Part of my IVA is that I have to sell my house before I start paying my creditors. With the current conditions the house is now worth less than my mortgage and secured loan. If I sell at a reduced price then I will not be able to cover these let alone start paying my monthly contributions.
I only have until July to sell (1 year). Any advice?
I assume creditors wanted the property sold so that when you rent the savings made can be introduced into the pot. Given the current situation they may agree to an extension to allow the property to sell and avoid any shortfalls. The secured loan may not agree to release their charge unless paid in full as they will be aware of the IVA and know that they will then only rank for dividend.
A voluntary termination will only make the situation worse as the property will likely achieve even less at auction than on the open market. The increased shortfalls introduced into your IVA may actually lead to the dividend decreasing even with the increased monthly contributions. I would do the sums and then go back to creditors with a variation proposal and if you offered an extra year creditors may even allow you to keep the property after all.
Thanks for the response. We have informed Debt Free Direct abouth the situation and reminded them that there is a windfall of about £15k due in three years due to payment protection rebate. We are still waiting to hear back from them some weeks later... This is, to be fair, the first time that we have had major issues with DFD.
Surely that £15k payment protection rebate would more than balance any savings made from selling and renting. Obviously, if you sell now the rebate is gone so that would be an additional incentive to creditors to allow you to keep your home.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
