considering IVA query regarding including court agreed pay plans

[Scousebird333]

have been administering debts for last 3 years+ .............. no end in sight.
as well as various debts i have:

x1 LARGE [failed] business premises utility bill - lost case - ending with an offered and judge agreed monthly payment [utility co didnt like amount and verbally objected as will take 15yrs to pay off.... but judge ordered it and they never came back at a later date with any formal objection.] also interestingly no ccj recorded and payments regularly made.

x1 CCJ secured on house. payment amount agreed again in court room with option for reviews annually but as yet never amended due to no change in financial circumstances. payments being made.

my query is this:

• can i include these court agreed debts into any IVA proposal - or do they have to remain stand alone as they have gone through the court process?
• hypothetically............ if included into an IVA potentially the payment amounts may need to be amended as disposable income will have to be proportionate to total pot debt amounts? so all creditors get an % equal of the money in the pot? [if so, would a formal court amendment be required also to reflect reduced payments]?
• hypothetically........... if included into an IVA and then i sell my house would the secured CCJ still get the full £ owed - or would they have lost that right by accepting the IVA?

hope these questions are sensible?
any advice welcomed.
also have dca query but will put that into court claims with another post.......!

[Debt Camel]

Re: considering IVA query regarding including court agreed pay plans

The unsecured CCJ - this will be included in an IVA. There is no need to vary the amount paid to the CCJ by court order,

The CCJ that is now secured - that cannot be included in an IVA. The amount you are paying to the secured debt should remain the same, unaffected by the IVA. If you sell your house it will be repaid in full.

If you are considering selling your house at some point, now may be the best point to do that. If you sell your house whilst you are in an IVA, it is normal that the equity in the house has to be paid into the IVA. It may well be better to sell now and use any equity to make full & final settlements on your debts. This avoids the IVA fees and having insolvency on your credit record.

If you do not sell your house, then in the 5th year of the IVA you are likely to have to try to release equity. Now most people find it impossible to remortgage at this point so they just have to make a sixth year of IVA payments. But some (?most) new IVAs being started have an unpleasant "remortgage or secured loan" clause... I have seen people being told they must take a 15 year loan at 19%... horrible.

If you could summarise your situation, there may be other pointers for you to consider. How large are your unsecured debts including the CCJ? How large is your mortgage, is it repayment or IO? the secured debt? how much is your house worth? Roughly what is your disposable income that could be paid to your debts after living expenses are deducted? Is your income secure? Do you have children, how old?

There is a general guide to IVAs here: http://debtcamel.co.uk/debt-options/guide-to-ivas/

have you tried to reclaim PPI on your debts?

[Scousebird333]

Re: considering IVA query regarding including court agreed pay plans

thank you debtcamel.
i thought the secured ccj couldnt be amended/included but wanted to be sure.

however the unsecured ccj is a disproportionate % of what would be classed as disposable income.
i know in general if i wanted to reduce a court agreed payment it would need to be ok with the creditor and sure they would refuse under normal circumstances; hence why i asked how it would be looked at if included in an IVA; and again if they would have to then accept a reduced payment?

i am aware that for an IVA it is usual to have to be classed as insolvent [just about am!] and that equity has to be less than debts [just about] to avoid possibility of being forced to sell and that they also look at mortgage payments and if moving would reduce living costs [it would as my mortgage is not on a fixed deal due to debt issues - but credit history shot so no chance of getting lower mortgage or porting/moving the one i have and my lender is unsympathetic; and i would probably even struggle to rent.........].
i have read some horror stories of people doing the extra year as cant remortgage, then being forced to do more years with no end in sight.......

i will read the guide - thank you for the info!
i, like others, feel embarassed by how i have gotten into such debt............. a failed business didnt help - but after climbing uphill for 3+ years getting a bit tired of it all so need to draw a line.

[Debt Camel]

Re: considering IVA query regarding including court agreed pay plans

however the unsecured ccj is a disproportionate % of what would be classed as disposable income.
i know in general if i wanted to reduce a court agreed payment it would need to be ok with the creditor and sure they would refuse under normal circumstances; hence why i asked how it would be looked at if included in an IVA; and again if they would have to then accept a reduced payment?

Your creditors have to vote on an IVA - 75% of those voting by size of debt have to approve. So if this creditor has a large proportion of your unsecured debt, they could veto an IVA.

If an IVA is approved, then all the unsecured creditors are bound by it, they can't try to enforce the CCJ they have or make you bankrupt.

they also look at mortgage payments and if moving would reduce living costs

it would be pretty unusual for an IVA to be rejected on this basis. If you are now single with no dependents living in a 4 bed house with a large mortgage, then obviously it would be preferable to downsize.

Other things to consider - do you have a spare room? you may not want a lodger, but if renting a room out for a few years could make a huge difference to your debts, then this may be better than getting tangled up with an IVA or selling the house and renting.

My last suggestion of reclaiming PPI was very serious. If you start an IVA any PPI will go into it. I have seen too many people get very large PPI payouts - 10, 20, 30k and more - who would never have needed an IVA if they had reclaimed PPI first and used the money to make final settlements on their debts. Most of these people didn't think they would get much if any PPI!

i would probably even struggle to rent

Assuming you have equity in your house after paying the mortgage and secured CCJ, then you shouldn't struggle to rent - many landlords will be very happy to take you as a tenant if you can pay 6 months rent in advance. If you decide to to go the "sell the house" route, then the order to proceed is (a) sell the house (b) move and settle all house / mortgage / moving / rental costs then (c) consider how much money you then have left. At this point full and final settlements may be an option or even a "single payment IVA" at this point.

I like others, feel embarassed by how i have gotten into such debt.

Debt happens. for most people it is some combination of bad luck bad timing and poor decisions. But feeling embarrassed isn't a helpful mindset as it can make you feel obliged to make payments you can't afford, or not look at options because they sound bad. If your debt situation isn't getting better and you have been struggling for three years, then you should be considering a "formal" debt solution such as insolvency or selling the house. Otherwise you will be in much the same situation in another 3 years, but 3 years older...

I think doing as much research as you can and then talking to a debt adviser might help.

[Scousebird333]

Re: considering IVA query regarding including court agreed pay plans

Thank you
i defo didnt have ppi on cc debt as was self.employed at that time so knew they wouldnt pay out.

I do recall back in 1986 first (nationwide) mortgage with ex husband did had a 12mth 'insurance' due to ltv i think. Did wonder if this was ppi?

I do have lodger..... working 2nd job.... for 3 yrs now. Hamster wheel. House up for sale 2yrs....offer just.received 20k below.

You quite right dont want to be 3 more years down road..... and still same.