Spouses Credit rating in an IVA

[Hunter1]

Hello everyone. Hope someone can help me with this one:

I am about to enter an IVA (I hope!). My spouse has an excellent credit rating and we may want to move house in the next year or so.

I have read that she could apply for a notice of disassociation to be on her credit file so that my credit score won't be looked at on any credit applications by her.

However I have looked at this on-line and it looked to me like you can't do this if you are married and living with them.

Am I completely wrong about this? My debts are all historic and were incurred prior to marriage.

Obviously it would be a big downer if my past mistakes mean she can't get a mortgage for 6 years (and totally unfair to boot!)

Thanks

[MelanieGiles]

Hi Hunter

Sorry I can't help you with the credit ratinq query - hopefully Storm will be around at some time as he is the expert.

Just to say that you will be ale to get a mortgage regardless of your credit ratings, but that you may have to pay a little higher interest rate as a result of your debts. It does seem unfair that she would be penalised for debts which you incurred prior to your marriage, but I am sure a mortgage lender would view this sympathetically.

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

[MelanieGiles]

Hi Hunter

Sorry I can't help you with the credit ratinq query - hopefully Storm will be around at some time as he is the expert.

Just to say that you will be ale to get a mortgage regardless of your credit ratings, but that you may have to pay a little higher interest rate as a result of your debts. It does seem unfair that she would be penalised for debts which you incurred prior to your marriage, but I am sure a mortgage lender would view this sympathetically.

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

[Hunter1]

Thanks Melanie.

One more question - if we did move would I have to re-negotiate my IVA as my expenditure would probably have to increase?

We're not talking about moving to a mansion here, just somewhere a bit bigger!

[Adam Davies]

Hi
It is unlikely that your IP will agree to you taking a mortgage if it decreases your disposible income,if it does not affect your IVA payments then it should be ok.
regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[MelanieGiles]

Hi Hunter

Well you will need to justify the reasons for the move to your IP, who will then need to justify why your IVA payments would need to be lowered. You can only lower IVA payments with the express agreement of your creditors, at a newly convened creditors meeting. There is therefore some risk that they may not accept your counter-offer, and if this is just being done because you fancy a move then I would not personally recommend it. If, however, the move is necessary - such as if you have more children - then this is easily justified.

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

[Hunter1]

Thanks for the advice everybody.

Really looking for an answer to whether she will be able to apply for a sole mortgage without me being taken into account. She owns the current house and other property and any mortgage for a new place will be very small. Probably less than 25% of any new property price.

Sounds like my IVA won't really be an issue in these circumstances?

Sounds like that's not an option.

[MelanieGiles]

Hi again

There is nothing to stop your wife from applying for a mortgage in her own right - it sounds as if she is a lady of means so is unlikely to encounter any problems.

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

[Storm]

You can't request a disassociation if you are married or designated common law partners. This is generally used to disassociate people of the same household whose financial affairs are completeley independant ie sons & daughters.

To be honest financial associations have a limited effect on most creditscores (Max 10%) - normally the applicant(s) are the main focus.

Melanie is correct your wife can apply for the mortgage providing she can meet the income calculation and in those circumstances the underwriting is very different and not creditscore driven.

However lenders may not allow her to take into account any monies you pay her as 'rent' when demonstrating affordability.

[Hunter1]

Thanks Storm that's really helpful.

[Hunter1]

One more question:

Is the situation the same if I go bankrupt? Does this affect my spouse differently than if I am in an IVA?

Thanks

[Adam Davies]

Hi
Again there is nothing to stop your wife from taking a mortgage in her own name if you were bankrupt.You would not be able to be part of a mortgage application until you had been discharged.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[Hunter1]

Thankys everyone.

Jusr hope my IVA gets approved. Creditors meeting set for 25th so fingers crossed.

[tracy.h]

Hi Hunter
Really do hope the 25th is a good day,and you can move forward goodluck