if i get a iva is my home at risk?

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Post by iana » Mon Jan 29, 2007 8:05 pm
if i get a iva is my home at risk?


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Post by jamesfalla » Mon Jan 29, 2007 8:14 pm
Part of the reason for undertaking an IVA is to protect your home. If you are a home owner and enter into an IVA, then your home will not be at risk as long as you meet the terms of the IVA agreement - ie keep up with the payment schedule.

However, if you are unable to maintain the agreed payments and your IVA fails, then you may be declared bankruptcy and your house will then certainly be at risk.

Remember, as part of your IVA agreement, you will normally have to commit to releasing equity from iyour house (usually in the 4th or 5th year). As such, entering into an IVA is a serious matter. Do not do it unless you are sure that you can maintain the agreed payments.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions, with extensive experience of solving personal debt problems over the past 10 years. I am regularly featured on BBC News, Finance Programs and Radio.

Visit my blog at: http://jamesfalla.blogs.iva.co.uk
James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk


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Post by neverending » Mon Jan 29, 2007 8:46 pm
Make sure that if you go down the IVA route that you fully understsand the implications and costs regarding the release of equity in the final year of your IVA.Many people who have posted on this site have entered the IVA without fully understanding the equity release.The company that arranges and administers your IVA will earn thousands from it so do not be afraid to ask questions and to ask for clarification.
Good luck
Andy Davie


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Post by MelanieGiles » Mon Jan 29, 2007 9:27 pm

When you have an asset, such as a property, and have incurred debts which you are unable to repay, your creditors have the right of recourse towards your assets in the event that you default on repayments. If you are currently insolvent, your house may well be at potential risk from the following actions:-

1 A charging order. This can be applied for by any unsecured creditor, which requires a Court Order. The effect of a charging order is that the creditor achieves secured rights over the property - and you may well have to make ongoing repayments or face possession proceedings against the property. The creditor will then be paid out of the sale proceeds.

2 Repossession by the mortgage company. This can only be done if you are more than three payments in arrears with your mortgage. As a mortgage company is a secured creditor, their rights are unaffected by either bankruptcy proceedings or an IVA. Your mortgage payments must therefore be the most important payment you make each month, as this keeps a roof over your family's head.

3 Bankruptcy proceedings. In the event that you are declared bankrupt, your assets will vest (be transferred) to a Trustee in bankruptcy, who will be allowed to sell them after the first 12 months.

As James rightly points out, an IVA will proect you from 1 and 3 above, but if you default on the IVA payments, then the equity in your property will then be up for grabs again.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk
Regards, Melanie Giles, Insolvency Practitioner
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