i am thinking of entering an iva as i have deb.ts of 50,000, i have joint ownership of a house with my ex partner, however my mortgage will be fully paid in 6 months time. how will this effect me as i will have a lot of equity.
Hi Mark, yes it may well have an impact. You will have to account for your share only. Are you thinking of entering a monthly payment IVA or are you considering releasing equity ?
If you want to contribute a monthly sum you will need a very carefully drafted bespoke IVA which is drafted specifically for you.
If you do not want to include any equity from your home you may have to compensate creditors for the loss of equity with higher monthly payments to make it up.
I recently successfully reduced a clients equity by £30k due to looking carefully at all the circumstances in the case and drawing on my background as a lawyer to apply Trust law to reduce the equity. What this means is the client paid less of his equity into the VA.
If you want to do an IVA based upon a lump sum from the equity then again you need a very carefully drafted IVA to ensure you retain some of the equity. Again, I would look at all the circumtances and draw on Trust law to see what your equity actually is.
I am happy to discuss this further with you and my details are on the bottom of my signature if you want some advice.
These days the equity in properties is dealt with via standard provisions which will require you to have the property valued during the final year, and an equity calculation carried out based on a loan to value ratio of no more rhan 85% loan to value. In your case that sum could technically be substantial, however as you are unlikely to be able to raise finance whilst in the IVA all you may have to do is to pay an extra year's contributions.
Individual circumstances will dictate what is appropriate in your case, but in my experience creditors are not greatly troubled by equity sums at present. How much equity do you feel that you currently have in the property at present?
Not necessarily - but this will depend upon your actual cicumstances and ability to offer contributions. I would see advice from an insolvency practitioner soonest, who can advise you specifically about all options which may be available to you.
