I am considering applying for an IVA. Any advice would be greatly appreciated.

[thevikinggeneral]

I am considering applying for an IVA & have a friend willing to make monthly payments over 12 months to help me out of this debt mess I'm in.

Are 12 month IVA's more likely to be accepted than a 5 year variant?

Would my house still have to be revalued at the end of the 12 months?

I also owe a lot of money to my ex who has kept up the mortgage payments on my house for the last 5 year - would she qualify to be a creditor?

Any advise would be greatly appreciated.

Thank you. [:)]

[Shining]

Hi and welcome to the forum. I'm not sure what you mean by the 12 month IVA? I only know of the one that is generally but not always over 60 months.

My best advice would be to talk to 2 or 3 companies and go through it all with them. Make sure they're contactable and sign nothing until you're 100%.

[kallis3]

Hi and welcome,

I'm not sure on that one either. Have you spoken to any companies at all?

Give Andy Davie/Vincent Bond a call for some free advice and they should be able to point you in the right direction.

[Michael Peoples]

A third party can fund an IVA for you and it can be any length you like. The whole point is that they are 'individual' voluntary arrangement and while most are pretty standard they can be written to suit any circumstances.

The payments from the third party would be used to address any equity and thus protect the property and your ex is entitled to claim as a creditors. Get some free advice from an insolvency firm.

[thevikinggeneral]

Thank you very much for your advice Michael, Lesley & Kallis.

[Lisa Thomas]

Hi What is the significance of the 12 month period please? Do you expect to pay off the whole debt over 12 months? How much debt do you owe and how much is your friend offering to pay? It might be a bit hammer/nut scenario to do an IVA depending on the answers...

[thevikinggeneral]

Hi Lisa,

Thanks for the reply. my reason wishing to wrap an IVA up within 12 months is due to the fact that I find living under the obligation of debt very depressing & feel so low that I am unable to hold down a steady job, hence making things even worse.

My friend truly believes in me & knows that in my non stressed state I'm able to function well when employed & is willing to step in and help me through this difficult period & has offered to help me discharge my debts.

I owe around £70k in credit cards & unsecured bank loans & currently in a Tomlin Order over estate management charges for £11k & owe about £50k to my ex who has kept up my mortgage payments for the past 5 years.

My friend has about £1 £15k

[thevikinggeneral]

Sorry, that reply finished prematurely...

My friend has a budget of £15k in the pot to help me.

I know it doesn't sound like a lot, but sadly I don't have many more friends with this level of confidence in me.

[Lisa Thomas]

If you have no assets and your friend is offering to gift you £15k to do a F&F settlement you might be able to do this via an informal arrangement rather than an IVA. It will mean a lot of leg work by you but might be an alternative option to consider. Is there equity in the property that you have a share in?

[thevikinggeneral]

I don't think so, I have a local agent coming over early next week to give me a valuation. In addition to the mortgage, £375k, Barclays have a charge over the property for £26k & the ex has a £91k trust deed noted on the title as she put the deposit capital in to purchase in 2007 hence the reason she's been paying the mortgage to protect her share - but didn't expect it would take so long to sell. I reckon the valuation will come in at around £500k - so I don't think so.

I have no problem doing the leg work Lisa but I'm not sure how seriously creditors would take a direct approach as opposed to the authority of dealing with an IP and my friend is also factoring paying the £15k across the year as opposed to a lump sum, but I can always ask the question.

[Michael Peoples]

Are you intending to sell the property and if not can you now manage the monthly repayments without help from your ex? An IVA may be a suitable option but if the property is costing a huge amount each month it may be more beneficial to creditors if you sold and rented. This would potentially free up surplus money each month which could fund a contribution based IVA.

You could also consider bankruptcy but again if your monthly housing costs are higher than rent then the official receiver could base an income payments order on the cheaper option.

[size5]

It would not make sense for creditors to expect you to sell and rent, if someone else is making the mortgage payments then renting will only increase any outgoings, unless I have missed something here?

Informal settlements are worth a try, but are unlikely to be accepted, in my experience at least, as there is not enough money on the table. Approaching creditors directly invariably leads to a lower discount being offered, that is the name of the game unfortunately.

You have absolutely nothing to lose by offering a single premium IVA, and creditor voting houses, to give them their due, (you won't find me giving them much praise as a general rule) do tend to look at the details of a deal, and if it is the best they are going to get will consider it accordingly. No one, unfortunately, can give you a cast iron guarantee of acceptance, but to give you a clue in 16 odd years of debt advice I have only ever had one single premium IVA rejected. That was 3rd party funds as well, and my client went Bankrupt next day, so serves them right in that particular case.

Regards.

[Michael Peoples]

A lot depends on whether the ex is stilling the mortgage costs as I agree that if this is the case then the housing costs are immaterial. I also agree that lump sum IVAs are much better than informal settlements although the fees allowed are quite poor.

[Lisa Thomas]

I don't usually get involved in informal arrangements but have been able to recently help a couple settle £75k of debt with £6k so it can be done. I think it helped that my advice was they should go bankrupt and the creditors would receive nothing, so something was better than nothing!

[thevikinggeneral]

@Michael, the ex wants me to hold onto the property for the foreseeable future until there is at last enough equity for her realise a positive ROI & has started to advertise for lodgers to offset her mortgage payments.

@size5, thanks for the valuable input, I really appreciate you sharing your experience & perspective. **Kudos Brother**

@Lisa, that's an impressive outcome - I would consider an informal arrangement but have one particular creditor running me through the courts right now & may need to apply for an interim order to avoid a judgement, hence my preference towards an IVA.

Thank you all so very much for getting involved & adding such great value.