Hi,
Have spent the last few weeks trawling this fabulous site and have found it a great inspiration and help.
In a nutshell we are in debt, have decided to go down the route of an IVA. Have spoke to an IP who thus far have been really helpful.
Thought everything was going swimmingly until my final proposal telephone call today, where I was advised that my mortgage and secured loan were too high. In other words im spending too much on living in my current property.At the end of the assessment we agreed we had a monthly offer figure of around £200 against about 40k debt. But the IP then suggested a voluntary repossesion and that we move into rented. This is something I really want to avoid. My property is already on the market as we realise that this is a logical move and was wondering if this could be written into my IVA, stating any proceeds(MAYBE 10 TO 15K) from the sale will be contributed towards the IVA.
Not really sure how this would work as surely any proceeds would firstly go to the secured loan company.
Any advice on whether this is possible and other suggestions would be of great help.
We are confused, scared and incredibly worried and want to make the right choice
many thanks
If you sell your house, then proceeds would initially go the mortgage and secured loan as you said. Anything else would go across to the IVA.
As a matter of interest, how much are your repayments? Mine are quite high and we were allowed to carry on paying.
Which company have you chosen?
It's not too late to change and it always helps to get a second or third opinion.
If you visit www.iva.com for a list of companies and reviews. Give one or two of those a ring as well and see what they say. The advice will be free and impartial.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Thanks for that, we are with Debt Free Direct.
The mortgage is £800 (interest only) and secured loan around £350.
Any profit/equity(??) would not clear the mortgage and secured loan..
I would certainly seek another opinion. You would be able to include any shortfall from the secured loans into an IVA, but you still need somewhere to live and of course the more debt you include, the more you will need to pay.
At the end of the day an IVA is supposed to be affordable to you. We have companies, such as Cleardebt, on here, who deal with low DI IVA's.
You've got nothing to lose.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I know exactly what you mean - we are all the same!
However, five or six years is a long time to spend with a company and once you are in an IVA you are stuck with that company.
Make sure that you are happy with the company you choose if an IVA is right for you.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
From what you say there is no equity to offer but a voluntary sale would achieve a better price than a repossession. This would increase the dividend all around but there is a danger that the secured creditor may not agree to release the charge if they are not paid in full. Some will agree but you would need to sound them out in advance.
You may have a viable IVA as it stands as the property is on the market and there is a chance that contributions will increase after it is sold. The dividend and contributions may not be very high but certainly more than would be available in bankruptcy. Jan is right in that you should take a second opinion.
Thanks for you advice, just spoke to Cleardebt, who dont see the house being an issue...its confusing that companies can look at the same thing so differently.
Thanks again for your prompt advice,,im sure i will be back(sound like Arnie)
Hi
It was a bit late in the day to tell you that the cost of your income and secured loan was going to cause a problem !! I wonder if this is the first time that you have actually spoken to the IP ? Maybe you have been dealing with advisors/drafters up until this stage ?
I would ask DFD to proceed on the assumption that you are going to sell and introduce any sale proceeds into the IVA, once a deposit etc for rental propery is put by, and that any extra disposible income due to lower living costs will be added to your IVA payments.
If you are actually in negative equity then you will need the permission of the secured company to sell and their debt will come into the IVA.
If they do not agree then hand back the keys, as suggested by DFD but then I would seriously then consider bankruptcy over an IVA.
For many the drive to use the IVA as a solution is to keep control of their home
Regards
Thanks Andy,
A final point, the house was put up for sale a few months back when we thought by reducing the size of our mortgage we could cope with our debts..months prior to even considering an IVA..the reality is we have two young children and really dont want to move, cant help thinking if i hadnt mentioned that the house was on the market this wouldnt have come up....
maybe im getting cynical the more desperate i become!!
Take the property off the market and propose an IVA based on your surplus income. There is nothing to lose and if creditors reject go bankrupt and they will get nothing and you can still keep the house.
If you do not want to sell the house then keep it. I was under the impression that you wanted to sell as it was in negative equity and costing a lot each month. £1150 per month is more than the cost of rent but the shortfall may wipe out any benefit to creditors particularly in a repossession.
