Starting IVA Questions.

[heva81]

Hi,
JUst come in to seek a bit of advice;

me and my partner have been living together nearly 2 years now and have a young daughter, we bought a house- although its all in my name. My parnter has debts totalling 50-60k, these debts were all from years before he met me. He was paying things off fine to begin with but started to really struggle. he's been on debt management from nov while i was still expecting and during my maternity (we were advised to do this before IVA as our monies would change when baby arrived) i'm now back at work and we'd like to start IVA process.

I know i will not be pulled into the IVA as nothing is in my name; i've been told they will still need to know how much i earn so they can calculate simon's monthly expenditure.
currently he's paying £250 a month (of which a good £90 goes on management fees!) we were told he'd roughly need to pay £320-350 is that right because we only just get by now! would bunkrupcy be a better way to go, altho i hate the thought of someone taking things from my home as i have no way of prooving things were bought by myself and before we met.
Also i wanted to check that they wont ask for equity on house as its in my name.
Your advice is greatly needed!

Heather.

[Andrew Graveson]

Hi heva81 and welcome to the forum.
I'm sure some of the insolvency experts will post soon with regard to the IVA questions. However I'm pretty sure that as the house is owned solely by yourself that it shouldn't factor in terms of release of equity.
On the debt management side the charges seem very heavy. The Office of Fair Trading suggests that debt management companies should not charge more than 15% (plus vat) of the monthly contribution. In your case that would add up to £44.06 per month rather than £90.
I do hope that an IVA is possible for you if that's the solution that you want to enter into. If for any reason it isn't possible I'd suggest you look to either a commercial debt management company with lower charges, or one of the "free" debt management companies that are funded by creditors.

Andrew Graveson
Independent Mortgage Broker & MD Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[Andrew Graveson]

Hi - Sorry I should have added as well that bankruptcy might well offer some advantages over any kind of debt management plan in the event that an IVA would not work.

Andrew Graveson
Independent Mortgage Broker & MD Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[heva81]

Thank you, actually now you've said that i think it is £45.[:I] My partner used to pay more before i went on maternity leave, then it was adjusted to a more realistic £250 while my income was reduced.

He is seriously considering bankrupcy, think i'm just to clingy and wont give up my big tv and dvd collection! honestly i have nothing else of value! but they are mine is my arguement in true 10yr old style![:o)]

[Andrew Graveson]

Nothing wrong with standing up for your rights!
I don't think a TV or DVD collection would be at jeopardy in bankruptcy though.

Andrew Graveson
Independent Mortgage Broker & MD Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[Skippy]

I live with my partner in his flat and the only things I declared on my bankruptcy forms were my assets - my car and my laptop, both of which I was allowed to keep. No-one questioned whether my partner had any assets as I was going BR on my own.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[Adam Davies]

Hi
No-one will come into your house and take your personal items,those days of bankruptcy are long over.
Just be sure to get advice on the equit in your house if he enters an IVA or BK because even though it is in your name he may have an interest in it as I noticed that you stated that you both purchased it.Does he pay towards the mortgage etc ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[heva81]

Thank you, the mortgage and deeds for house are in my name only, but he does live with me and we share all bills which are also in my name aside from council tax which of course is joint. one of his debts was a bank account so his wages go into my account.
my mortgage is £500 and bills work out £500 we just have a 'house pot' that we both chuck £500 a month in! not an actual pot tho!

[heva81]

So i'm guessing now that any OR will think he does have an interest in house, would that mean selling? or could a make him an offical tennant!![:0]

[Adam Davies]

Hi
Wait for a reply from one of our IPs,both have been on holiday but Catullus is back and will hopefully pick up on this thread.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[catullus]

Hello Heather,

We really need a bit more information to give a definitive answer.

1 Do you have a joint account in to which the two "pot" payments of £500 are paid?

2 Do you pay the mortgage from your account and could you make this payment without a contribution from your partner?

3 Could there be any suggestion that your partner has paid for any material improvements to the property?

4 Do you have a repayment or interest only mortgage?

You'll probably see where I am going with these questions and if your finances are well and truly mixed together, with joint accounts and your partner making a general contribution to the running of the household, it is possible that the Official Receiver could try and argue that your partner had bought himself an interest in the property.

Before you panic, however, do understand that it would be very difficult for the OR to run that argument and he would have to prove a strong case, along the lines set out above,for you to have real concern.

My advice to you would be to discontinue any joint financial arrangements that you have and ensure that he pays you "rent" directly in to your account to enable you to pay the mortgage yourself.

I hope that is helpful and if you can post answers to the questions above we'll see what other advice we can give.

[Skippy]

Can I jump in on this one?

Catullus, do you know how long it normally takes before the OR lets you know if they have an interest in the property? I live with my partner in his flat, which he has just sold and he has bought another property, obviously entirely in his name. We split the bills and I give him the cash each month, including £200 which I put down as rent on my SOA.

We have no joint account, he pays the mortgage (and could pay it without me as he did up until last April), I have paid for no material improvements (and I won't in the new property) and the new mortgage will be interest only.

Sorry to hijack your post Heather and I wish you and your partner luck.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[catullus]

Hello Skippy

I think that the OR would have to inform you of his view well before the 12 month discharge period has expired.

The reason for this is that he has to effectively force your cooperation (and that of your partner) by using the one trick in his book ie opposing automatic discharge if you dispute his findings.

Alternatively he would have to farm the case out to a private trustee who might be persuaded to commence proceedings to recover the equitable interest, but in most bankruptcies there would be no money to fund the litigation and the arguments could well be tenuous and very easy to defend in court.

That's why I said in my post to Heather that this is probably not something to get too concerned over because the OR is only likely to argue this point with the most blatant of cases.

Of course, in your circumstances, you haven't got anything to worry about because the arrangements that you have made as to how to finance the old and new property avoid all the areas where people can innocently find themselves on the wrong end of such an argument

[heva81]

Hi Catullus,

thank you for the reply, i'll try to give a bit more detail;

1) there is only 1 account, its in my name. Both wages go into it and all house bills are split and come out of that account. My partner did try to obtain a basic account but was unsuccessful.

2)i could pay mortgage without contribution, but the other utilities i would need more support.when it all goes in and out of 1 account there is no divide to who pays what.

3)No aside from a few tins of paint in our daughters room we have not made improvements or fitted out with any new furnishings.

4)i have a repayment mortgage

I would not have a problem with my partner having his own account for his wages to go into, with a standing order to my account for bills etc but i know for a fact that Nationwide turned him down for a very basic account and he lost hope. is it likely someone else will let him have one? where can i gain any information for this?

[catullus]

I think that other posters here will have more up to date information than me,because the banks' policies seem to change weekly, but Coop seems to have a consistently sypathetic stance to allowing people in financial difficulties to have basic bank accounts.

Most of what you have said above supports the view that your partner wouldn't have a claim on your property but I do think that it is important that you try to separate your finances more so hopefully that will give your partner the incentive to look for an account. I understand the reluctance though.

You could then have an arrangement where he is seen only to be contributing to household expenses and, if necessary, paying an element of rent.

Hope that helps.