Not sure about future

[scirocco]

Hi, I was directed here by someone of another forum..Thanks A.

My confusion and hence dilemma is this.

I went about refurbishing my house about 8 years ago. I had an architect draw up plans and commisioned a builder from the many quotes I received.

I moved out and he set about demolishment in a big way. Within 3 weeks of start date, he decided that this world wasn't for him any longer and went to the big construction site in the sky.

I struggled with employing another builder who would take on his work and when I finally managed, he ripped me off and left the house no further on. I spent my life's savings to keep the project afloat and mortgaged myself to the hilt.

I used credit cards and a loan to finish the house and moved in with a view to selling. It wasn't meant to be a quick turnaround, but we had already spent to the max in order to have something to live in.

I hope you are still with me [:I]

At the same time as our house went up for sale, the market collapsed. Upshot is I am still here 3 years later, house not sold and savings exhausted.

I have just defaulted on my credit cards and unsecured loans for the first time this month. I tried a self administered DMP, but some creditors refused to deal with me.

I finally contacted CCCS who advised an IVA, which I am currently setting up with an IP.

I have £40k of unsecured debt.
I have a mortgage of £174k with a theoretical equity of £60k
My surplus has been worked out at £206/month based on my incomings v outgoings.

Twist:

My wife has a DMP though Payplan. Her debts are £50k all unnsecured, but her name is on the mortgage. She pays nothing towards the household and to be honest I don't know from one minute to the next if she is going to remain here.

Should I continue with my IVA. My IP suggests that my creditors will want her to contribute, but if she walks then I would be liable for the shortfall and the IVA would fail as a result.

She has no permenant means of income, so even if she stayed, I cannot guarantee the increased payments could be maintained.

Should I just include both of our debts and push for BR. That way, I could be shot of her and her debts which would dog me whilst she remains on the mortgage deeds.

[MelanieGiles]

With equity of £60k and debts of only £40k I fear that an IVA may well not be acceptable to your creditors.

Your wife cannot possibly contribute to your IVA if she is in a DMP herself, and presumably she is entitled to some of the equity in the property. Would she not be better off with an IVA of her own?

As you have already consulted an IP to act for you, I would stick with the advice that you are being given. If you look at bankruptcy, the house will definately have to be sold - but you may be able to negotiate up to 12 months to make alternative living arrangements if this is your primary residence.

[scirocco]

Thanks Melanie, I'm just not sure what direction to take. I have discussed the option of IVA with my IP, but I am afraid of my ignorance of all things insolvent. I do not have the first clue on what path is best suited to me and I haven't discussed BR with anyone other than what I've posted here.

I do not want to run from my debts, but I'm also worried that I don't tie up any loose ends that prevent me moving forward.

As you say, she would be entitled to half of my equity, which would go to service her own DMP or IVA, should she opt to go down that route.

That would leave my £30k against my debts of £40k.

What might the creditors want me to do?

I guess I would simply like to discuss my options with someone else before I enter into any agreement that I might later regret.

[MelanieGiles]

I would take advice from a couple of further companies if not just to compare the options you are being advised on. I would hate you to go all the way to a creditors meeting, to just be disappointed at the result. Insolvency practitioners must give advice on all options, to ensure that their clients are able to take a balanced and reasoned decision as to the way forward, to best suit their circumstances.

[kallis3]

Welcome from me as well.

I totally agree with Melanie. Visit www.iva.com and give one or two companies a ring. The advice is free and impartial.