Extra 2 years added onto my IVA

Edit Subject

Hi Sally,

Andrew is looking into this now for you and will be posting a response soon.

Thanks,

Nazma

Thanks Nazma.

Hi Sally,

A number of colleagues and I have looked at this and we hope the following answer will help you, and anyone else who finds themselves in a similar position.

First, we’d all like to say how sorry we are that this has caused so much stress and anxiety – and that we hope things are clearer and more positive for you now.

A short answer, that won’t be of much help to you I’m afraid, but which should reassure many other readers, is that the situation you found yourself in is very unlikely to happen to anyone starting an IVA now: Protocol compliant IVAs treat property differently and the maximum additional payment period will, usually, be 12 months.

Sadly, your IVAs were put in place by a company other than us and before the current IVA protocol.

What this meant was that, in your cases, the arrangements provided for monthly contributions over 60 months – plus substantial lump sum contributions from each of you to be made available in year four of the IVAs.

We understand that the equity in your property at that time was worth roughly four times the lump sum contributions that were agreed in your IVAs, but that 12 months additional IVA contributions would only bring creditors 40% of what you had agreed to pay over the life of the IVA. You could not remortgage because the loan-to-value ratio was too high.

The possibility therefore existed that the IVA might fail – a tragedy as you’d worked so hard - or that, to give creditors the amounts you had agreed to originally, you could be forced to sell your house, either as part of the IVA or through bankruptcy. Nobody wanted to see that happen!

We negotiated with creditors to get them to accept 24 months contributions from you, which is roughly 80% of what you had agreed to pay. We believe we did well to secure this result and were pleased that you ended up with an IVA variation that substantially reduced the amount you needed to pay into your arrangement.

I know the variation meeting with your creditors took place with your authority and that the position (and consequences of not dealing with it) was explained to you over the phone and confirmed in writing.

My colleague Adrienne was really pleased we’d been able to negotiate this – there are some older pre-protocol cases which fall into this “high equity - can’t remortgage” trap and we established a way out of it as a result of your case.

Adrienne would like you to know that she was really appreciative of the emails you sent thanking her for her hard work on this knotty problem.

It must be very disappointing to know that you have a further two years of payments to make when you thought your IVA was nearly over. But, we believe you’ll agree the alternative was far worse and, of course, at the end of your IVA you will have kept your house and the equity in it, to rebuild your financial future.

Dear Andrew
Thank you very much for your reply. It is very much clearer now. It is a shame that we had not started off with Cleardebt as the outcome may have been different. Unfortunately when we started out on our IVA journey we were very inexperienced and did not ask enough questions, we were just so grateful to be able to enter an IVA (our own fault entirely).
Indeed since Adrienne has been our case worker, she has bent over backwards to try and help us and explain things to us. She has been very thorough and we could not expect any more of her. When the extra two years was muted by her, I was very shocked and upset, but have now understood why and am resigned to carrying on for two more years. My husband and I are very grateful for all of the work that Adrienne has put in on our behalf. She is always very polite and has the patientce of a saint. I just hope that the next two years go quickly and smoothly.
Please let Adrienne know how grateful we are to her and the rest of the team.