Can an IVA be put into place for secured debts

[paul.wt]

Following redundancy I have taken up a new job with a much smaller salary. I am struggling to maintain my current commitments. I have been made aware an IVA (if accepted) could help with my unsecured debt but my biggest outgoings are secured on my property. Can an IVA be put into place for secured debts. Regards Paul

[Andrew Graveson]

Hi Paul,

I'm sorry to say that an IVA applies only to unsecured debts.

Posting some more information/detail might help the site community to suggest other ideas.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[MelanieGiles]

Do you have equity in the property? If so, perhaps it might be worth looking at remortgaging to see if you could reduce the monthly payments.

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

[iva experts]

Hello Paul,

As mentioned above an IVA is to only include your unsecured debts, could you provide some more information as to whether you have a property with equity?


Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

[paul.wt]

Many thanks for your responses. Unfortunately the secured debt exceeds the current value of the property. It is beginning to feel a very desperate situation. My first lender has switched our mortgage to interest only which will ease the situation but our total income falls short of our total outgoings by around £400 per month. We both word and would give anything for a solution. If anybody has come across a similar situation and knows if there is anything we can do we would be very grateful to here from you. Thanks Paul

[MelanieGiles]

Is it worth thinking about moving out of your current property and finding cheaper rented accomodation?

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

[paul.wt]

Yes we would consider moving out and taking on cheaper rented accomadation but I do not know if we are allowed to sell given the negative equity. Our first mortgage is for £140,000 (£130,000 secured, £10,000 unsecured) and the second lender has around £55,000. The property is in good condition but a realistic selling price would be around £165,000. Can the lenders stop us from selling?

[MelanieGiles]

They can refuse to release their charge at HM Land Registry if you find a buyer, but this is all rather counter-productive as their debt will just continue to increase. Secured loan companies are renowned for being inflexible in this area at the moment.

The best thing to do is talk to your mortgage company and explain that you can no longer afford to live in the property and wish to volunteer the keys back. Tell them about the other secured lender, and then the two of them can slug it out whilst you find yourself some cheaper accomodation.

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

[paul.wt]

If we volunteer the keys back is this the same as repossion? I would find this a humiliating experience. Is there not a more amicable way to resolve that would mean we retain some dignity?

[MelanieGiles]

No - it is voluntary surrendering the asset to the lender on the basis of unaffordability. But when it comes to retaining dignity, you sometimes need to let the head rule the heart and decide exactly where you want to be, and how best you can get there in terms of dealing with your debt.

You are very highly geared in terms of your secured lending, and are now unable to meet your unsecured creditor repayments. This situation will only get worse unless you do something proactive to change things. The first step I would have thought is sensible, is to research the local rental market to see what you would have to pay for a rented propety, and then see how this would affect your finances.

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

[paul.wt]

Thanks Melainie, your advice is most appreciated. I will begin to research rented options then take things from there.