We are at our wits end

[chris.b]

We have had our IVA since October 06 paying 568.00 per month. We were not aware of the 4yr rule untill we had a flyer from a company called Tyler Morgan. We are at our wits end as we naively thought we would pay 60 monthly payments asessed on our income and that would be the end of it. How can we get a mortage at the age of 60 which we will be by then, we should really have gone bankrupt shouldn't we?. Also we were approached by a company called The Hampton Tust who said they could wipe out our IVA by releaseing the little bit of equity we have with a settlment offer to our IP. The agent came and took our Mortgage statement, bank statement, IVA documents, P60's, wage slips, copies of driving licencs.passports, utility bills and then promptly dissapeared off the face of the Planet. We went to the police who advised us that a crime had not been comitted unless it was used fraudently. We are at our wits end. Can you please advise us what to do. Our fees will be approx 11,000, we were also told by Hampton that with the 4 yr rule we would have to pay the whole amount owing, (77,000) + IP fees, + interest.

[BECKY]

Have you checked through ur paperwork to make sure u have to do an equity release in the 4th yr? U only have to release so much of ur equity I think , but Im sure one of the experts will be along soon. If u want to release equity early to end ur iva it is best speaking to ur own ip who has knowledge of ur case and who can give u a figure to aim for. U can do this yourself then , theres no need to pay a company to do it for u.

[MelanieGiles]

Hi Chris and welcome to the forum

You must firstly check to see whether the equity release provision applies to you. Firms like this mailshot everyone on the Insolvency Register in a hope that one or two people will be interested in their services. I find it incredible that you say you were not aware of the need to raise equity - perhaps this is because your IVA proposal does not require you to?

Speak to your IP about this as, to be honest, they are the only professionals you need to deal with.

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

[chris.b]

[:I]
Many many thanks for the information and advise. I have written to our IP for clarification, these are worrying times for us as my husband has had to take a paycut of 75 p per hour to keep his job, its probably a msall amount to a lot of people but to us its disaster as we have just had our 1st annusl review and our payments have gone up by another 64.00......I'll keep you all posted.
How would we go about obtaining a settlement figure and releasing the bit of equity we have??
Love Chrissie x

[MelanieGiles]

Ask your IP to provide you with a settlement figure based upon the dividend your originally offered, but make sure you check the equity release clause out first as this may effect the figure they provide you with. How much equity do you feel you have in your property currently?

[ianmillington]

I think firstly you need to ascertain what your obligations actually are. I note that your husband has had a pay cut. I think the IP has to revisit the recent I&E review to and consider whether he can simply reduce your payments back to their original level for a start.

Now the remortgage. Some of the brokers who obtain details from the Insolvency Register can cause considerable damage although it is fair to say there are some decent ones too. Firstly check whether you do actually do need to remortgage. The reference to a so-called "4 year rule" could simply be a sweeping statement designed to attract your attention. The people who issued it actually have no knowledge of the terms of your proposal. If you are going to investigate this further, you need to bear in mind that if your mortgage is with a high street lender you may be better off staying put. The new lender may well be at a significantly higher rate than you are currently paying. If you do remortgage the chances are that the broker will receive significant commission simply for setting up the deal which will have to be paid for from somewhere.

It may be a sensible route to take if you can see your IVA coming off the rails and a remortgage will solve it. However it would be a mistake to view it as an easy option because it isn't - you are after all replacing a 5 year commitment with potentially a 25 year one.

As Melanie has recommended, discuss your options with your Supervisor. He (or she) is far better placed to help you than any of these concerns.

Ian

[chris.b]

[:I]Thank you for the information.

We currently have a mortgage payment of 1395.00 per month and 9 yrs left to go off a 12 yr mortgage because of our ages. Hubby 56, me 53. Thhe house is worth approx 145,000 and we owe 110,000. I understand that the equity can only be 85%. Our settlement was 27,000 with fees of 11,000 to the IP so 19,000 to creditors.We currently have a 5yr fixed rate mortgage of 6% which runs out in 3 yrs time. We know we will be penalised and no lender will give us a remortgage of 25yrs because of our ages. We wondered if our current mortgage lender would do a secured loan as we have never ever defaulted on our mortgage or IVA. We have gone without buying groceries some weeks and lived "out the cupboards" as it were to keep our heads above water. We have sold personal items at car boots/ebay to keep going but we are only 16 months in to what we think is a 60 month agreement. How do others survive? love Chrissie x

[MelanieGiles]

Hi there Chrissie

How much do you think that you could afford to pay into the IVA, if your IP would be prepared to put forward variation proposals for you? And if your mortgage is based upon a repayment basis, have you thought about amending that to interest only until the IVA is concluded?

[chris.b]

[:I]Thank you Melanie, we are happy to keep our payments at 568.00 as we feel we have a responsibility to our lenders, they lent us the money and we have to pay it back. We feel bad enough about the loss of interest etc. We are determined that our IVA will not fail. We have kept this as a terible secret from our children and our families as we feel so ashamed of the situation. We have no endowments to settle an interest only mortgage, we have an army pension + hubbys wages to pay the IVA and live off+my salary (which covers all the mortgage). We were hoping when its all over that we may be able to put the house into some sort of equity release plan and get a bit of our lives back after we have settled everything else, but we have been advised by these so called companies that we will have to pay the full 77,000 + interest + IP fees so it doesnt leave us with much, but then do we deserve to have any left?
love Chrissie x

[MelanieGiles]

Chrissy

You still need to establish whether you have an equity release clause. It is possible that you do not, and just because you have had a silly letter from a mailshotting company does not mean that they have no prior knowledge of your situation. They are guessing and preying on your vulnarability, in the hope that you may be someone who needs to raise money as part of the IVA.

Please will you promise me to dig out the IVA proposals and Chairman's reports tomorrow and post on the forum anything which relates to your property. Either I or another of the forum experts will then be able to advise you further.

And to answer your last question - you absolutely do deserve to have somethind left - you have proposed a settlement with your creditors which gives a far better return than would be available to under bankruptcy proceedings - and are paying contributions for two years longer than you would be required to in bankruptcy. You should be feeling rather proud of yourself at the moment, and looking forward to a debt-free retirement (eventually!!!)

[chris.b]

[:I]Thank you Melainie, we have written to our IP at Clearstart for clarification of our equity /4yr rule. We do not have the original documents as they were stolen by the agent from Hampton Trust, along with all our other ID.
Thank God for all of you at the Forum, I'll sleep tonight x

[Andrew Graveson]

Hello Chrissie,

Worth speaking to one of the mortgage brokers that posts on this site (as well as myself you'll find Tony Parsons "Welshboy" and Mike Burridge "Mikebdomain") if you discover that there is a 4th year equity release clause.

There are lenders who will lend beyond standard retirement ages provided that you can demonstrate that the mortgage repayment will be affordable for you both.

I'm sad to hear of the advice you've received from the mortgage company you approached and the fact that their agent has treated valuable documentation in this way. It's wrong.

[chris.b]

[:(]

Just to let you all know that have been kind enough to give us advice. The bad news is we are in the 5 yr rule. We have to remortgage in our 5th year and repay 100 % of the outstanding original debt. I spoke to Michael Reeves our IP at Clearstart today who was very helpful and sympathetic but the upshot is that we will either have to sell/remortgage. We will be nearly 60 yrs old then, and will have to sell up most probably, as the house will be worth approx 160,000 by then, with approx 70,000 outstanding on the mortgage, the IVA will expect 50,000...so on reflection it's like paying very expensive rent for something thats's never going to be ours anyway. We have learnt the hard way I'm afraid. The adverts on the TV are VERY misleading as you dont get your debt written off at all, and with hindsight we should have gone bankrupt in view of our forthcoming situation. We are tempted to default on our IVA anyway and be declared bankrupt. Thanks to everyone for your advice. Love Chrissie x

[MelanieGiles]

How on earth has this happened without your knowledge Chrissie. Do you remember agreeing to these terms and did you sign anything at the time? I find it really hard to believe that you were not aware of these provisions, and I know of an IP who was recently fined heavily for not having evidence on file of her client's agreement to such an important decision. Please check the documents you have to hand and ask the IP for evidence if you feel that you were not aware of this issue.

[chris.b]

Dear Melanie, we are a bit shell shocked today. We are not stupid people by any means, I am a clinical nurse specialist and my husband was in the army for 25 yrs running the regimental transport system. I dealt with the IVA and to my knowledge I cannot remember anything about the 5yr rule...which is why I am stunned. I think at the time you are so stressed perhaps you don't take it all on board. The way I look at it is we borrowed the money, circumstances led us into a downward spiral, we owe the money, + interest and it has to be paid. I am just so sad for my husband as he isnt aware yet of the bad news as he works away and wont be home till Saturday night. Wish me luck x