave it at risk at the end of the arrangement. I understand how worrying this can be, especially if your partner is not wholly supportive, but I am sure that if this is fully explained to you, your fears will diminish and you will see an IVA as a really credible alternative to a never ending DMP. And t the end of the day, the equity release provision will only affect your share of any equity and has nothing to do with your husband's share.

How much are you currently paying into your DMP as a matter of interest?

[David Rankin]

Becky, I am one of the Insolvency Practitioners at Harrington Brooks and as such I appreciate you may regard any advice I might give on here with some cynicism. I will therefore not make any attempt to influence your decision but would just like to explain, to yourself and to others posting advice or opinions, how we came to contact you.

Your DMP was originally taken out with Abacus and for operational reasons they recently sold their book of Debt Management Plans to Harrington Brooks.

It is our practice with our own Debt Management customers to routinely review all DMPs every six months to ensure that it represents either the best option for the client or remains the client's preferred option (these are not necessarily the same thing!). On acquisition of the Abacus debt management book we reviewed all plans for the same reason, as we are aware that not all Debt Management companies will do so.

I note that you have been on a DMP for 4 years. I have deliberately not looked at your file and do not know how much you are paying each month but you say that you owe around £28,000. You should therefore quite easily be able to calculate how long it will take you to repay your debts in full if you remain on the DMP, taking into account ongoing charges. Our customer services team can help you in this regard if you are unsure of the charges.

An IVA does provide a more defined solution and as others have said it will offer protection in respect of your home. I will say no more in that regard for reasons already stated and will leave it to others such as Melanie and Michael to offer further advice or guidance as to the benefits of an IVA.

I just wanted to reassure you as to the reasons for us contacting you. If an IVA is a more appropriate solution for you and you chose to enter into an IVA with us, and I would stress it is only an if at the moment as I do not know your full circumstances, then it may well be the case that as a company Harrington Brooks would actually receive fewer fees due to the relative timescales and charges of the different solutions. The fees are not our motivation in this process and I would never wish for you to feel pressured in any way into signing up to a solution you are not comfortable with.

[Becky.ht]

Hi
Thanks Melanie and David for your posts.
Melanie I am currently paying £100 a month towards to my DMP, so really not a lot but all I can realistically afford.
In regards to why HB contacted me has never been a concern for myself as I received letters informing me about the change.
The gentleman that is dealing with my case and who I regularly contact has been brilliant! However I still don't understand why I still receive up to 2-3 phone calls a day from other colleagues when someone is already dealing with me?
I've posted on here to see if the IVA does work and ask others who have been through this situation. As I've previously mentioned my main concern is my home and chances of me having to remortgage.
Thanks
Bec

[Michael Peoples]

You will struggle to get a remortgage unless your circumstances change over the course of the IVA. If you cannot remortgage you would be expected to extend the IVA by a year but better than being 91! Good luck with your IVA.

[size5]

If £100 per month is your best offer then there is no reason why creditors should not give it serious consideration. As far as I am aware, HB, through their insolvency arm, are able to propose IVA's at that level of contribution, although I stand to be corrected on that, as some firms cannot look at the lower end of the contribution scale.

As for Stepchange then by all means talk to them, but it is my experience again that their default position will be to look at another DMP, albeit one that carries no fee payable by the debtor.

Regards.