Lump Sum Payment

[Skippy]

As you know I am struggling to make my IVA payments and am seriously considering bankruptcy. My mum did an equity release scheme on her house after my dad died, and when I first told her about an IVA she offered to release more money from the house to pay my debts. As it wouldn't have been enough to clear them I said no, as I didn't know about lump sum IVAs.

My question is, although I am only 4 months into the IVA, would it be worth talking to my mum and asking if her offer still stands? If so, how much would I need to offer on debts of £65k for the creditors to consider it? I am currently paying £459 per month which equates to 27p in the pound. I have a modification that I cannot make any variations in the first 24 months, but if they would accept a lump sum they will get more than if I go bankrupt.

If I had known about lump sum IVAs I would have looked into this at the beginning! If only I had known about the forum!

Thanks for your help!

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/

[scaredkez]

skippy is this the way you really won't to go, you will be paying the payments to your mum for however long the period is she takes the equity release out on the house, have you thought how much she can offer and what the repayment terms on that will be, i looked into everything believe me, what i don't want you to do is end up deeper and regretting it after wards, may be the payments will be a lot cheaper per month but it will be longer term, i really do hope everything works out for you.
good luck
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[Skippy]

Hi Kerri, my mum doesn't actually have to repay the money, it comes out of her estate if something happens to her. I'm not 100% sure of how it works, but she asks for so much and it is paid as a lump sum into her account, and when something happens to her and the house is sold the company takes half the value (at the moment, although that will change if she takes any more) and the rest goes to me. It basically means I would have my inheritance now.

This isn't really the route I want to go down, but as soon as I tell her I am going BR I know she will make the offer again anyway.

To be honest I don't know what I'm doing at the moment, as I'm sure you can understand! Yesterday I was going BR, today I'm not so sure. Why on earth did I get that credit card when I was 18?!?

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/

[MelanieGiles]

Hi skippy

If your proposal says that you cannot seek any variations for the first 24 months (a ridiculous clause if ever there was one in my opinion!) then your IP will probably tell you this is not possible. If I were acting for you however, I would have a go at this probably by initially speaking to the creditor(s) who initiated the modification to see if they really would rather see you go bankrupt than pay something. My gut feeling is that they may say yes.

As I assume that your creditors will get nothing returned to them in bankruptcy, in principle any offer is a good offer here. But you do need to be realistic if you want to guarantee success. I sould suggest that you offer something around the 20p in the £ level, which will probably mean that you will need to introduce about £15,000 to deal with the fees that your IP has incurred to date.

Scaredkez, however, does make some very good points. Do be very careful about putting someone, especially an elderly relative, to equity release from their home. You will never forgive yourself if anything goes wrong to your Mum's finances, and you will not be in a position to help her. Is is all worth avoiding bankruptcy for, where you will be discharged after the first year and probably only making nominal payments for a three year period.

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

[Skippy]

Thanks Melanie. I really don't know what I am going to do, as I to be honest I want to stand on my own 2 feet - I got into the mess, so it's down to me to get out of it. I really wanted your opinion so that when my mum does offer (as I'm sure she will when I break the BR news!) I can have an answer for her.

In my IVA proposal it states that my creditors will get 2p in the pound if I am made BR, so it's a stupid modification if it means they will get more from me if I can offer a lump sum.

I have decided that I won't ask my mum for the money (as I said, my problem, I need to sort it out), but if she offers, I will seriously think about it.

One last question, if I made an offer, would my creditors still want a monthly contribution from me. I am worried that they might say I must be able to afford something.

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/

[freelili]

Skippy

I was in the exact same position, my mom insisted on the equity release, her mortgage was paid off, I refused, my debt, my problem. Afterwards I saw something about equity release companies on watch-dog, I had made my decision, so I didnt really listen to the programme, but I remember thinking, I am so glad I didnt do it. Melanie will answer the lump sum thing, I am sure, but I believe its full and final and thats the end of it. My mom was always healthy and died at 63, never a days illness. However we always knew there was security there if one day she couldnt look after herself. My feeling is that you are having pre-BR nerves. I really think you should not make any decision unless your mind is really clear. I know how scary it is, my court date was booked. Please be careful with this Skippy. We are all still here for you.

I know my situation is different now, but I thank the Lord every day, I didnt take moms offer.

Best wishes for now

LILY

[MelanieGiles]

Hi skippy

If your proposal says that you cannot seek any variations for the first 24 months (a ridiculous clause if ever there was one in my opinion!) then your IP will probably tell you this is not possible. If I were acting for you however, I would have a go at this probably by initially speaking to the creditor(s) who initiated the modification to see if they really would rather see you go bankrupt than pay something. My gut feeling is that they may say yes.

As I assume that your creditors will get nothing returned to them in bankruptcy, in principle any offer is a good offer here. But you do need to be realistic if you want to guarantee success. I sould suggest that you offer something around the 20p in the £ level, which will probably mean that you will need to introduce about £15,000 to deal with the fees that your IP has incurred to date.

Scaredkez, however, does make some very good points. Do be very careful about putting someone, especially an elderly relative, to equity release from their home. You will never forgive yourself if anything goes wrong to your Mum's finances, and you will not be in a position to help her. Is is all worth avoiding bankruptcy for, where you will be discharged after the first year and probably only making nominal payments for a three year period.

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

[Skippy]

You've summed it up really well Lily. I'm currently trying to pluck up the courage to actually tell my mum about the BR - I'll probably do it tomorrow night! I've been reading on the Myvesta website about BR, and although it's still scary, it's not as bad as I thought. The only thing that worries me is that the OR might want think I've been reckless as I have nothing to show for my debts, but I'll cross that bridge when I come to it.

Thanks for your support - I don't know what I'd do without you all xxx

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/

[freelili]

Skippy

How many of us here has anything to show for our ways? We are 'debtors' nothing more and nothing less, they will not be interested, they will be looking for thier fee's. Just in case you didnt know, the meeting usually takes place in a room with a suit and their job is to find out if you have taken advice and know what you are doing. Then its up to the OR, You have tried your best babe, thats what the OR will see.

Good luck babe, it will be ok, I am feeling that once that rubber stamp happens you will be so lightened the OR will be a walk in the park. I wish I could meet you before hand to give you a hug.

Good luck, still here. OOps, arsenal have just scored.

LILY

[Skippy]

Thanks Lily. I have decided that I am going to the court of 5th April. I have already phoned the court and it's first come first served and they can only see 4 people per day - I'll be camped outside before they open! It'll be just like the Harrods sale with me in my sleeping bag! My sense of hunour is returning!

Unfortunately Chelsea have just equalised! This is a difficult one for me as I can't stand either team!

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/

[thebear29uk]

Hi Skippy,

You are right about the equity release. My parents took some money out of their property through Norwich Union. It means they make no repaymayments until the house is sold, either because both have died or gone into a care home. The amount borrowed accrues compound interest for the duration. I think they borrowed £35000 and if they live for another 20 years the amount repayable would be £150000 approx!! So long as the property market doesnt crash horrendously then it should reflect the repayment amount.

They will only lend a percentage of the property value and the percentage increases with age. Lily is right that they have drawn some negative press but then so have IVA's. You may find that if your mum has already taken a lump sum she may not be able to get the amount you would need.

If your mum wants to do it and its feasible do give it some thought. But Melanie is right to say you could be free of your debts in 3 years and your mum's house is there in case anything happens to her and she needs to pay for care etc.

Its never easy making these decisions. Like you say one way of looking at it is having your inheritance early.

Good luck with your decision

Dave.

I can't stand either team as well but would love to see Chelsea lose as they have become too big-headed. Nasty injury to John Terry though.

[Skippy]

I'm going to break the news to my mum tomorrow (wish me luck!), and I am now 100% sure that I won't take any money from her. Why should the house that her and my dad worked for go to pay my debts? To be honest I wouldn't tell her, but if I have to change my car there'll be a few awkward questions. After going through my finances it'll be more like May before I get to court as I need to save the money for the bankruptcy fees.

By the way, what a match, what a fight!!! Just a shame the so called Special One has got his hands on another trophy! I hope Terry's ok - never mind Chelsea we need him for England!

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/

[freelili]

Good luck with the mom thing Skippy, I know whats thats all about also. I was shaking when I told mine, she wasnt too chuffed either, However moms ae moms and they care at the end of the day. I was suffering and she could see that and didnt judge. In fact my whole family rallied around offering this and that. I stood tall and refused, not because of pride but because it was my problem. I thanked them all for their understanding though. I am so very glad I was honest though now. I would never have coped trying to keep my problem to myself as I had for so long before.

Life is such a piece of cake when youre in debt isnt it? (do it asap)
Good luck skippy as always

LILY

[Skippy]

I've just thought of something else to worry me - there is a question on the online BR forms about gambling, asking if you have lost money, and if so how much have you lost? I have gambled a little online - the Grand National and the Lottery, and a few online scratch cards. Do I need to declare this? It was certainly not big time gambling - a couple of quid here and there on the lottery and a couple of quid on the National or Derby. I'm now convinced the OR will think I've gambled away my money! Do I need to declare this?

I know I'm probably being irrational, but all these things keep going round and round in my head - I think I'm going mad!

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/

[freelili]

Hi skippy

If it is a regular occurance then you can list it as expenses, you can list it in gambling if you wish and then it would be up to the OR to decide, what they are ususally looking for are high amounts though. I have just been and asked online at myvesta and they said its not really a problem. Stop stressing it will be OK.(easier said than done, I know) If its causing you this much stress, you could not consider doing it sooner rather than later, the black cloud over you will be lifted that much sooner.

LILY