My small business is currently failing and my workload and rates reducing rapidly. I am currently searching for fulltime employment and then will look to sort out our (significant) debts, but don't feel able to do this until I have a stable income.
Now, assuming I become employed in the next month or so, my income is likely to be quite reduced from what it has been. My wife and I have significant unsecured debt (my wife works and earns about £32Kpa) - my debts total £60k and hers about £55K. We have a £175K mortgage (interest only) on a approx £235K property.
As you can see, we are quite insolvent but are keen to keep our home so an IVA is preferable to BR?
My wife is 53 years old (I'm much younger) and on this basis (finally getting to the question here!!) I wonder if an IVA would be possible without the equity release clause? I doubt we would be able to remortgage to release any equity in year 4 due to lack of income and feel 6 years is too long to be in an IVA. At the end my wife would be 59 leaving only 5 or 6 years to clear a £175K mortgage!
If my undertanding is correct, then you have an asset worth £60k and debts of £115k, with perhaps some ability to fund ongoing contributions into an IVA if you find suitable work.
I do not think that you will avoid the equity release provision at the age of 58 (in your wife's case) but if you cannot raise the money the IVA would likely extend to another sixth year.
Reaching retirement age is not necessarily a barrier to re-mortgaging if you have regular incomes to support the lending.
I think you should seriously consider selling the property and possibly using the funds as a one off IVA depending on whether you have any surplus left to fund ongoing payments. Given that you are on an interest only mortgage means that you will have to sell once your current mortgage term ends as it would be unlikely that you could raise the cash to pay the mortgage company and remortgages are very difficult to get.
If you agreed to sell creditors would allow time for this to happen and they also normally allow the retention of monies for removal expenses, deposit and rent in advance. This would give you both a totally fresh start and not have to worry about huge debts and a large mortgage when you are approaching retirement age.
