Individual Voluntary Arrangement

[lois]

Hi guys

 

Hope you are all well and things are progressing for you all.

 

Is anyone out there on the, now, massive, consumeractiongroup website going through or been through the process of setting up an IVA?

 

I owe just over £36000.00 all on consumer credit (credit cards, loans and one catalogue). All my cards etc are all cut up and I've not added to my debts for over a year. Its just that the interest is crippling after a while.

 

I have had a chat with Payplan and also with Debtfree direct (both of which were recommended to me by the Citizens Advice Bureau).

 

I just wanted to see if anybody else was or has been through this and if so, whether you would be able to give me some guidance of what to expect.

 

Payplan will only offer me a debt management plan. The thing that concerns me with that is that creditors can continue to call and there is no guarantee that interest and charges will be frozen. Under a DPM, I would be looking at just over 6 years to clear the debt and thats just on the current amount owing, not including future interest that my creditors would add. I'm not keen on a DPM as the creditors are calling now, and I'm only two weeks late with a payment for Marks and Spencer and in total, M&S have called me 8 times so far, and yesterday alone, I received 3 chasing calls from them. I just cannot handle that kind of stress and it is stressful and its upsetting and I find it intimidating to be frank.

 

Debtfree direct on the other hand, have offered me an IVA and are sending out the paperwork for me to look at. On my current income and outgoings, I can afford around £400 to £500 a month.

 

I would really appreciate some input from somebody who has been through these types of arrangements.

 

The funny thing is that I have never before discussed my level of debt, so none of my family, friends, boyfriend know. but you know what - its funny, because I do feel slightly better just posting this message and in a weird kind of way, its my way of finally accepting the debt in my own mind and trying to get back some kind of handle on my life.

 

Many thanks guys.

 

lois

xx

[dchotcar41]

hi there

 

i have just satisfied my IVA, i had debts of 42000.00 i went with a company called Nuttalls who were excelent i might add i had the IVA for 14 months and only paid back 18000.00 it is quite straight forward and i would recommend anyone with debts of 12000.00 or more to consider it, they wrote to all my creditors and after a month or so the letters stopped my payments went from £900 a month to £153 a month (sound like a tv advert). if you like i can give you there address.

 

 

hope this helps

[caledfwlch]

how does £153 a month for 14 months figure up to £18000? just curious

[kokomar]

Have you talked to your creditor's directly? It's seems a bit cheeky but if you phone all of them up tell them you are stuggling with repayments and ask them to freeze you account and work out a temporary reduced payment they probably will. They will want details of household income and expenditure INCLUDING other debt payments. In my case they gave me three months interest free with minimal repayments £12 M&S £19 Lloyds to sort myself out. I'm using this time to reclaim all the unlawful charges they have taken from me which in my case add up to more than the total debt. When the time runs out I will be well into court proceedings and the accounts will be deemed "in dispute" which will hold the dogs off for a little while longer.

 

Whatever you do KEEP PAYING AS MUCH AS YOU POSSIBLY CAN. This is really important as it shows your goodwill. Start with M&S. I've found them more approachable than I'd dared to imagine.

 

Yes, it's scarey but the empowerment when you take control is great and the people on this site are fantastic.

 

Good luck I'll be watching your thread! Koko

[lois]

hiya

thanks for this.

 

I am working on a budget list. I have to do this for debt free direct so at the moment I am gathering together all my statements etc, for the latest amounts owed on each account and detailing it all on a spreadsheet.

 

I have approached HSBC, SMILE, MBNA and M&S about the difficulties I am having. M&S were pretty good and offered to stop the interest and charges but for no longer than 6 months. Even thought that is a start, I have got to be realistic and though its helpful, it still isn't going to resolve my debt issues, its only going to prolong the inevitable I think. HSBC, SMILE and MBNA would have none of it - when I explained that I was unable to keep up with the interest charges because they were adding a further £100.00 a month alone in interest, she told me that, and I quote 'well, thats the reality of a credit card isn't it?'

unbelievable ... suffice to say I thanked her for her time and rang off.

 

I'm just curious as what sort of paperwork and the step by step process was for an IVA.

 

I guess ultimately, my question is does an IVA make a huge difference, do the telephone calls stop etc, does it do what it says on the tin (as they say!)?

 

dcotcar41 - the details for Nuttalls would be great. Did you have your IVA for 5 years or did you settle it earlier ?

 

thanks guys, I really appreciate your help and support,

 

lois

 

xx

[kokomar]

OK first off I'm no expert and speak only from personal experience.

 

We tried to do a joint IVA with Clear Start but when I added their figures up the amount paid to them in charges (about £4.5k pa) for overseeing it meant our creditors would get a miniscule amount and were unlikely to agree. CS eventually worked this out too and offered us a Debt Management Plan instead and believe me I have never run away so quickly from anything in my life! Not only were the charges nearly as exhoribitant, as you said the interest would not be frozen and in our case we would be dead long before the actual debt was we started with was paid off. Don't get me wrong the IVA legislation is potentially a good thing that can help, however it has led to a whole industry out there geared up to make money out of poor people!

 

No, again in my experience even if you telling them you are arranging an IVA AND give them the contact details and reference number, the phone calls don't stop, particularly VIRGIN/MBNA and to a lesser extent MORGAN STANLEY. One day I'll post all the horrible things the VIRGIN lot said, the pressure was unbelievable. In reality the people in collection call centres are on minimum wage plus commission (I believe about 20%) they will say ANYTHING to get you to pay, in the end when they had identified themselves I would just say simply "sorry no commission today, move on to the next person on the list" this didn't stop them phoning back, but at least managed to lighten my day a bit (they hung up on me - A LOT).

 

Take M&S up on their offer, if only to relieve the pressure a tiny bit, and ring the others again, tell them what M&S have agreed to. Don't speak to a servant, ask straight away to be put through to a manager, say it's an ongoing issue if they won't put you through, be forceful what you need is the one person in the building prepared to make a temporary (six month) decision, take the names of the people you speak to and the date and write letters as well, ie I am disappointed after xx years of my custom that you are unprepared to help etc etc, then make a short term offer in the letter (something you KNOW you can afford) give them a short time limit to respond ie 7 days (that's all they give you after all). Be seen to be trying your hardest. Just keep pushing until you've got your breathing space ...... THEN worry about the IVA (1) because it won't happen over night (about three months in our case for it to fall through at the last minute) and (2) you won't agree to the ridiculous just because you're desperate.

 

The worst thing we did was think that CS were there to help us, they are there to make money no matter how chatty and sypathetic they are on the phone!

 

Perhaps a MOD can advise on making a long term offer of regular payments with frozen interest saying something along the lines of "I believe if you were to take me to court this would be acceptable to the judge", not sure of the wording (or if it will work) but I seem to remember reading another thread along these lines.

 

sorry to be so negative I hope this helps.

 

Koko

[Guest Zooman]

lois, can I asked you a few questions.

1. Do you own you house?
   
2. If yes are you the are the sole owner?
   
3. If yes to 1 how much is it worth?
   
4. How much is secured on it in the way of charges (i.e mortgage, homeowners loan etc)?

I ask as I think bankruptcy would be a better option for you and from those 3 questions we can see if it is viably, I not a fan of IVAs and since if you screw it (IVA) up you are are automatically made bankrupt in any event (and around 50% do, as the monthly payments are set to high by the IPs greed) you should explore bankruptcy before you jump into an IVA.

[kokomar]

3 cheers for Zooman !

[Guest 22pilgrim]

Although not an expert, I've recently done a fair amount of research and I think the following points are pertinent:

* if the equity in your house (your share of it) exceeds your debts, then its very unlikely that your creditors would agree to an IVA;

* if you own your own house and the equity is currently less than your debts, you will probably have to agree to an equity release at the end of year 4;

* if you are likely to come into an inheritance during the course of the IVA, then expect this to be taken into account.

 

My immediate advice is to:

* write asking all further communications to be in writing (this will save your nerves from incessant phone calls);

* write asking the interest to be frozen, and repeat your offer to pay a nominal sum.

Template letters are available in the library.

 

At the very least, this should buy you some time. I suggest that BEFORE considering an IVA or bankruptcy you explore the possibility of making offers for full and final settlements. If your research reveals that this may be possible in a year or two, and that the settlement is reasonable (say 50-75%), this may be a viable option. By then you should expect that you debts to be passed to a DCA (Debt Collection Agency). The DCA may have acquired a debt for a nominal sum, and the original creditor had the debt written off for tax purposes (saves them 40% in tax).

 

 

You might also want to look at these two forums:

IVA Help Forum UK - IVA: have you a question for the experts?

Debt Questions :: Index

[kokomar]

Also have you read this

 

http://www.consumeractiongroup.co.uk/forum/debt-bailiffs-advice/20758-creditors-dcas-letter-templates.html#post162353

 

fantastically useful post from Barracad

[pebbles26]

Hi, i have just read your post and might be able to help. I am currently paying off my debts through the help of payplan, who i pay one sum a month and they pay the creditors for me. Altogether i have 10 different people i owe money to, Seven of them have stopped all interest and charges but the other 3 are lloyds tsb and they havent as payplan cant gurantee stopping it. For example one of my creditors Black horse (owned by lloyds tsb) have received £1844.40p over the last 15 months and they have taken out of that £1665.00p in interest and charges so it's not really worth paying but if you stop they take you to court, i am in the process of waiting a reply from a letter i posted asking them to freeze all interest and charges and if they dont i will stop paying until they realise there charges are ludicrous. Hope this helps Pebbles26

[Guest 22pilgrim]

I may be wrong, but I was under the impression that if the matter went to court, then the interest would be frozen.

[pebbles26]

In some cases yes but apparently black horse and lloyds are the worst and they keep stalling and adding more money on. I couldnt do an IVA as more than half the money was owed to LLoyds tsb and they had final say and said no. It is also to the judge's discretion i was told but while you keep paying it shows good will on m behalf so if it does go to court the judge can see i am trying to pay it off and getting nowhere fast

[edinburghbeerbucket]

I'm not sure how accurate or useful this is (perhaps someone can tell us their experience with this) but a friend of mine was getting a bit overwhelmed with debts. He went down to his local Citizen's Advice Bureau and sat down with someone there.

 

They took all the details of his debts, and within a week had reduced his monthly payments from nearly £800 a month to under £200 a month, including his student loan! And he didn't have to speak to or write to any of his debtors, and they never contacted him either!!

 

I'm not sure what they did... but my guess that sending a proposed payment schedule to the debtors on CAB headed paper might well have made a huge difference. I guess a judge would frown upon a debtor who didn't look at the CAB's proposal.

[caledfwlch]

While IVA does seem to be a useful tool be careful!!!! My parents were put onto one to "save their business" and for some reason the Insolvency Practioner either through intentional behaviour or such sheer incompetence he needs his licence revoked and a good dangling of a bridge forcing them to go bankrupt

 

so choose an IP very VERY wisely

[LondonPam]

There is an excellent website Debt Help UK : Free debt advice and solutions, with debt consolidation | UK debt consolidation service with free help and advice which has many people in your position. They recommend this site so I see no reason why I shouldn't recommend them lol There are a couple of insolvency guys that answer questions so if you post your details there I'm sure they can point you in the right direction.

 

Pam.

[Guest Zooman]

There is an excellent website Debt Help UK : Free debt advice and solutions, with debt consolidation | UK debt consolidation service with free help and advice which has many people in your position. They recommend this site so I see no reason why I shouldn't recommend them lol There are a couple of insolvency guys that answer questions so if you post your details there I'm sure they can point you in the right direction.

 

Pam.

I also post there, many people in your very same boat post on debt help, it's a very good site for insolvency.

[edinburghbeerbucket]

Good link! I was just looking over the scottish equivelant, a trust deed.

 

Sounds like we get a much better deal! All your debts get written-off after 36 months if you haven't paid them off!