keitha
Member of DD Central
2024, hopefully the year I get out of P2P
Posts: 3,875
Likes: 2,313
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IVAs
Feb 9, 2020 23:58:56 GMT
Post by keitha on Feb 9, 2020 23:58:56 GMT
My understanding of an IVA is the debtor agrees to pay a percentage of the debt, the creditors accept this as the outcome is likely to be better for them than insolvency.
Once the IVA agreed the debtor then makes payments every week / month as agreed in the IVA proposal.
IVAs can obviously therefore fail if the debtor fails to keep to the agreement ( not sure how long before it would be in breach )
Why is I therefore that P2P companies don't appear to monitor performance and get tough on those that fail to pay.
I have a couple where the IVA was agreed in the middle of last year and not a penny paid, nor has one from September.
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adrianc
Member of DD Central
Posts: 9,000
Likes: 4,815
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IVAs
Feb 12, 2020 20:29:01 GMT
Post by adrianc on Feb 12, 2020 20:29:01 GMT
My understanding of an IVA is the debtor agrees to pay a percentage of the debt, the creditors accept this as the outcome is likely to be better for them than insolvency. Once the IVA agreed the debtor then makes payments every week / month as agreed in the IVA proposal. IVAs can obviously therefore fail if the debtor fails to keep to the agreement ( not sure how long before it would be in breach ) Why is I therefore that P2P companies don't appear to monitor performance and get tough on those that fail to pay. I have a couple where the IVA was agreed in the middle of last year and not a penny paid, nor has one from September. OK, so the debtor fails to pay the IVA. Then what? Push them into bankruptcy? That's not going to bring anything else in, is it?
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keitha
Member of DD Central
2024, hopefully the year I get out of P2P
Posts: 3,875
Likes: 2,313
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IVAs
Feb 12, 2020 21:45:50 GMT
ozboy likes this
Post by keitha on Feb 12, 2020 21:45:50 GMT
My understanding of an IVA is the debtor agrees to pay a percentage of the debt, the creditors accept this as the outcome is likely to be better for them than insolvency. Once the IVA agreed the debtor then makes payments every week / month as agreed in the IVA proposal. IVAs can obviously therefore fail if the debtor fails to keep to the agreement ( not sure how long before it would be in breach ) Why is I therefore that P2P companies don't appear to monitor performance and get tough on those that fail to pay. I have a couple where the IVA was agreed in the middle of last year and not a penny paid, nor has one from September. OK, so the debtor fails to pay the IVA. Then what? Push them into bankruptcy? That's not going to bring anything else in, is it? Might do if they have assets such as property although an IVA gives them the chance to "dispose " of assets, but IMHO no point in an IVA if non payment has no consequences
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IVAs
Feb 18, 2020 13:35:41 GMT
Post by propman on Feb 18, 2020 13:35:41 GMT
Usually the IVA arranger charges significant fees. The borrower pays regular amounts to the arranger, but there is no money for the lenders as these are all sucked up by the arrangers charges for the first year or more. Also, many IVAs require the borrower to extract equity from their property. Often this is only required at the end of the term, often 5 years. The assumption is that house price inflation will provide a substantial and reliable amount. I don't know how this has been affected by tightening remortgage criteria making extraction of equity much harder. In addition, if they have failed to meet the IVA requirements, they are likely to have a continuing bad credit history so may not be able to remortgage at all. The answer is for the lenders to get an attachment order over the property giving them a second charge, but there are likley to be significant costs that they will only get back when the property is sold.
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