www.iva.co.uk

I started an IVA in Nov 2009. Last year my husband lost his job as a manager so we got behind in our secured loan (Nemo Finance) and IVA payments. We made arrangements to reduce our IVA payment by 15% and had an agreement to pay half of the Nemo payment for 6 months. We then carried on as normal for a year.

We are both self employed travel agents and work from home, last month our phone line and broadband went down for almost a month, therefore we didn't earn much, barely enough to feed us for the month. We paid the IVA and Nemo a couple of weeks late.

Nemo have now written to say they are staring legal proceedings to reposses the house.

Is it worth me paying any of them anymore now? Should I just start bankcruptcy proceedings? Or do I wait for them to start bankruptcy proceedings, I really don't know how it works. I have just had enough of all the hassle now and can't carry on worrying from month to month.

We can now afford to carry on our payments as normal now but Nemo want us to pay the arrears of £2.5k from last year or they repossess - obviously we don't have this money to give them.

Any advice would be welcome.

Hi tracyh. I just wanted to welcome you to the forum, and wish you the best in sorting this out, but unfortunately, I don't anything about arrears on secured loans. Someone knowledgeable is sure to be along here to help you. x

Hi Tracyh,

I am sorry to hear of your worries.

I am not an expert, but wonder if maybe these arrears could go into your iva ?

As I said, I am not an expert, but would would this help at all if you could ?

I don't think you can put any secured debt into an IVA but I think you should offer nemo a repayment plan in writing asap or ask if they would add to the balance outstanding.

If they then go to court to try to re-possess and you can show you have attempted to resolve the problem in a fair manner the repossession order may be thrown out by the judge.

Hi tracyh! You may be able to negotiate a payment plan for the Nemo arrears if that's what you want. On the other hand, if you want to go BR, you will need to stop paying everything at some point to save the fees. It is unlikely that any of your creditors will make you bankrupt as it costs them money to do it. x

Hi, thanks for all your replies.

Even if I was to sell the house, after paying off the mortgage Nemo would only get a maximum of 50% of what we owe them. So if they went for repossession I would assume they would get even less than that.

I can't understand why they are doing this as in a few years when the IVA is fininshed they will get back the full amount.

I doubt that they would be successful in getting an order for sale when the arrears are so small. Especially if you can now make the contractual repayments. I would get the payments going again and perhaps make a small overpayment towards the arrears. You could then call their bluff on the legal action and see if they are serious. Did you take out PPI on the loan as a matter of interest?

Thanks for your reply Melanie, if I just paid and extra £10 per month would that be seen as trying to pay off the arrears. We didn't take PPI out.

If that is all you can afford then it will reduce the arrears, and if this does ever get to Court at least the judge will see that you are making an effort. Do try and pay as much as you can afford to get them cleared asap

If it was to go to court what would happen. The value of the house has dropped so much that the mortgage would be covered but only half of what we owe Nemo, plus we have another 15 years to pay them both left. Would Nemo do that when they are going to lose out, in a couple of years the IVA will be finished and we should be financially ok.

I cannot say whether they will take this to Court or not, but if they do, and you demonstrate that you are paying what you can afford, the judge may well be supportive of you.

Mel is right, as usual. In my experience, creditors do not view a first court appearance on mortgage/secure loan arrears as an opportunity to repossess, more as an opportunity to consolidate and strengthen their position should you fall into difficulties again. The court process, should the need arise, is also usually very little to worry about. Your lenders rep on the day will usually seek you out and try to come to a deal with you. They will be pushing for a good deal for themselves of course, so the trick is to do the same back. Do not promise what you cannot afford to their rep, as whatever deal you come to will just be rubber stamped by the court. That is a recipe for disaster, and makes it much more likely that you will break the court order, at which point the lender can enforce the warrant very quickly. You now have an eviction notice. These can generally be resolved without the loss of the property as well, but are obviously far more serious than what you face now. Far better, if you can't reach an amicable arrangement, to let the judge decide.

Of course, you should then inform your IP of the outcome so that they are aware, and can help further if necessary.

That's very reasurring Size5, thank you.

Great advice from Mel and Mike...hope you're feeling better about the situation and can see a way out of it now x