Applied for IVA. Sick with worry

A question about : Applied for IVA. Sick with worry

Hi Everybody.
Over the last few weeks this forum has been a complete god send. Only now have I had the courage to post.
We are in the early stages of applying for an IVA. We sent our paperwork off to our IP last week and now it's all just the waiting game which is quite frankly making me feel physically sick.
I am, by nature quite possibly one of the planets worst worriers, doesn't matter what it is, I will worry about it.
Anyway, myself and OH between us owe approx 35k in loans and credit cards, the majority of which is with one bank! Our IP has come back with an initial monthly payment of Ј240 per month which compared to what we are currently paying on debts sounds pretty good to us. I know that figure may well change. I am worried sick though that when it comes to the meeting this will be rejected because the bulk load of the debt lies in the one place. If it is rejected I am worried sick that I will be back to square one in arrears with debt (never missed any payments on anything in my life until now)
I am petrified of bankruptcy. I really don't want that. I don't want to lose my home ( it's in negative equity).
I know I am rambling and with no real questions. I guess I just need a shoulder (or several) to cry on.
This forum has shown me that there IS light at the end of the tunnel but me being typically me, I still can't see it yet
Please anyone, feel free to give me a good telling off, something, anything.

Best answers:

• Hi folks, I'm the other half and would really appreciate any advice from others that have been through this process. I can confirm that judojub IS the world's worst worrier, but hang in there sweetie, we'll get through this...
  Just a point to add to jubs post, the majority of our debt is with Lloyds and we've still got a perfect history of making payments even though it has been to the detriment of getting further and further in debt elsewhere, we just can't keep it up anymore... do you think they'll look at this favourably? as we've been longstanding customers of theirs and have paid off previous credit as required and earlier over the years.
  Grant Thornton seem to think that we have a strong case and although I don't completely trust places that command such high commissions, it really does make sense that they wouldn't support us in the first place if the process were to fail as they'd be left with zilch.
  Anyway, jub has applied for a Natwest Step account card, the paperwork is with GT, so let's see how this rollercoaster ride turns out... I suspect it'll be like a rainy day at Alton Towers whereas jub thinks it's going to be like Final Destination.
• With 35K debt and negative equity, bankruptcy would seem to be an option worth considering, you have nothing to lose.
  You say you are petrified of it, but it could provide a fresh start sooner than an IVA.
  There is nothing to be scared of by the process itself, a few forms, a visit to the county court, some people don't even see a judge.
  You are right to be concerned about the ramifications, which no one really knows unless they've been through it.
  On t'other hand, most posters on MSE who declared themselves bankrupt say they were glad they did.
  I'm not recommending bankruptcy, but there are a lot worse things that could happen to you.
• Hi NeverAgain, do you think if we were forced down the bankruptcy route that they'd have any interest in the house? We're about 110% LTV.
• Hi NeverAgain, I guess I have just had my mind set on an IVA as being the best route for us. With two young children, the thought of possibly losing my home is something that I didn't really want to contemplate. IP has explained the possibility of remortgaging in 5th year if any equity but we would still have our home. I guess I might need to read up on that side of things a bit more.
• ...that they'd have any interest in the house?...
  If the house is a major part of your debt, you might be better off without it.
  There are worse places to be than debt-free and renting.
  I believe bankrupts can keep hold of the house, but it's not something I know a great deal about.
  As you say, worth a bit of research on your part, and maybe a question on the bankruptcy board if bankruptcy emerges as a serious option.
• I am in a very simular position to yourself and looked at both IVA and BR with unsercured debt totalling 51k. The only reason that I choose IVA over BR was the future employment difficulties, not being able to be a director of a company if registered as BR.
  A friend of mine went through a simular thing 18months ago and he couldn't get the IVA agreed because the dividend was too low. He went BR but was allowed to keep his house and the mortgage as he was in negative equity and could afford to pay the mortgage as his only debt.
  Look into it further.
• Rules have recently changed regarding houses .... the OR will now keep a charge on the house for 2 and a bit years, in the hope that some equity materialises --- if, at the end there is equity -- the house could be sacrificed for the benefit of creditors. Grant Thornton should explore all avenues with you before you commit to IVA.
• Thank you all.
  Grant Thornton have up to now been very forthcoming with their advice. I briefly spoke to them about DMP but this was never a serious consideration for us and apparently it would take us just over 14yrs to pay the debt off!!
  They have also spoken to us about Bankruptcy and IVA being the only realistic options. I told them from the start that I wanted to avoid bankruptcy ( I had only researched IVAs).However, I must start acknowledging the fact that BR is very much a possiblity. All I know is that for my own sake and the sake of my little family, we can't carry on as we are any more.
• By the way -- on the subject of GT's fees ... the norm these days is about Ј1750 - Ј2000 for the prparation of the proposal ( Nominees fee) and then 15% of the realisations thereafter (Supervisors fee). This is what is usually asked for by the creditors, although some IP's will pitch a little higher in the hopes it doesn't get forced down by the creditors (bargaining room).
  Don't be afraid to chat to several companies ( a list with reviews can be found at www.ivs.com) -- after all this will be a long association, so you need to be happy with your choice.
• Thank you FoggyBrain. Those figures you mention are indeed the figures that our IP has put down in the initial paperwork she sent to me!
  As I said earlier, she has come up with Ј240 pm on approx 35k debt. According to her figures that would be around Ј14,400 (less her fees I suppose).
  Does this sound reasonable or ridiculous?
• The crux is to come up with a repayment that is affordable to you --- the dividend this produces is secondary, as long as the creditors like it. I have seen 19p in the pound being accepted ---- if you went BR they know they would get a lot less (in many cases, nothing at all!)
  GT wouldn't put it forward if they thought it wouldn't be accepted. However, as always, creditors are fickle creatures.
• Poorgrad -- that's the situation regarding equity in bankruptcy. (2 and a bit years). In IVA the equity is looked at half way through the final year. What happens depends on the terms of the proposal --- modern (protocol compliant) IVA's ask you to attempt to release any equity (if it is over Ј5K). YUsually this cannot be done and the IVA extends by 12 months. If less than Ј5k equity it's usually forgotten. Older IVA's have different terms individual to each IVA.
• Yes FoggyBrain. I have questioned GT repeatedly due to my slight obsession with worrying about things that have not even happened nor are likely to!
  GT quite rightly said that they wouldn't waste our time, their time or anybody elses if they didn't think it stood a good chance!
• Thanks for the helpful advice everyone.
  Quote:
• Dude -- that retraining is one big plus to the IVA process. Since starting mine I have never been so financially organised (never had savings before either - but am managing to save a little each month from the allowances .... I am sure something will blow up or disintegrate before the IVA is done! ).
• Dear Judojub
  I fully understand your worried stated - the only things that kept me vaguely sane were the posts on this Board! The wealth of information helps so much, whatever stage of the process you are at.
  I have 51k of unsecured debt and the creditors were offered Ј231 per month. I was told that the IP wouldnt put forward this amount if they didnt think it would be accepted - to my utter relief it was accepted by all, and the only thing to be changed on the proposal was the amount of fees the IP could charge - max Ј2000. I hope this gives you a glimmer of hope if you decide on the IVA. Good Luck to you and keep reading the Board, there's so much support and advice to help you get through!
• Thanks so much everybody!
  @ Strugglebunny. You are so right. This board has been great 'therapy' for me! I can read fact and info sheets until the cows come home. I can talk to my IP til I am blue in the face (she is probably sick of my constant tears!) but to read other peoples experiences and give myself some sort of idea of what I am about to put myself through is somewhat comforting
  Now, I do have a question. I applied for a new bank account last week (probably left it a bit late I know). I still haven't heard anything from them yet. My worry is this. All my priority debts and unsecured debts all come out of the same account. I doubt I will be able to shift all my priority debts before next pay day. I am just concerned that once Lloyds get wind of what I am doing they will close my account resulting in my priority debts not being paid!! Is there anything I can do should this happen?
• I doubt Lloyds could act that fast !!! In any event I am sure they have to give you adequate notice to enable you to make any alternative arrangements.
  Which bank have you applied for ?