Hi, I'm very new to this so i'm afraid i don't understand how things work. I have got over my head with personal loans and need a solution. My debts are all in my name. I live with my partner though and the mortgage is in joint names. Does an IVA take her circumstances into consideration or would it be purely for myself? Also, i see that we may need to free up capital in the house. How does this work if the house is in joint names?
If your partner has no debts of her own, then she will not need an IVA, but if you live together as a couple your creditors will probably expect her to include her share of the family disposable income to your creditors.
She will also need to agree to your remortgaging the property during the final year to offer your share of any equity - subject to an 85% loan to value threshold.
Hi and welcome to the form.
An IVA will take your joint income and expenditure into consideration but your partner will not be part of the IVA.
You will be asked to free up YOUR share of any equity, so for example if the house was worth 150k with a mortgage of 100k you would be asked to release 10k [80% loan to value would be 120k,so you could release 20k of equity, your share of this would be 10k].Any remortgage would come down to affordability.
Regards
Thanks for your help. How much will the creditors expect the 2 of us to live on? At the moment we have no equity in the home as we have a 100% mortgage. Would this be a route they would be likely to follow?
Creditors generally use set industry guidelines prepared by the Consumer Credit Counselling Service to determine an appropriate level of expenditure.
I can send you a copy if you e-mail me at my website - but at the end of the day your allowances should be based on the actual level of expenditure you incur within reason.
One last question. I was lent some money by my parents to help out but it's not going to help. I'm keen to pay this back to them before i start the IVA (i shouldn't have borrowed it in the first place). How will the creditors view this action?
I would be happy to help you if I can. How long ago did you borrow the money from your creditors, and do you still have the amount they gave you, or would you be wanting to use other sources of money to pay them back?
They have all been in the last 18 months. I've been on a spiral where i've borrowed to clear borrowing but nothing ever gets any better. I still have the money they lent me. I was going to use it but realise that it would be a drop in the ocean so wouldn't help. No further borrowing would be needed.
If you are holding the money they gave you, I do not see why this should not be returned if you have recognised that the amount is insufficient - but it might be sufficient to offer by way of an IVA or DMP so I would take expert advice before you do anything.
