IVA`s....whats your opinion?

[pebs]

Its not for me, luckily I only have 1 default.

But a friend of mine is in debt about £40,000 and now is on a low income so has not been paying debtors.

I have seen advertisments for IVA so was going to suggest it, but I dont really know much about it so would like some opinions please.

[pebs]

Any advice would be appreciated....Thanks!

[gizmo111]

Some info here

 

Generally they involve living on a very tight budget for 5 years. Has she got assets to protect?

[conar686]

Also the big banks are now not automatically agreeing to be bound to accept any proposed IVA.

 

For an IVA to work all or a majority of the creditors have to accept. Its worth a try but go for a free on not one you pay for.

[pebs]

Some info here

 

Generally they involve living on a very tight budget for 5 years. Has she got assets to protect?

 

 

She does have a mortgage and the mortgage company have agreed lower payments till they are in a better position.

The rest of the debts are personal loans and secured loans, credit cards etc

[pebs]

I`ve just rang her, she has no equity in the house as they borrowed it, hence the debt of secured loans!

[gizmo111]

I`ve just rang her, she has no equity in the house as they borrowed it, hence the debt of secured loans!

 

Well prhaps bankruptcy may be an option then, if they had not other debts could they realistically afford the mortgage and secured loan.

Would renting in their area be cheaper?

[conar686]

I also think she should also give this lot a whirl.

 

National Debtline

[pebs]

She was going to declare herself bankrupt, but thought she would lose there home.

Renting is no cheaper in the area really, yes she is just about managing paying the mortgage and utility bills but cant manange much else.

[pebs]

I also think she should also give this lot a whirl.

 

National Debtline

 

Thanks, I`ll pass the details on.

 

She has been scared to open letters, not like me I love a good argument with a dca!!

[gizmo111]

It is scary and a lot of people do bury their head in the sand. As she has no equity, there would be nothing for the OR to take so it is unlikely she would lose the house. But she does need to be sure that she can afford the house, as in a years time if she ends up repossesed she ould end up with a shortfall, which will be another debt she can't pay and she doesn't want to be in the position of facing BR a 2nd time.

In the link I gave you above - there is the links to debt charities including National Debtline.

A realistic budget is her first step to sorting this out.

[pebs]

Thanks gizmo, I will give her your advice.

She does not have access to the internet or she could join this forum herself!

I will try to help her though, I`ve already sent a cca request to a credit card company for her since I found this site!

[pebs]

Sorry can I just ask....if you declare yourself bankrupt can the secured loans be written off or just the personal loans?

[gizmo111]

Sorry can I just ask....if you declare yourself bankrupt can the secured loans be written off or just the personal loans?

 

The secured loan and the mortgage remain, and provided she can pay them nothing will happen to them. The unsecured debt gets written off.

[pebs]

Thanks again!

[conar686]

Get her to phone the national debtline & also local consumer counciling service.

[gizmo111]

How much of the £40K is unsecured debt?

[pebs]

£27,500 in an unsecured loan. All other debts are a few hundred here and there

[pebs]

Get her to phone the national debtline & also local consumer counciling service.

 

 

Thanks, I have just text her with the details of debtline

[gizmo111]

£27,500 in an unsecured loan. All other debts are a few hundred here and there

 

In which case bankruptcy for £12,500 is prob not the best idea.

Can she remortgage to a better rate and include the secured loan in that?

[pebs]

She has just rang me with the wording from the most recent letter for the unsecured to see if you can offer advice on a response to them.

It has not yet been passed on to a DCA.

Can you take a look and maybe advise on her options, Thanks

 

Unsecured balance - £27,558

 

Further to our default notice of 3rd Oct and your failure to pay outstanding arrears of £498 we are now terminating your loan agreement.

 

We therefore demand you pay the sum of £27,558 plus interest from the date of this notice until full payment has been recieved at a rate of £5.74 per day.

 

Failure to pay within the next 14 days may result in instructing our solicitors to recover the amount through the county court.

[gizmo111]

So the loan is unsecured? Who is it with?

[pebs]

In which case bankruptcy for £12,500 is prob not the best idea.

Can she remortgage to a better rate and include the secured loan in that?

 

Apparently not because of negative equity.

 

I am so glad I am not a home owner, it sounds all too complicated to me!!

[pebs]

So the loan is unsecured? Who is it with?

 

 

Northern Rock

[gizmo111]

Northern Rock

 

Is this loan attached to her mortgage - together I think they call it.

 

You said earlier that she borrowed the equity - i thought that was this loan.