Do we sell the house to pay off debts and and rent or do we take out an IVA? Our house is old, at present needs about £4000 of quite urgent work and i would happily move but if we rent, we might not get back on the property ladder. If we take an IVA how will we do the necessary work on the house and deal with the future problems? We have equity on the house but once the debts are paid we will be left with about £20k.
Do you mean you could pay off your debts and still have 20k left over? If this is the case i know what i would do. If you are not that attached to the property and it needs work and you would happily move then i would get out. Do you feel it would sell in its current condition? I am nine months off finsihing my IVA and my property is in negative equity and i feel now after such a long hard slog that i wouldnt care if i had a property or not as long as i dont have debt, it makes me feel like a millionaire!!! You could alwasy sue your 20k to get a small buy to let property then at least you are still on the property ladder even if its not enough to buy a house for you to live in!
My advice would be to contact a few IVA providers for advice pertinent to your own circumstances. Try www.iva.com as a good starting point.
On the face of it it appears from what you have said that your debts could be cleared in full and you would be left with £20k of money...this ma be sufficient for you to put on a deposit on a smaller house, or go into rented and allow you to build up a bigger deposit to go back on the property ladder later....getting a mortgage after an IVA is viable and we do have a couple of experts who post on here that have been successful in helping people like me to gain a mortgage after an IVA. You could contact Ryan (his details are on the left under ask the experts) for some general advice too.
Hope this has helped and not confused you x
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
Thankyou for your reply. Yes, we would still have about £20k.It's an increasingly popular area and it will sell even with the work even though we'd have to drop the price to take it into account.I dislike the house as we're pumping money into it constantly but am worried about selling and leaving that ladder. The more i read about IVA the less appealing it seems-5 years no money and a house continuing to deteriorate. We have to do something quickly though as there's only so long you can go with little sleep!
Also bear in mind that it perhaps wouldn't be 5 years, as you obviously have a fair bit of equity, the creditors would want a proportion of that too and if you weren't able to release funds your iva could be extended for another year on top of the 5 years or you may be forced into taking out a secured loan with higher interest rates than your mortgage
You would only pay 100%of your debt plus IP fees. Whatever is left after the sale of the house would be for you to use as you wish. Talk it through with some experts and gain their opinion....an IVA is not easy and does require patience and new skills of budgeting...but in your case it might be less than five years as you may be able to offer a full and final straightaway on the back of your house sale.
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
If we do put our house on the market what are the chances of creditors suspending payments until it is sold. bearing in mind they could then be paid it full at that point. Just wondering if anyone has tried it and succeeded. Thanks
Creditors will normally allow at least a year for the property to sell and realistically 2 years is not a problem. This could allow you to do some work yourself and possibly achieve a higher price,leaving more for you to use to start again.
You would be able to get a mortgage in the future and the higher the deposit the better.
An iva should pretty much be a last resort and not taken on just for the sake of it. Your credit rating is ruined for 6 years and living on a budget for 5 years plus is far from easy.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
After a lot of visits to this forum, and talking to someone from credit advice agency we have decided to sell the house,pay off all debts, put the equity from the house ( and now we think it's more like £35) insome sort of savings account, rent in the area and in a few years time ( hoping mmarket crashes!!) buy something. I don't aspire to a big house, i'd prefer one that just needs a coat of paint every now and again rather than major repairs caused by some cowboy builder not doing their job properly. My kids know why we are making these decisions and,as i go through the process of painting my whole house white, i feel increasingly happy knowing we will have no debts in future. but that we have also become more financially aware. Shame we hadn't been like that years ago!!
Selling the house to clear existing debt then rent was my plan 7 years ago. My NatWest advisor said no! no! property is everything, re-mortgage the house and pay off the debts that way. The higher repayments crippled us and we ended up in an IVA within 12 months anyway!
Personally I think you have made the right decision. We sold our house and entered an IVA clearing both unsecured and secured debt...for us it was the right thing to do and despite having had 4 years in rented accomodation it was definitely the right decision for us ....we are far happier in our mortgaged home now safe in the knowledge we have a 50% mortgage and no other debts......good luck x
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
