iva and shared ownership property

[michelle.b]

My husband and I have 25% equity in a shared ownership property through a housing association. We are in the process of splitting up and I will be remaining in the property until my eldest son turns 18 (5 years) and we then intend to sell it. Between us we have nearly 50K of debt which we are borrowing Peter to pay Paul, we have looked into an IVA and as we both work although on low incomes we thought this could be an option for us. Would this be possible to do as I heard that sometimes your IVA expects you to release equity but I am not sure we are allowed to do so from the Abbey. Also what are the average arrangements is it 30p in the £ of what you owe?

[size5]

Hello and welcome to the forum michelle.b

I am sorry to hear of your plight, but unfortunately cannot advise on specifics without further info. One way or another there will be something that can be done, but as each situation varies it is important that you speak directly to a professional.

You can visit www.iva.com and have a look round there, there are reviews and info you can read. I suggest that you speak to 2 or 3 providers before you make any decision, it is important that ALL options are outlined to you so that you can go from there.

Hope this helps.

Regards.

[luluj]

I am sure you can apply for an IVA but the equity release part may be difficult and therefore the length of your IVA or conditions may be different -have you worked out your disposable income against your expenditure and does this leave you with £250 ish to pay into your IVA ?

[size5]

Further to the answer I gave earlier.

The reason I have advised you to speak to someone directly is that you CAN look at an IVA but there are so many imponderables here that you really do need to sit down and look at this very carefully.

For example, there is the question of equity release and the shared ownership factor as lulu points out. Also to be considered; Are any of the debts joint? If you are splitting up, what, if any, financial arrangements have been made re for example maintenance.

There are other factors as well of course, so professional advice at this point will at least give you an idea of what the short and long term options are for you.

Regards.

[michelle.b]

Thanks for the info, we have a joint bank loan and loan in individual names and credit cards in individual names our individual without including the joint debts exceed £15K each which is why we thought IVA could work, otherwise not sure which way we will go. The mortgage is in both our names and as mentioned we only own 25% of a house worth approx £175,000 and mortgage outstanding of £22,000. My husband is moving out and will have outgoings and we have come to an arrangement already on maintenance and he has agreed for me to remain in the house until our youngest child who is 14 leaves final education. Without us both having to pay the current outgoings and with additional childs tax credits etc. I have found out I will receive I should have about £200 spare and my husband a little more. I plan on going to the citizens advise bureau taking all my paperwork with me as I believe they may be able to give me some information on housing benefit as I have to pay rent to the housing association for the property also. I only work from 9 till 3 every day so my income is fairly low but I want to be able to pay back some of my debts not walk away from them and declare myself bankrupt which some people have suggested! Thank you for your help, advise..... etc!

[Soulgrowth]

Hi Michelle ... I'm not and expert here but I just wanted to say good luck. This seems to be a period of great change for you and I am sure that you will find a solution to your debt situation that will allow you to have a fresh start in life.

Debbie

[MelanieGiles]

Michelle

The key to this will be firstly resettling yourself and your husband into your separate lives, and then working out what you can afford to offer each month. Given the amount of change you are currently going throughm with a young child, it is not the right time to be thinking of committing to a fairly rigid repayment plan.

My advice, for what it is worth, would be to consider a short-term DMP until you settle down and then really decide whether an IVA is viable. This ought to remove the immediate presssue from creditors, and allow you to pay an affordable level of repayment. At that stage you should seek the advice of an insolvency practitioner who can discuss all of your options with you.

May I take the opportunity of recommending Andrew Graveson of Brightoak to you, who is a DMP specialist and enjoys a good reputation in this line of work. You can find his details on the experts page.

[Andrew Graveson]

Equity release on shared ownership properties is very difficult and especially so where it's for the purposes of dealing with debt.

The Housing Association will not allow any capital raising remortgage that might threaten their asset. In a declining property market that unfortunately means an almost certain "no".

Of course that would be a long way down the line and circumstances in the property market may well have changed by then.