I have properties abroad that are in negative equity, as is my property in the UK. Can you tell me how these can affect an IVA. I would love to sell these properties and pay off my debts, but I wouldn't even be able to pay the mortgages off.
I receive a rental income for these properties, but this just covers the mortgages, would this income need to be declared as disposable income, even though it is not disposable?
I have had many a sleepless night over this and am really starting to panic.
As long as the rental income fully covers the mortgages,its probably ok. If they are costing you money then you may well be asked to hand them to the mortgage company.
Talk to an IP for proper advice on your situation.
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
Hi
You will probabaly have to remortgage these properties in the final year of your IVA to release equity into your IVA.
You need toconsider the impact of interest rate rises in the next five years, this could wipe out any surplus income and hence your IVA payment.
All income and all expenditure is listed in an IVA
Regards
Thanks for your input.
How much would they likely what to take from the equity?
The properties that I have abroad are in the USA, so I don't know when there will ever be equity in them, they say it will take years to come out of the property slump over there. I take it I am best to declare everything and be up front and honest about the properties in the USA?
Would creditors look negatively on money that has been sent out to the USA to pay for the mortgage out there? I wouldn't what them to think we are trying to hide money!
I know our situation is a bit unusual, but I really hope we can get some advice on this.
You need to be honest about everything from the outset.
As to how much equity they would want, you will never pay back more than you owe, plus IP fees, so I presume equity release would be calculated on that basis.
Best to give an IP firm a ring to discuss things in detail with them. Click on the expert link on the left hand side of the page and speak to one of those.
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.
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There is little to worry about as the properties are just about covering themselves. Even if they were and you did enter an IVA it would need to be calculated how much the shortfalls would be if the properties were handed back as this would impact on your IVA creditors.
There is also the issue of how the IVA would be treated in the US by those creditors as you may not even be protected should you return. I do believe that in the US banks cannot chase shortfalls on repossessed properties if the debtor uses a bankruptcy lawyer but this would be additional expense and hassle in the future.
