My question relates to taking out a new mortgage

[deanb]

hi, ive had an IVA for about 9 months, and have made payments ok. The IVA stated there was unlikely to be any equity in our house and this written as such for the creditors. Circumstances changed, my wife and I split and we sold the house. The small amount of negative equity was taken on board by the IVA with the creditors and IP's consent.

My question relates to taking out a new mortgage. My parents are offering to sell me their property at a reduced price, so as to give me part of my inheritance whilst they downspec to a smaller place. What would happen if I did this now? Would the creditors be entitled to the future equity even if the original agreement did not mention this? If that is the situation, I feel it would be better for me to rent and decline my parents offer!

[hara]

Hi denab,

I think you have to consult your IP before any such sale taks place.

Also what do you mean sale,are you giving them any money? I don not think you are allowed to do that as that should be going to creditors.

even if you acquire the house you will most certainly be asked to remortgage the house in 4th year or worse it may be cosidered a wind fall and asked to pay a sum .

The best option would be to wait until IVA completes and the tansfer to take place
hara

[MelanieGiles]

Hi deanb

If your parents are prepared to fund the deposit on your property, and your mortgage payments are to be no more than the rental sum you are currently paying, there should be no reason to include the new property in your IVA.


Where things get tricky, however, is if you decide to make an offer of full and final settlement by raising equity on the new property at some time in the future. This could be deemed to be a windfall.

Others have successfull made their own offers of full and final settlement in similar circumstances, and this was accepted by creditors, but I would not rely on it - creditors are getting more and more involved in variation reports, and are more likely to pick up on this matter now.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Adam Davies]

Hi deanb
I do not think that you will have to surrender the equity in the fourth year as it is not a condition written into your IVA.
As Melanie says it may be best to let your IVA run its course to avoid any problems with the gifted deposit.
Take advice from yourIP before doing anything and make sure that its the actual IP that you speak to and not an assistant because you need a definitive answer on this proposal.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp