IVA Administrator wants to run an IVA for an extra year

[comebackjimmy]

My sister in law took out an IVA almost five years ago and it now has about three months left to run.

My SIL has forwarded an email she received from the Insolvency practioner which says (in part):

...following the Variation meeting to remove the obligation to look into releasing equity I understand that you are unable to approach your husband regarding the property, so they are happy to remove the obligation however they want an additional 12 months contributions to compensate creditors therefore the IVA will run for a further twelve months.

They are seeking her agreement to this.

As I understand it whilst they are married the house is only in my brother's name as he had it prior to the marriage (20 plus years go) the debts are card debts that she has in her name.   It would seem the IVA is trying to get a charging order on the house and not succeeding because my brother wont have it.

I am not knowledgeable regarding IVA's so would welcome any advice here but can she refuse to go another year?  I suspect some fleacing attempt is going on here by the IVA practioner.

I am tempted to advise (and assist) that she asks for copies of the original agreements and if , as seems usual, they cannot supply those documents then the debts are unenforceable and she could stop paying anyway.

any thoughts gratefully received.

[dx100uk]

99% of what she has been paying goes to the IVA provider as their fees anyway.

and as you say, not a lot they can do to her, the IVA company (who are?) most certainly can't.

shame she got taken in to starting it (by whom?) as i bet most debts are unenforceable and historic anyway.

stop paying and ignore them IMHO.

but lets see the players first.

dxc

 

[comebackjimmy]

Forest King insolvency Ltd.

Waiting to get the names of the creditors but it will be people like Lowell, debt buyers, and the original creditors will be credit cards like Tesco bank, HSBC, Lloyds etc.

[dx100uk]

3 hours ago, dx100uk said:

stop paying and ignore them IMHO.

or say no to the extension but don't give them any more money beyond the £sum of the 3 mts to go...esp 'fees' for 'closing it down. see what they do....

how much £PCM i she paying now.

dx

 

[comebackjimmy]

Thanks for the various replies.

She is currently paying £100 per month.

Last week they contacted her again and said that if she did not agree to the one year extension by Tuesday April 2nd then the IVA might fail.  She was a little alarmed by this.

I asked her how it was possible for it to fail on Tuesday if the payments were up to date and the initial term of five years still had two months to go .   I told her they were putting unfair pressure on her.

I have advised her to write to them asking for  a copy of the original agreement and to ask which part of the agreement allowed them to add a year and why it would fail on Tuesday in particiular if she did not agree to an extension.  I also told her to tell them that future communications had to be in writing.  (I bet they would not have said it would fail in writing!).

Further to an above question her creditors are as follows:

PRA Group   £12912

PRA Tesco Bank:  £6732

LC assett: £5365

PRA Tesco Bank £3022

Paypal Credit: £922

[dx100uk]

all are dca's and don't ever need paying as you already know.

sorry shes been had blind by everyone. esp the IVa provider

pers i'd not bother writing , pay the remaining months then STOP.

then ignore them.

so what if the IVA fails...tough luck on the dca's, it can't hurt her at all.

dx

 

 

[comebackjimmy]

There has been a couple of events as follows:

My Sister in Law had sent an email requesting a copy of the agreement,  an indication of where in the agreement there were terms indicating it would fail and an insistence that future communications would be by written means only.

This may have rattled them or not but the following letter was received:

A virtual meeting of the creditors was convened for 2nd April to consider a variation to your IVA.  The variation meeting has been withdrawn and the IVA will continue as per the original proposal.   Should you have any queries......etc.

And then the following:

 

You may recall speaking to my colleague last week about the meeting we held with your creditors.  This meeting has now been withdrawn, however to prevent the IVA from failing we do need to resolve the issue with the property.

 

When the IVA was accepted, the property wasn't included - however creditors added a modification to your proposal to ensure that they obtained some monies as you have an equitable interest.  

As you have agreed to the modification (verbally and then electronically signed - see attached) - the arrangement was confirmed. 

 

There are 2 months left of your original IVA, but it will not be able to complete unless an agreement is made with your creditors.  I note from your the call that your husband advised that no further monies were to be forthcoming.  When we last reviewed your case in November 2023 - the information we received demonstrated that the payments to the IVA were affordable.  

 

I have attached the workings used for your payments, and would like to invite you to update anything that you feel has changed.  Please note, that I am unable to change anything without evidence, therefore I would require the last 3 months of bank statements along with your tax return to show proof of earnings.

 

Where possible, we can then look to approach creditors with another offer.  

 

I have advised her to do nothing.   I am no expert at IVA's but I get the sense they are thrashing around trying to get something out of it.

 

What do they mean by the phrase "will not be able to complete" (which they underlined in their correspondence)?

 

The current plan remains which is to make the last two payments of the original five years and then not pay any more. 

 

I am suggesting that after she had made the last payment she notify them in writing that she will not be paying any more and withdrawing authorisation for them to debit her bank card also suggesting she advise her bank to stop any future payments to them.

[dx100uk]

good work.

dont respond no. never respond.

get her to ring her bank and CANCEL the Continuous Payment Authority (exact term only!!) to the named IVA company.

CANCELLING THE CARD ALONE DOES NOT WORK.!!

[lolerz]

If you cancel the CPA now just remember to pay your final 2 payments online by card or by bank transfer (dependant on the IVA)

[comebackjimmy]

Thanks for the comments.

I have already suggested to her that she make the last two payments at the usual time (when they debit her card) and only thrn to both cancel their authorisation by writing to them but also advising her bank .

I am already aware from seeing other posts on this site that sometimes it is necessary to be very clear with the bank about cancelling a particular CPA.

Thanks everyone for your help.

I will put any updates on here.

[Will Goodfellow]

Where a person who owns or partially owns a property enters into an IVA, it's usual practice that in the fifth year, the person has to attempt to re-mortgage the property to release equity.

It's extremely rare that a homeowner will be successful in re-mortgaging due to having a poor credit rating.

Where the owner is unable to re-mortgage, the IVA is extended for a further year.

This is absolutely normal practice in an IVA, and if your sister cancels payments to the IVA, the IVA is at risk of failing and she could be made bankrupt, therefore losing any equity she has in the property. 

[dx100uk]

could

might

oh what by a useless restriction k.

people should never enter into IVA's in the 1st place 90% goes on their fees.

and all the debts are consumer ones too...

 

 

[Will Goodfellow]

The charging order is a red herring. If the IVA fails because payments are stopped, the IVA practitioner can bankrupt the sister.

Depending on the amount of equity in the property, if it's quite high, that's a very likely outcome.

Advising the sister to just stop making payments is absolutely terrible advice.

[dx100uk]

could ....not can.

never seen it here once.

dx

 

 

[comebackjimmy]

It so happens that a couple of years ago I assisted a friend who had an iva by writing to the 10 or so creditors asking for copies of the original agreement and none could be provided. 

He then stopped the iva and face no further consequences.

 

 

[dx100uk]

10/10 jimmy

yea well most of us dont come from an ex national debt line/payplan/stepchange/CAB/crap own website/ whatever indoctrinated background whereby its inbred to believe the crap these company's trot out to their so called advisors is correct

had soo many of them here over the years that just cant believe the stuff they've been told is WRONG and simply waste our time coming here with so called proof they are experts....NOT!!

they usually disappear for a few years then either comeback or try and change usernames and try again spouting their utter rubbish

 

dx