Could we use the IVA system for a year

[Drowning Fast]

We owe £60k and have decided to put our restoration project in France up for sale. If we get the money we have asked for we could virtually clear our debts, but obviously we don't know how long it could take and in the meantime we will not be able to meet minimum requirements. Could we use the IVA system for a year until we could pay it off?



Warnz

[MelanieGiles]

Hi Drowning and a Happy New Year. Welcome to the forum

If you were to agree to sell your property, and use the sale proceeds to make an offer to creditors, then this could work via a one year based IVA on the basis of a full and final settlement.

I do a lot of these types of proposal, and they are popular with creditors as they get paid much quicker than if they had to wait for the money to be paid over a five year period. How much do you owe to creditors, and remember there will be capital gains tax to pay assuming that this is not your principle residence, if you make any profit on the sale.

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

[Drowning Fast]

We were going to put the property for sale this week but hadn't thought about capital gains tax. One other problem may be if we defaulted on the mortgage in France as I believe their laws mean that they can take the property off you and I am not sure whether you get the equity or not or whether they sell it to just get their mortgage back. I know they are very hot on payments there. We have a mortgage on the property (currently owe 50,000 Euros which we had not included in the 60k, which was based on UK loans/credit cards). We estimate that we can sell it for 150k-170k Euros, although we are not sure what the market is like currently. If creditors were prepared to allow the mortgage payments until sold this would help but would they do this?
Does anyone have any experience of French law?

Warnz

[MelanieGiles]

I know a little French law as I have a number of clients resident in France. Is the mortgage with a French bank? If so, you will need to check the terms of the mortgage deed carefully to see what happens when you default on payments. If there was a residual amount left after the mortgage was paid off, then this would rightly be returnable to you. Are you in default with any payments yet? And would you be able to keep up the mortgage payments until the property did sell?

Also where are you living now? Do you own another property in the UK?

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

[Drowning Fast]

The mortgage is with a French bank. We are not in default with payments in France or in the UK yet. It is only from this month that we will have problems because of my husband's drop in salary of over £1k per month. If we could sell quickly we do have funds in the French bank for a couple of months payments. We own a property in the UK but have little equity, probably only around £5k at the most. The French property was designed as our dream retirement home in 12 years time, although that is now shattered. Rather than increase pension payments we had planned to do a Grand Designs on the property. We also hold our UK mortgage with the Woolwich and bank with Barclays, so will that also be a further complication. Nothing seems straightforward.

Warnz

[MelanieGiles]

Don't despair of getting back up there! If you do a one year full and final settlement IVA you then have another 11 years to build up to retirement again - many couples do!

There ought to be no complicaton with your mortgage in the UK, however if you have any debts to Barclays you would be wise to open up a new bank account before proceeding with an IVA.

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

[Martin2011]

Hi Warnz,

as ever, great advice here from Melanie, you've made a lucky find.... I just wanted to echo Melanies sentiments about not giving up on the dream... may all seem a little bleak now, but the future's not written and good dreams survive the bad times.... I'm a total fan of 'Grand Designs' and share the dream that one day I'll be able to procede with a self build..... best of luck getting sorted now and with making your future dreams a reality further down the line.

Martin

[Drowning Fast]

Thanks for your comments. Hope to proceed now and get our life back on track. One of the worst things is you wonder how the hell you managed to get in this state. I have to say that mortgage increases, food and fuel costs over the past few months seem to have just about put the nail in the coffin, so to speak. I feel embarrassed and depressed that I got to this stage without realising it. Just have to accept this and get out of it now. This all came about because we were on our 2nd marriage and wanted to catch up on 20 years in 10!! Still, hindsight vision is such a wonderful thing. This site is the best thing I found. There are lots of IVA companies, but this site provides an insight in to other people's current problems which is much better than reading small quotes.

Warnz