Due to a change in circumstances my family will need to move house in the near future. We plan to rent out the current property as it is in negative equity and rent elsewhere (albeit at a higher cost) as we need to be near London. The result of this change will mean that we will no longer have any surplus income at all so won't be able to keep up the IVA payments.
Looks as though we will have to stop paying the IVA in the next month or so and I guess ultimately petition for Bankruptcy but any idea how long I can leave things before action is taken?
Also, can the OR force the sale of the current house even if it is in negative equity?
Once you stop paying your IVA it will normally fail after three months. You will then be back to square one with harrassment from the creditors. You could use the money from that period to save up the fees, currently £625 per person.
The OR can hold onto your house for two years and three months in bankruptcy before making a decision.
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
The OR will take the rent from your present house if it isn't your residence. Also, you would need to get our mortgage providers permission to rent it out.
Yikes, did you say the OR will take the rent from the current house?? How can they do that if that is simply forming part of my income? Without that going into the pot we can't afford to rent elsewhere.
Are you sure about that as it materially effects things!!
RHB - would it not be that this money would pay the mortgage on this property?
You should ask your mortgage company's permission to rent out though.
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
But the OR can take your income...that's the point. Ultimately the OR will do what's best for your creditors so may let you rent it and hand over any surplus it generates. Have a google if you can't wait until tomorrow! x
If the OR does take the rent then potentially he could be seen to be trading. Also the mortgage company would then appoint a receiver over the property to protect their interest. The easiest way would be for the tenant to pay the money directly into the mortgage account and the OR would struggle to get it back from the bank.
