Not suitable for IVA, some Bankruptcy questions

[matt.d]

Hi all,

I currently am on a DMP with Payplan, I owe in the region of 80K and have been told that an IVA is not currently a valid option. The DMP will take me 17years to pay back! I have spoken to a couple of different people about the possibility of an IVA but the amount I can offer and the fact I have HSBC as a major creditor, rules me out

I was wondering about certain aspects of declaring bankrupt...

My wife and I are joint mortgagees on a flat, what would happen if I were to go bankrupt? I've read some stuff about my wife being able to buy my share of the property from the OR - Some rough figures would be helpful here to know if this is a viable option. The flats worth about 215K and the mortgage is for 193K, the equity was based on a 50/50 split between my wife and I. However we are currently in the first year of a 5 year fixed deal and the early repayment charge is 11K - so realistically we don't have that much equity even if we sold for top price.

Also, what happens with the mortgage? Obviously that was based on our combined income and if my wife had ot remortgage just in her name it would be impossible, and I know you can't obtain credit over £500.

the only assets I have are my share of the property, a 2 bed flat (mortgage payments are interest only and about the same as renting sothing equivalent), I also have a car which is on HP and is worth about what I have to repay over the next 5 years (4-5K).

Obviously this would be a big decision and I want to go into with all the facts. I'd be grateful for any info you can offer.

Thanks
M

[zoe]

Hi There
Early redemption charges are NOT taken into account - it is literally half of the equity that will need to be paid over to but the house (in your case £11,000)
Your share of the equity will belong to the OR, therefore only £11,000 equity will remain correct me if i am wrong (one of the experts)but you cannot remortgage to raise this figure!!!
Zoe

[matt.d]

Now I'm confused - I have done some reading and I understood things like sale costs to be taken into account when the OR comes up with the purchase price for my share. Can someone shed some light on this?

The way I read it was that if we sold and made 20K, we could take off the cost of the sale in Estate Agents fees (say 4K - 2%), solicitors fees (1K) etc, we would obviously remove the 11K that we'd have to pay the mortgage company for the early repayment, leaving 6K in cash that would then be split 50/50 between my partner and I - I was under the impression that the OR would then sell the interest in the property for my share of the money left, 3K + legal costs.

Anyone know if this sounds correct?

[littleted]

Hi

I imagine Payplan filled your head with some very confusing words, as they did with me. To put you on a DMP for 17 odd years is crazy. You do know that this particular 'charity' based company is funded by the big credit agencies?
I wouldn't rule out an IVA until you have maybe spoken to an expert, there are many on this site that will pick up the thread asap.

[Skippy]

I would definitely recommend talking to a couple of IVA companies to get their opinion on this - it would be worth contacting Melanie Giles or Ian Millington who post on the forum.

[matt.d]

I would agree with your appraisal of Payplan - Helpful to a point but I sometimes get the feeling I know more than they do through Googling and reading forums like these.

I've spoken to 3 companies about an IVA, Payplan and Melanie Giles ruled it out, Thomas Charles thought it was a no go but thought there may have been a slim chance to push something through.

I'm a bit stuck now - I had read and been told that the amount that the OR would base the purchase price of my share of the flat on would be based on equity - sale costs. Now I'm being told it doesn't include this and is just my share of the equity regardless of what we make after these expenses. The reason its so important is that I can go on bended knees and get family to stump up 3-4K for the beneficial interest but 11K is totally impossible and goign BR will result in us losing our property completely.

[zoe]

Hi
The OR asked for exactly half of mine and catagorically stated they would not take sale or Early redemption charges into account

[Adam Davies]

Hi
Zoe is correct,however ORs seem to vary from one area to another and may be open to negotiation.Paul Johns from REVIVA,a forum expert,may be able to advise better as he deals with many different ORs and I would be interested to hear about his views on this area
Regards

[MelanieGiles]

Matt

Appreciate that you have already contacted my team for advice, but could you just clarify how much you owe and how much disposable income you have to offer creditors on a monthly basis.

[matt.d]

I owe in the region of 80K, disposable income is currently around £375 after all my outgoings. This is what Payplan have calculated - I could probably stretch it to 400 a month.

[Adam Davies]

Hi Matt
You could scrape in with a 20-25p dividend and now that HSBC have relaxed their 40p hurdle rate you could be in with a chance with regard to an IVA.
I would re contact Melanie just to confirm or not if this is a possibility
Regards

[matt.d]

So HSBC have relaxed a bit? That was what was stopping an IVA last time I spoke with MG,Payplan and Thomas Charles. I have filled out a form on MG website and wait to speak to an advisor.

thanks for all the advice.

[Adam Davies]

Hi
Good luck,if Melanie says No then you know that it's a lost cause.
Fingers crossed for you
Regards

[debbiw]

Good Luck Matt, hope you get sorted soon x

[AlanO]

Hi Matt,

It really gets down to negotiation with the OR - Much will depend on how much the redemption charge is and for how long would it will apply (does it runoff in a short period )

If you logically follow through that BI is not acquired and a sale takes place either by choice or not then the redemption charge and sales costs would be deducted from the sales proceeds accordingly if the OR can achieve a better negotiated return all parties win

If you advise where you live then one of the experts may be able to give a regional feel

All the best Alan

www.debtdr.co.uk