Any ideas?

[Johndog]

I am 1 year into an IVA. My mother who is elderly has suggested she cash in some of the equity on her home to clear the debt. As I live with my mother is there any way she can release the equity (bearing in mnd that she is reliant on a pension) I really do not want to loose my home on her death via the various equity release plans. Any ideas?

[MelanieGiles]

Hi lsO and welcome to the forum

I assume that your Mum has no mortgage on the property at present. Why not consider taking out a joint mortgage over the property, where you become responsible for the repayments. This will mean that the property can be transferred into joint names, and this is unlikely to affect your mother at all - indeed it makes for good future planning as her assets will be used to fund care in the event that she has to go into a nursing home (sorry to mention something horrible, but it is worth thinking about these things now).

She can gift you a portion, if not all of the property, as so long as 7 years pass between the transfer and her entering full-time residential care, her former asset would not need to be sold. I have actually done with with my own Mum, who also lives with my husband and I.

I strongly recommend that you and your Mum arrange to meet an independent financial advisor to discuss your IVA and the other matters. It seems sensible to take your Mum up on her offer - how much do you think you would need to raise?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Johndog]

House is valued at 120,000. My mother has an outstanding mortgage of 38,000 and a secured loan of 19,000. Estimated equity left therefore 60,000. I am an independent social worker with an annual nett income of 31,000(including pension) My original debt was £55,000. If we could arrange a joint mortgage what type of ammount are creditors likely to accept? Is the proposition feasible?

[MelanieGiles]

Hi Johndog

OK - so your Mum could potentially borrow up to 90% koan to value so that would give £108,000. Paying off her mortgage and secured loan leaves £51,000.

If your Mum wants to retain her ownership of the property, I would suggest she offers to lend you £20,000 to offer to your creditors within an IVA (more if you have debts with HSBC or Northern Rock). You will then need to ensure that you have sufficient surplus income to repay the additional borrowings.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Johndog]

Many thanks will look into it
Regards
Johndog