iva and mortgages

[141006]

My husband is lookng in to getting an IVA, this will be for five yrs, after that period were told, if the debt isn't payed off it will be cleared. Is this true.
If so, where would that leave us in terms of getting a mortgage after the 5 yrs.

Could he get a mortgage whilst he's paying off the IVA.

My mum think's this is a really bad idea, and say's it will have a long lasting affect on our credit history for many yrs to come. Is this the case.

Would really appreciate some feed back on the above.

Many thank's.

[Oliver]

If your Husband is Insolvent (owes more unsecured debt than he has assets to sell or can not afford to live and pay his contractual unsecured debt repayments) then he will need to seek a debt solution of which an IVA is one possible.

In an IVA you pay as much as you can to your creditor for a defined period, usually 60 months. After this point any remaining debt will be legally written off.

A mortgage can usually be obtained post IVA through the help of a specialist broker.

Taking a mortgagen out during the IVA is slightly more complicated and you would have to source the deposit for the mortgage from a third party and look to pay no more on your new mortgage than you pay for your current rental so as to no effect your ability to maintain your agreed IVA payment.

[size5]

Further to that, the point I would make is that if taking credit has resulted in a situation where your husband may need professional help to sort it out, then in reality credit rating should be very low on the list of priorities.

In effect, NOT doing something in the circumstances that you describe will be far more painful in the long run than getting professional help.

Regards.

[141006]

Thank's for the promt reply's.
You say you can usually obtain a mortgage post IVA. On what circumstances couldn't you.

The reason for his poor credit rating is because when we switched banks there was a problem with transfering a direct debit, which we were not made aware of until it was too late. Because of this we were late with payments, and the situation has snow balled out of control. It is mainly the banks fault, but how easy would it be to prove this.

But just one question remains, will the IVA have a long lasting effect on his credit rating, (so preventing getting a mortgage, credit card etc).

Thanks guy's some helpful information anyway.

xx

[Viki.W]

Welcome to the forum, you're in the right place for good advice. It may help if you post a few more details, has your husband approached an Insolvency Practitioner who has recommended an IVA? You need to know all the options before you proceed with anything. How much are the debts and to who? His credit rating will be pretty bad for six years from the date of the creditors meeting IF he decides to do an IVA but as I said there are other options so if you post some more details, the experts might be able to help. Good luck, Viki X

[141006]

Money expert contacted him and suggested the IVA. The money is owed to the bank and credit card company, combined total of £18000.
Do you mean it would be 6 yrs after the IVA is paid, or 6yrs from the point of taking the IVA.

Many thanks

xx

[Viki.W]

Could you post how many creditors he owes to, is it just two?

I've never heard of Money Expert but perhaps one of the experts have and can help you, I had a little look on www.iva.com but they aren't listed there so maybe they refer you to an IP.

Personally I would contact Melanie Giles who regularly posts on here, you can get her details from the Meet the Experts page. Your husband needs to know all of his options as his debt is relatively low. Initial telephone call will cost nothing but may help.

To answer your question re his credit history, it will be affected for 6 years from the date of the creditors meeting if he does an IVA and if it is approved.

Get your husband to give Melanie a call to go over his situation, I'm not saying you shouldn't stay with the company you have contacted but it doesn't hurt to get a second opinion.

I'm not an expert so this is just my personal opinion.

Let us know what happens, good luck, Viki X

[141006]

It is 2 creditors, £4000 to the credit cards and £14000 to the bank.

It's moneyexpert, one word, just looked it up on an e-mail they had sent us.

Thank's for your help, really useful.

What ever we do i'll let youy know.

xx

[Viki.W]

As far as I know, you can only propose an IVA if you have three or more creditors or two creditors with three lines of credit, please try and get a second opinion. Good luck, Viki X

[Andrew Graveson]

Viki makes a really good point about the number of creditors. Do either of the creditors hold more than one account for your husband? Who are the creditors?

On credit records & mortgages:

The IVA will show on a credit record for six years from the start of the IVA. This represents a significant factor for mortgage lenders but has to be seen within the context of many other variables. For example incomes, affordability, the loan-to-value required against the property etc are also extremely important to how a lender will judge a mortgage application.

There are mortgages available to those in IVA's but there has been a significant reduction in the choice of loans since the "credit crunch". In some circumstances this has reduced availability, in other circumstances this has increased the rates payable.

Whether a mortgage is/would be available to your husband, and the rate that he might pay, is therefore subject to his unique personal circumstances and the state of the mortgage market at the time of application.

A mortgage broker specialising in this area would be able to provide advice following an extensive factfinding excercise so that he or she fully understood the unique personal circumstances.

[141006]

Yes 2 credit cards, different names, but apparently the same company, tesco and mint.
Then the loan to the bank.

Thanks.

x

[Andrew Graveson]

Hello,

Which bank is the loan held with?

[141006]

Natwest bank

[Viki.W]

I think they are all linked in which case you couldn't propose an IVA, It may be better if you approach your bank to ask for help, they could organise a payment plan for you. Please wait for an expert to advise you further. Viki X

[141006]

Unfortunately it was the bank that got us in this situation. They didn't transfer our direct debit to our new bank, but failed to tell us this. We were blissfully unaware the loan hadn't been paid until a letter came through the post about 4 months later.

Since then there has been problem after problem with natwest bank, too much to write, but it all look's as if were at fault, hence the bad credit rating and the barrage of phone calls from what i can only assume are legal, i use the term lightly, loan sharks.

His credit rating is beyond repair, so were told, until the loan is paid.

Thanks for all your help though, it has certainly made me re think our options.

xx