Please help, IVA or bankruptcy for £111k debt?

[debtproblems2013]

For nearly 10 years I have run my own business and unfortunately the company is now due to be liquidated.

Once the liquidation has been processed the personal guarantees that I have signed will be enforceable (approximately £81k). This will increase my unsecured debt to £111k.

In 2008 I purchased an industrial unit in my own name and rented it to the company. The unit is currently being rented out on a tenancy agreement awaiting a lease, unfortunately the difference between the mortgage and the rent is £333 a month outstanding. If I sell the property or want to renegotiate the mortgage a break fee of £31k would become due. The unit has a 2nd charge over my home of £70k, in the event of shortfall.

All the debts are in my name, but the 2nd charge covers both the wife and I. If we sell the unit the 2nd charge will be removed as long as we repay the mortgage in full and then pay the break fee.

My credit rating is very good at moment, never missed a payment. But this won’t last and I would rather start the process of bankruptcy or an IVA rather than wait.

One of the trade creditors with a personal guarantee has started a CCJ.

I only have between £125 - £200 a month to pay back the debts.

[debtproblems2013]

There is £30k equity in the unit which would be wiped out by the break fee.

The home has around 80k equity split between the wife and I, which is unavailable due to the unit mortgage holding the 2nd charge.

I have full time employment but the wife doesn't work.

[lem]

How will you manage to fund an IVA without any income? (I admit I am presuming this if the business you currently run is no longer running, do you have another job?)

It is difficult to advise which is the best option based on the limited information you have given and therefore you need to gain specialist advice on your full circumstances, plus the pros and cons of both options for you to then make an informed decision.

Although in my own personal view, if you have no house to protect and it won't affect your employment moving forward, I would personally not even entertain an IVA on that level of debt, but a lot depends on what work you have now and how secure this is going to be for the next 5-6 years to provide a regular enough income to service an IVA.

[debtproblems2013]

Hi lem,

Looks like I replied just before you posted.

"There is £30k equity in the unit which would be wiped out by the break fee.

The home has around 80k equity split between the wife and I, which is unavailable due to the unit mortgage holding the 2nd charge.

I have full time employment but the wife doesn't work."

[12 months to go]

morning debtproblems 2103

My own personal debt was similar to your £111k and for me IVA was the ebst option and now some 6 years on im free and have been for 12 months.

however my personal & forum experience does not give me enough knowledge to post a helpful reply to you, as the situation you find yourself in , whilst not unique, is a little different from my and other forum members run of the mill debt matters.

I think you will find one of the experts ie IPs will respond who have a better understanding and even though its bank hol weekend , im sure one of the proffesionals will reply by Tuesday at the latest if not earlier.

dont however stress too much, as we benefit from some very experienced superb experts who will offer the correct advice, albeit they may need to ask a few questions in order for them to answer your specific questions

best wishes and good luck

[Michael Peoples]

You should get some free advice from an insolvency firm because there are a number of issues which makes it difficult to even try and give advice on a forum. For example, it seems the debts are in your sole name but there is a charge jointly against the marital home.

I am a bit confused so perhaps you could give us more information.

[debtproblems2013]

Yes the debts are in my name only.

With regards to the charge, as the home is in both our names the charge had to be as well.

[Kelly O]

Hi debtproblems2013 and welcome to the forum,

You should consider seeking some advice from an insolvency practitioner so that you can discuss your circumstances, IVAs and bankruptcy in full so you can make an informed decision about which route is right for you.

[Michael Peoples]

Your wife may need to take advice too as her interests need looked after. She should consider independent legal advice especially if she was not aware of any of the dangers when she signed the charge.

[sponge]

I read about Stuart Hall handing over his share of their house to his wife. The lawer representing the claimants said there was very little they could do even in the high court, because it was transferred in the time between he was accused and convicted. I understand that you can pass assets between husband and wife at will and as often as you like?
Naturally you can't do this post once BR or IVA is in place, so even if you go belly up you maybe able to protect your home errrm. I'm no lawyer or expert and it's just a thought so legal advice is a must before embarking on what I think they call asset stripping. Any expert input?

[ClareSilver]

If you were to go bankrupt and you transferred an asset prior to the bankruptcy, the trustee has the ability to investigate this transaction and potentially can go after the beneficiary of the asset as you have knowlingly transferred an asset whilst insolvent especially if the asset was transferred in the preceeeding 5 years before the bankruptcy.

[sponge]

A few days later it was followed and it was suggested that becuase of his action the BBC were considering to paying the compensation themseleves

The only other thing that crosses my mind maybe if you have old pensions you can look at a SSAS (which only really works for business peopl) but depending on the pot worth, you can setup you own pension with the pension regulator and HMRC via a SSAS practionair, they are HMRC licensed. You use the pension pot to buy your own commercial property tucked into the pension in exchange for part or all of the pot direct to you. The rental income then services the pension and you can maybe buy your way out of stook with the pot, extreme I know, but some business owners are using it as alternative lending where the banks won’t. The banks in return are setting up portfolio accounts to accept this new style of pension arrangement
Anyway Google SSAS pension you’ll see what I mean. And of course anything to do with pensions get professional advice

[sponge]

If a lawyer can't get revovery of an asset for compensation for a rape victim, in a high court, I think, but don't know that a trustee wouldn't fair any better for an unsecured creditor, just a thought though

[saul6669]

There are a few things that will help you with IVA, well hypothetically if you apply for IVA and you own a car during the tenure of IVA, you will be able to recover your car but in case of bankruptcy, you might need to sell it so think about what you will do.

[Lisa Thomas]

Saul you have replied to a post from 2013!