can only afford to do IVA for one of us at a time

[jc4]

My husband and I have combined debts of £123000-00 but can only afford to do an IVA for one of us at a time. I would have to stay on a debt management plan until his IVA was over. I've been told that I could use my share of the equity on our house to do a lump sum IVA when my husband's is finished, but would I still have to make monthly payments aswell? As we'd have to remortgage to release the equity, we wouldn't be able to afford for me to make payments for five years. We are currently with Payplan who have given us this advice My husband would like to know if at the end of his, the equity is all they can take, or would we have to sell household items to pay them aswell?

Also, if we managed to save anything during the IVA ( unlikely) would we have to hand that over aswell? I'd be really grateful for your help as I think we need to be deciding what we are going to do very soon.

[MelanieGiles]

Hi jc4

I don't see why an IVA for both of you will be any more expensive than individual arrangements. How much equity do you have in your property now, and what is the level of your debts. Could you also confirm the value of your property.

The advice you have been given seems a little odd, so could you also confirm the following.

1 Summary of your debts
2 Summary of your husband's debts
3 Amount you are paying per month to DMP

With that level of debt, an IVA ought to be a far better option for you than an ongoing DMP.

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

[aguise]

Hi there jc4
Just to let you know my husband and I have what some class as a joint iva (seperate but just one payment) I would have thought it would be more expensive to carry on with a dmp and an iva. Our debts together were 52000 and we pay 442 which is 32 pence in the pound.

All the best

Ang

[jc4]

Hi, thanks to all who replied. Sorry I haven't been able to get back until now. Ok, my husband's debts total £74500-00 and mine total £43800-00. We are just starting a debt management plan with Payplan paying a monthly sum of £173-00. We have a £80000-00 mortgage for which we pay £645-00 per month and there is about £20000-00 of equity. I am not employed and my only income is £66-00 per month disability living allowance but this is not included on the income sheet we gave to Payplan as they told me it need not be declared. However, they have told us that the only way we could do a joint IVA would be if we could afford £300-00 per month and we cannot afford that amount. They said the only way we could do it would be for my husband to do his first and at the outset would promise to pay the creditors 75% of his share of the equity at the end of the fourth year then my share of the equity would be used to do a lump sum IVA for my creditors. While my husband was doing his IVA I would have to stay on the Debt management plan and it would then be neccessary to declare my disability living allowance as my husband would have to pay £150-00 per month for his IVA. To release the equity would mean either remortgaging or selling the house. My husband is 50 and I am 48 so you can see that we don't even have the option of extending the length of mortgage. We do not wish to go bankrupt so it looks as though debt management is our only option, although I would imagine we will both have passed away long before the debts are finished. If I could fet a job I would but I am partially sighted and this makes working difficult. We have been very stupid over the years and wish we had never set eyes on a credit card.

[tracy.h]

Hi jc4
I really do sympathise with your situation,but to be honest it seems that this situation is alittle extreme,as you say there doesnt seem to be an end to it im sure one of the experts will give you some professional advice,i just hope that things work out for you.
goodluck

[MelanieGiles]

I am not sure that you have been appropriately advised here - and the DMP arrangements you are in will mean you will be paying those debts for the rest of your lives which is not sensible.

First of all you should calculate your disposable income to see what you can afford to pay each month. Is £300 affordable? If so, then I would consider IVAs for both of you based upon five years of repayments at that level, with a back-end equity raise of £20,000. At the moment this would absorb all of your equity, so you will be gambling on property prices increasing over the five years, which is highly likely.

Given your ages, you do need to see and end point to these debts, and this is definately not found within the existing DMP agreements. Can you post what you feel you could afford to jointly pay into IVAs and I can advise further.

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

[jc4]

Thanks for the reply Melanie. We really couldn't afford £300 per month, the most we could afford is about £240 per month if we included my disability living allowance. I have tried to claim other benefits due to being partially sighted but this is all I am entitled to. We are in a no win situation I'm afraid.

[jc4]

Sorry, I meant to ask, if my husband did an IVA on his own, would my creditors still be able to have a charging order put in place. From what I've been told by Payplan, i have one of the worst companies for doing this, namely Nationwide.

[MelanieGiles]

Nationwide are no more likely to do this than any other creditor, and they will not seek an order if you are making efforts to repay your debts.

The problem with your current debt repayment plan is that you will never stop paying into it - and you are not even covering the accruing interest so your debts are probably increasing each month.

Are there any friends or family who could step in to provide say £12,000 to save your house if you were to go bankrupt? You would be able to repay the debt - thus making good use of your £175, and be debt free in six years time.

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

[jc4]

I really wish I knew someone who would be able to provide money to help us keep the house if we went bankrupt- I would do it as soon as possible, but sadly, none of our family are that well off. We did consider selling the house to one of these companies who buy your house then rent it back to you, but we really don't know what to do. People talk about light at the end of the tunnel, but I can't see it.

[Adam Davies]

Hi Jc4
I think that you need a second opinion regarding the way forward for you both.To have a DMP with no chance of completing it is not what you need.Speak to a couple of companies on this site as they can give you expert advice at no cost.
Good luck and please keep posting
Regards




Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[thebear29uk]

Hi Jc4

Your mortgage payment seems high. £645 on £80k. You should contact WelshBoy who posts on here. His real name is Tony Parsons 07970 438874. I imagine you are on a repayment mortgage but by changing it to interest only on a fixed term your repayments could drop significantly thus giving you the required amount for an IVA.
Just as an example I'm looking at repayments of £590 approx on a mortgage of £117k.
Obviously this will depend on whether you are tied in and have redemption fees but its a possible solution to give you more disposable income and make an IVA viable.

Regards

Dave

[jc4]

Sorry, haven't been online for a couple of days-let me explain our mortgage- in 2004 we took a £30000 secured loan and had a £30000 mortgage which together per month was costing £760 per month. Last year we changed mortgage provider and asked them to take on the loan, lend us more money and extend the mortgage to be paid over fifteen years. This is why it now costs £645 per month, this is a five year fixed rate repayment mortgage. We used to have an endowment mortgage but with all the carryon about shortfalls, we cashed in the endowment policy and changed to repayment mortgage. I dont really think anyone would take us on for any type of mortgage at the moment as ude to commencing a debt management plan, our credit rating will be non-existent. I can't see how if we decided to do an IVA that anyone would lend us the extra money for the equity anyway, I really think we are stuck on debt management for the rest of our lives. Could anyone tell me, if my husband did an IVA and during it was made redundant, would he be expected to hand over any redundancy payment he received? We are still confused on what to do, we talk about it over and over again but there are always doubts as to the right way to go.

[admin]

hi test 1213