caught by the negative aspect of buy to let

[owen]

Hello,
I have been caught by the negative aspect of buy to let and have had the house on the market for nearly 2 years. My personal debt is crippling but the house is half in my brothers name. How will this affect him if I go for IVA?

kind regards

[MelanieGiles]

Hi Owen and welcome to the forum

If you are attempting to sell the property, the IVA can be based on this occuring at some time during the five year payment period, at which time you can pay over your share of the sale proceeds into the IVA.

In the unlikely event that the property does not sell within this timeframe, creditors will expect you to raise equity on the property during the finaly year to be based upon additional borrowings of 85% loan to value, that money initially being used to pay off any existing mortgage with your share of the balance of proceeds being paid into the IVA for the benefit of creditors. In which case your brother will have to agree to this.

[owen]

Hi Melanie,
thank you for your prompt reply. My story is that I was doing well with freelance work. The banks gave me 'platinum lending' and due to my income a 'personal' banker and she was able to give me a 20k creditcard and a 10k overdraft. Last July the work dried up and 2 properties I own with my brother went unrented. I sold my own home at this time. The 2 co-owned properties have been on the market forever and one recently sold (under my brothers name) for negative equity (8k). The other is also for sale and may net me 5-10k if it ever sells. I have since buried my head in the sand and have been able to 'borrow' from family at 2k per month. I am behind with 1 loan and 2 creditcards as I finally opened 3 months worth of mail yesterday. My 'nerves' are now shot but if I clear this debt or make a manageable payment I feel I may be able to return to work. I am trying to pay off Council Tax first. I will also tally my debt and write you with more specifics. My gravest concern was that an IVA would mean the house half in my brothers name would be repossessed and sold at a loss. I welcome further advice and will write with my exact debt later. Again thank you for your prompt reply.

kind regards


Richard.

[MelanieGiles]

Put the properties to one side for now Richard, and concentrate on the affordability of making an offer of ongoing payment to your creditors. You interest in your jointly owned property could always be dealt with by making some addiitonal payments, so anything is possible in the world of IVAs!

[owen]

Hi Melanie,
I have filled in your form. My phone is cut off at present but hope to get this moving. I will also have to move out soon. Having just opened 3 months mail - do I call these people or let you take over?

Richard.

[jpj]

Hi Owen

Im not sure you will be able to get an IVA until you return to employment, but im sure Melanie will advise you further.

[MelanieGiles]

Yes jpj is correct. If you have no income at present it is unlikely that an IVA is the appropriate solution as you will not be able to afford to make ongoing payments.

[owen]

Hi there,
does this mean I am caught in a double vicious cycle. The stress of this has caused me to hibernate and hide. I feel if it was in oprder I could return to work. Even the last 48 hours since contacting you has seemed easier. My parents have agreed to make the payments until I am back on my feet. I await your advice. Thank you thus far.

[MelanieGiles]

We have been trying to get hold of you today, and I think that Tina has left you a message. Probably best to discuss this directly for now.

[owen]

Thank you I will call tomorrow.