benefits and IVA

[ladyc]

Hi, at the moment I am just into a DMP. Between my husband and myself we owe £83000 and rising with interest still being put on. At present we are paying £254 into an IVA through Payplan, monthly.
Between us we both receive occupational pension, Incapacity Benefit, a small amount of Pension credit and DLA.
We are only putting £40 per month of the DLA into the pot. The rest is used for care. We are prepared to reduce the care and pay around £400 into an IVA if this is possible. We would be prepared to extend the IVA to 6 years if neccessary.
We own our property which is a bungalow that is suitable for us. We have around £70000 to £80000 equity in the property but do not want to have to sell it as we are too old and disabled to make a fresh start. Also we do not want to go into Local Authority Temporary housing.
Can anyone advise us? Do you think an IVA would Succeed?
HELP!!!!!

[Adam Davies]

Hi
Can you just clarify
Are one of you in an IVA and the other a DMP ?

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[ladyc]

We are both on a joint DMP.

[MelanieGiles]

You are in a fairly difficult position, in that you are party to a neverending DMP which will last for a long time. An IVA would not really work either, given that your only income is from pensions and benefits, but I can see the need to retain your property.

Although I know that they have had a really bad name since they were originally introduced, have you looked into equity release schemes which would provide you with a lump sum to offer to creditors (in which case an IVA could work) and allow you a lifetime tenancy. I am not an expert in these schemes, but one of the mortgage brokers might be able to assist.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Skippy]

When my dad died the only way my mum could afford to stay in her home was to release money through one of the equity release schemes. My uncle, who is very good with money (unlike his niece!) looked into them for her, and the one she chose allowed her to have a lump sum payment, and when she dies and the house is sold, the company will get half of the proceeds, the other half coming to me.

I would say it's definitely worth looking into, but make sure you take advice before signing up to anything as I have heard of instances where the company charges interest and there isn't enough money with the sale of the house to cover the charges.

It made a big difference to my mum's life, as she could stay in the house she lived in for 45 years with my dad and she could keep her animals, which was important to her.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[ladyc]

I was thinking of approaching a family member to lend us £10-15000 and leave them a sum in our will to repay them. I'm sure they would agree. Do you think this would make an IVA possible?

[MelanieGiles]

Not for the level of debt that you currently have, coupled with the equity you have in your property.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[ladyc]

Hi Melanie, Thank you for your advice.
Can you tell me how much I would have to find to get them to accept an IVA.
How can I get the debt reduced to 33% or 50% as some claim can be done ?

[MelanieGiles]

The dividends payable in IVAs are based upon the individual circumstances of each case. In your case you have equity of £80k and debts of £83k - so if you were to sell your house you could almost pay everyone off.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[ladyc]

Hi Melanie,
I was under the impression that only 85% of the property equity could be taken. Is that wrong?
What if I was able to raise a Mortgage for some money. Do you think the creditors would take a fairly substanstial reduction to eliminate the debt or will they go for the throat and take our home?

[ladyc]

I don't understand why they would take our home when we are offering to pay a reduced amount but pay never the less.
Surely others who have IVA's, or debts must own property. If people are younger and healthier they would have the chance to start again.
We are in this predicament due to illness/disability only to find there is no way out for us. I don't understand at all.

[MelanieGiles]

When you are insolvent, the assets you have are entirely at risk from the creditors you owe - and there is no 85% limit. It may be possible for you put an offer in front of creditors, but even if you were to mortgage your property to 85% LTV, are you sure that you would be able to manage the mortgage repayments?

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[ladyc]

I don't really understand why an IVA isn't possible because our income is made up of occupational pensions and benefits. Surely this money is more guaranted and more likey to succeed? Can you enlighten me on this.

[MelanieGiles]

It is because creditors don't like accepting IVAs which are based solely on pension and benefit income. Sorry we don't make the rules, the creditors do. And your main problem is the level of equity you have in your property.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[ladyc]

I still don't understand that they'd be happy to take our home/possesions but not happy to take our money.