IVA no longer an option

[go_4_broke]

Hi Dee

It's probably not what you are thinking about right now but it is worth having an eye out for the longer term future.

If you walk away the most likely outcome is that the house will be repossessed by the mortgage company. By the time it's all done and dusted there is unlikely to be enough equity to interest the OR for the reasons Paul mentions above.

It will then be on your record that you had a house repossessed and this won't help you should you be looking at a mortgage in the future.

However I think you can have your cake and eat it. If it was me I would not pay out any more on the house and use the money to get the rental property as you propose. Then get the house on the market ASAP and take any halfway decent offer that covers the costs (which will be rising all the time). If a small amount is left over and its just used for 'general expenses' it is unlikley to interest the OR. If it's a bigger amount and you use it to pay back anything you've borrowed from family that's not such a good idea, it probably ought to go into the bankruptcy.

With luck you can get clear of the property before you declare and that will make the process much simpler in itself and you will no have the repossession on your record. If it all goes wrong, about the worst that can happen is that the property will be repossessed and and shortfall debt on sale will go into the bankruptcy.

Best Regards. Simon

[Reviva UK]

If you have decided to go forward with Br I would be happy to talk you through the processes if you like:-

The house
court procedures
court paperwork
the official receiver
the bank account
the NT tax code change
the six month i/e review
the discharge certificate & lodging with credit reference agencies
etc

You need to remember that you are not abandoning the house - it used to be your home but it stopped being a home when it became a burden. Your new home will be a wonderful place because for one thing it will without stress.

I was in court today helping a lovely couple through the bankruptcy process( and again tomorrow with a different couple ). After the bankruptcy clerk bit we went into a nice "posh" hotel and had a few coffee's and discussed how they were going to enjoy the rest of the life given this second chance.

I have already had one call from them tonight to ask " Was that it" .

it will not be as bad as you think.

[Reviva UK]

hi go for broke

whuch part of the country are you in?

[go_4_broke]

Hi Paul

I'm in Oxfordshire, not far from Oxford itself.

Best Regards, Simon

[Dee]

Thanks for that can I just clarify are you saying it would be better to move out of the property before declaring bankruptcy?

We wouldn't need to pay family back they would gift us the money.

Thanks for your offer to assist Paul I would very much appreciate it as you said previously one step at a time.

I have opened a new bank account, requested the paperwork from the court and the money would be in place for rental and bankruptcy just still not clear what to do next there are so many variations on what I should do and I am cautious about making and misjudgemnts but I am quite keen for my kids sake to get settled into a new HOME.

[go_4_broke]

Hi Dee

What matters is not so much whether you live in the property but that you don't own it. If you have managed to sell it before going bankrupt, and have no other significant assets it shouldn't be necessary to appoint a trustee and you will have a simpler form of bankruptcy, which makes life a bit easier.

Best Regards. Simon

[Dee]

Ok I understand. How long do you think I could put off the Bankruptcy bearing in mind I have paid nothing to my creditors for 3 months now and they are under the impression that I am gathering documents to propose an IVA which was our original intention.

I think when I approach the agent we are looking to rent with I will ask them their advice on getting a quick sale.

How many months in arrears will mort lenders wait before persuing reposession orders? And should we inform then that we have the house on the market and are looking to redeem the mortgage?

Thanks for your time.

Dee

[Dee]

PS is an IPA or IPO always sought?

[MelanieGiles]

Generally if your disposable income is higher than £80 you will be required to make contributions over a three year period.

[kb.m]

Hi

I am new here but I do know a bit about the lenders and repossesion. we managed to keep up our mortgage payments and secured loans for 18 months after the IVA was granted. We then told the lenders and reached an agreement - but it wasn't realsitic for them in all fairness. This lasted for six months and the court hearing is due in April.

We put the house on the market after 3 months of the arrangement and luckily got a buyer quite quickly - your solicitor for the sale can send them proof/an exchange date, which can put of the repossession hearing for a few weeks if you are confident of sale.

The mortgage company tell me they are allowed to telephone you up to five times a day during this process - on Sundays too. As it seems to be a computerised system they certainly did as well ! That is the more distressing part and if you need to sell then please be aware that only completion will stop the harrassment if you have not kept up your payments.

My worst converstaion was when the six year old girl on the end of the phone at Halifax ( I kid you not, she couldn't have been any older !!) asked me why I couldn't just borrow £5000 to pay my arrears from my family. Meanwhile, back on earth......

I have already borrowed from my family and cannot afford to pay it back to any extent whilst I have the IVA. And anyway, its not their mess and I do have some pride and shame.

[go_4_broke]

Dee,

Put it this way - I got away with it for at least three years. It depends to a certain extent on how much effort you are prepared to expend on dealing with your creditors.

Ironically one of the best ways to keep them at bay is to make token payments - which I know you have been advised not to do but if you want to buy more time it can be an option. Even without that you could probably keep it going for several months, you will just get increasingly heated bothering. The warning sign is when one of them actually tries to slap a CCJ on you, at that point you need to take action really.

I would guess you may have around 6 months before the lender goes for a repossession, but will depend on many factors not least your particular lenders policies. Getting a 'For Sale' sign up will certainly help to calm them down, definitely tell them you are selling.

As kb says above, the lenders may well hassle you but you don't have to speak to them and it really won't make any difference to the ultimate outcome whether you do or not.

Best Regards, Simon

[Dee]

Thanks Simon I'll let you know how I get on.

[go_4_broke]

Please do, there is plenty of sound advice there from Paul and others, just don't do anything drastic until you are satisfied it all adds up. Get more advice if you need it.

Best of luck with it,

Simon

[Dee]

Ok I slept on it and this is the plan - please pick me up if something doesn't sound quite right.

1) I intend to inform all my creditors that it is my intention to petition for our bankruptcy and that I wont be making any further payments.

2) I will stop paying my mortgate and secured loan from this month and contact them to advise that the house is on the market.

3) I have arranged to have the house valued and will have it on the market by the end of this month priced for a quick sale but ensuring that we have enough to cover all our costs.

4) I will use funds from family to secure the rental property and move in leaving my property vacant.

5) As soon as the property is sold I will complete the bankruptcy forms. I will use the funds from the difference between the mortgage and rent to fund the bankruptcy.

If there are any funds left from the sale of the property, what should I do with them. Our car is on its last legs and I wondered if would be reasonable to purchase a new second hand car for no more than £1000?

Any views on this course of action would be greatfully accepted.

Thanks
Dee

[Reviva UK]

Hi dee

Absolutely correct on all of the above, but not in that order. I just wouldn't phone the creditors as you will definately get into a long discussion about the position.

suggested alternative position.

1. secure alternative house / new home
2. get house on market by Friday
3. stop paying mortgage and creditors immediately
4. don't phone and tell everyone instead I would write to them.
5. start filling in the forms now.
6. Sort out car
7. Go bankrupt when you have sufficient money for court costs etc

The house may not be sold for over a year so arrange your life around the needs of the family not the sale of the house.

You need to work out a "TIMELINE" so if you don't pay Mortgage for 3 months ( You will obviously have the new place to pay for though) you may be able to save a litle there. Try to see if you can squeeze the new property to start from 1st of May that gives you a little more breathing space etc