Questions about Individual Voluntary Arrangements and Insolvency.

Moderators: TalbotWoods, JaneClack

By worried1too
#124144 Can someone number crunsh for me as I am going round in circles.

Total debt £120K
amount spare per month £512.00

value of House 120K
at present mortgaged up to 73k
120K-15%=£102K
So they would be able (in theory at the moment) to raise 29K on their house. (Not sure what rate of interest payable in an IVA can you just remortgage for £29K? anyone know a good company.)
Loan from friend £6.000 (would go up to £9000 if needed)
so they would be able to raise £35K

I think on 120K they would need 30K (+5k for IP)=£35K

This would give creditors 25% and IP £5000

Is this likely to be accepted?
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By submariner
#124161 In my absolutely non-expert opinion, (but I have been through it myself very recently) you may be reckoning to raise too much from your house and not allowing anything for mortgaging costs...

I was told to allow 75% as maximum mortgage in an IVA, less 2.5% +VAT (of max house value) as notional mortgage fees and (as you say) less IVA fees, which in my case worked out as about 6.5K inc VAT for a F&F after a year (dont forget the VAT!). Maybe you can get more mortgage... but do you want to pay it at slightly higher rates than "high street"? and don't forget the fees +VAT (and I'm not talking about anything up front... you certainly don't need to pay anything until the deed is done :) )

Best of luck: it seems that if you can raise in excess of 25% you are in with a chance, as long as you can get the agreement of your IP in the first instance (mine was great... extremely positive and helpful and overall it worked a charm! - i.e. not through a factory, although it was set up that way initially... the IP stepped in personally and gave individual help to finish it all. Lovely!)
By £76K
#124178 Yes you figures work, however , how much is owed to NR?

If they say no this is a no go if they are owed £24K & you are back to monthly IVA with an equity release & possibly an early end if the friend will pay in after 2 years
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By hugehole
#124359 I had enough capital from friends and family for about 26% of my debt - was told catergorically by IP that both AMEX & HSBC would not budge for less than 40% offer and both of these accounted for about 40% in total of my debt of £92K.

So went bankrupt a fortnight later instead. my property has a 2nd charge on it and is in negative equity - so nothing to take - but am waiting to find out from the OR what happens to the property - I hope that someone (a friend or family member) will buy the beneficial interest - so I don't have to move.
By worried1too
#127203 Thanks for previous info.
New info: Their mortgage is with Northern Rock, 59.5k outstanding and 12K unsecured loan on same payment. Anyone heard of this before? Can the 12K be skimmed off mortgage and go into IVA?

In all they owe approx £165K,not including mortgage. (36+above 12=£48K to Northern Rock), 16.5k to me and the rest to about 12 credit cards/loans, sois there is enough to vote for yes to outvote northern rock????
By mellowman
#127232 The £12k will have to go into the IVA, it's an unsecured element of the lending, plus the mortgage payment will decrease because it will no longer include the £12k debt.
By £76K
#127279 Can they raise the equity & go for a full & final IVA???? You said before you may be able to chuck some in if needed, but don't offer to yet. How much do they owe NR & do they owe HSBC, I am sure you have said but can't remember
By worried1too
#127483 76K,(Mellowman also) they owe HSBC £5002.98, They borrowed £25K from Northern Rock, who now say they owe £36.500 + their mortgage is with northern rock it is made up of 59.5k and £12 unsecured loan,(see above - mellowman says it can go into IVA) so apart from NR mortgage they owe £48.5K to NR. We could have chucked in £10K, but have started paying it off on the £16.5k they owe us (we in turn owed £13.5k to credit cards = sis & Bin want us to do this)We could always get it back by putting it back on credit cards I suppose. How would they raise the equity,if they remortgage the house the IVA would want it anyway wouldnt they. Also can NR be outvoted as I hope/think?
By mellowman
#127485 it doesnt look like you can outvote Northern Rock, why would you want to?
By worried1too
#127649 Mellowman said:
it doesnt look like you can outvote Northern Rock, why would you want to?
I'm not sure how this works, they have £602 disposable income and they owe approx £150K (nearly sure of figures now). 600x60 months = £36k. One quarter of 150K they owe is 37.5K+8K for IP is 45.5K, so they cant reach 25% let alone 40% that northern rock would want, thats why I would have wanted to outvote NR. They have mortgage for 60K and value of house is 120K so equity in the house of £60K(submariners post to someone else 10/12 very helpful, means they would be able to mortgage to 75% and put 21K into IVA pot, after mortgage charges.) If NR want 40%of £150K thats 60K +, I presume, they would also want the £21K equity equals 81K. Or not???

76K They oWe HSBC £5002.98

They also have a special needs child, and £230 per month payment that IVA can't take into account. IF IF IF they could save that for 60 months =£13,800. I think they would have to save it in childs name or IVA might take it? They might not have to remortgage??
By mellowman
#127660 You no longer need 40% return for Northern Rock to agree an IVA, they have advised that they will look at all cases over 25%.

Righly or wrongly the DLA they receive will have to be included into the family income also. They can "try and break even" and increase the family expenditure, but if the company who is proposing the IVA find out, they will have to declare this as an income.
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By Dab
#127666 Seems to me that you're approaching this from the wrong angle and trying to fit the circumstances to suit an IVA, rather than deciding whether an IVA is an appropriate solution.
There's a tendency to see an IVA as a 'magic' fix and I often see clients seize it as a lifeline, regardless of whether it's the right thing to do.

I suggest you speak to CCCS or Payplan and see what they say - they'll be able to deal with other issues such as minimum dividends if they apply. Apologies if you've already done this - I haven't read your other posts.
Bysharon
#127682
mellowman wrote:You no longer need 40% return for Northern Rock to agree an IVA, they have advised that they will look at all cases over 25%.

Righly or wrongly the DLA they receive will have to be included into the family income also. They can "try and break even" and increase the family expenditure, but if the company who is proposing the IVA find out, they will have to declare this as an income.



No they cannot include the DLA in ANY calculations!!!

DLA must be disregarded for EVERYTHING!

Those are the rules on DLA
Bysharon
#127683 The costs for an IVA are around £8K, not £5K
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By Shameless
#127706
sharon wrote:The costs for an IVA are around £8K, not £5K


Not always. fees are quite often around 5k.