I entered into an IVA two months ago. Would it be a wise move to sell up and wipe out debts ?

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Lisa.67

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Post by Lisa.67 » Mon Apr 14, 2014 11:03 am
I entered into an IVA two months ago. Since then my husband (not in the iva) and myself have decided to cut our loses and sell up and use the equity(about £60,000 to pay all other debt (his credit cards, secured loan on the house and my iva and move into rented accommodation. Is this a wise move so we can wipe the slate clean?
 
 

MelanieGiles

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Post by MelanieGiles » Mon Apr 14, 2014 11:11 am
Hi Lisa and welcome to the forum

Will the house sale enable you to repay all of your debts in full? If so, it could be a very good way of making a fresh start, but jumping off the housing ladder is something that does need serious consideration, as it could take some time to get back on if you have to save up for a deposit.

That said, home ownership is not the bee all and end all, and many people live very happily in rented accommodation for all of their lives.
Regards, Melanie Giles, Insolvency Practitioner
 
 

Foggy

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Post by Foggy » Mon Apr 14, 2014 11:33 am
Good advice from Mel. Do also remember that, because of the existing IVA, a mortgage in the future will be at least 6 years away (unless lending changes drastically during that time). You will also have a few extra hoops to jump through when renting as your credit check will not be good.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
 
 

Michael Peoples

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Post by Michael Peoples » Mon Apr 14, 2014 11:34 am
This will likely free up spare cash as you will not have a mortgage, secured loan, IVA payments or your husband's credit commitments. Your credit file will be damaged for 6 years making a mortgage difficult to obtain during this time unless your husband can source one in his own right.

If you are looking to sell make sure the equity is split properly and only your share should go to your creditors and anything that belongs to your husband is his as he sees fit.

Creditors may allow you to retain some proceeds from the sale to relocate so have a word with your IP.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

Nutkins

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Post by Nutkins » Mon Apr 14, 2014 6:08 pm
What a shame nobody advised you to do his in the first instance rather than enter into an iva!! You will have incurred fees to your ip which will have to be included in your total debt which is sad when you may not have needed to go down the iva route!! It would also have made obtaining a mortgage in the future easier with no iva on record!! Good luck
 
 

MelanieGiles

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Post by MelanieGiles » Mon Apr 14, 2014 11:46 pm
Perhaps they did, Nutkins, it would have seemed the most obvious solution to me, but selling a property can be very emotive, and maybe Lisa and her partner were not ready to make that commitment at that time.
Regards, Melanie Giles, Insolvency Practitioner
 
 

Lisa.67

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Post by Lisa.67 » Tue Apr 15, 2014 7:30 am
Yes you are absolutely right melanie. We were very torn with the house as we have lived here for over 15 years and it has been the family home for our four children all in their teens now.
The iva seemed the best option at the time but now we see ourselves no more financially secure and are still struggling with no money before the end of the month.
Thankyou for your comments it has been very helpful.
Lisa
 
 

Nutkins

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Post by Nutkins » Tue Apr 15, 2014 9:08 am
Sorry I totally sympathise as we were torn too although the equity would not have been enough to pay off our debts! Living in an iva is very difficult and can take up to a year or 2 to get used to living within such a tight budget! I remember many a dark day when the money had run out and feeding the children was a struggle! Some months the iva amounts do seem unrealistic with extras like school trips, trainers etc!! We did sell eventually and at that time it was the best thing we did as it freed up more money for us to live on as we only had to pay 50% of the extra available income! Not sure what would happen today as this was 4 years ago! I would advise either stick with it for a bit longer to see if it's just a case of adjusting or bite the bullet and sell! If you do sell though as you have probably read obtaining another mortgage may be difficult! Good luck with what you decide
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