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Hi,
My wife and I have 4 children,3 are still under 18,We have outstanding unsecured debts of around £45,000 and an interest only mortgage of 136,000.
Our house is worth aprox, £180,000
We don't have any savings or endowment to cover the repayment of the mortgage in 22 years time.

My wife has just started a full time job and brings home aprox £900 per month, I work for a company that I am also a director in and take a wage of £425 per month.
The company is struggling at the present time so I am unable to take dividends although I have previously taken them.
The company is limited and I own 1 share, there is another director who also owns one share.


We have moved credit cards around and currently pay small interest but this is due to go up considerably in December, at the moment we are struggling to pay so by December we wont be able to pay the interest.


Would an IVA be suitable for us to clear the debt? and if so how would it affect the company

Hi Tom and Welcome to the Forum,

An IVA is to include all your unsecured debt, your mortgage is not included in your debt amount as this is secured to your property.

Do you mind providing who your creditors are? What is your disposable income (Income minus general living expenses)? Is it correct that the joint net income is £1325?

Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

You will struggle to propose an IVA as your equity is more or less equal to the level of your debts. Have you thought about re-mortgaging to the maximum possible - mortgage interest rates are still lower than credit cards and loans to reduce the balances, which might bring more affordable payments?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
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Atually I got it wrong my wife brings home 1200 per month I forgot her part time night job!
I have been bringing home £1500 per month but that is due to fall back to £420 in November because the company is strugling.

We also have Famely Tax credit currently £150 and but I assume that will rise once my wage drops.

Our worry with re-mortgage is if the house price drops? currently we are interest only if we borrow more money what happens in 22 years if our house is worth less that the money we borrowed

Sureley more debt isnt the solution to recovery ?


Creditors are mainly

BARCLAYCARD (8,000)
MBNA loan (13,000)
MBNA Credit card (3,700)
MBNA Credit card (675)
MINT Credit card (10,000)

Where did you get the figure you used for the valuation from?!! It may be worth asking an estate agent to value your house, this shouldn't cost you anything (probably best not to say exactly why you want this valued though) and this will give you a better idea as to whether an IVA or a remortgage is your best bet.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

I looked at homes recently sold in this road of the same type and condition.

I asked the abbey about a re-mortgage and was told I didnt have a chance, because our earnings were going to be too low.

I think it highly unlikely your house will be worth less in 23 years!! house prices long term have always historically risen!

By remortgaging your not taking on more debt, you are merely restructuring the debt you have, (provided your strict and use the remortgage to pay off your credit cards etc.)

I have asked for a re-mortgage they declined
The only companies that will entertain a re-mortgage are those with huge interest rates!

Tom I would suggest that you phone a Mortgage broker and let them carry out a full fact find. Rates are higher now than they have been for a while, but the rate you will be able to get will depend on your circumstances.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

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The difficulty is that your creditors may not accept an IVA proposal from you because you almost have as much equity as you have debt, meaning that if your house is valued at as little as a thousand pounds higher than expected you will be solvent and not eligible for an IVA.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp