www.iva.co.uk

Hi, Id like your advice on a couple of IVA issues please.
I work in Fin Servs, and half of my salary is made up of sales related bonus, which has now stopped as sales have fallen, however my expenditure was reliant on my 2x what I now earn.
3 years ago I seperated from my wife, and my 2 children live with her. We sold our home, and as I wanted to make sure her and the children were secure, I gave her all of the equity(which was only around £20k) to put down on a house, and as she wasnt working I applied for a mortgage in jnt names so that she could buy a house.I pay her £600pm maintainance, +I also took on all the unsecured debt we had accumulated as a couple, (c.£45k),because she couldnt afford to pay it.
I am now in a situation where my income has halved, my unsecured debt has grown, +I am now unable to meet the payments, although through selling bits and pieces and using all my savings, I have up to this point management to meet all min payments. My total unsecured debt is now £88k, and minimum payments amount to £1450pm. I am considering entering into an IVA, but I need to know whether the property my wife and children live in will be taken into account, even though I have never lived there, and the mortgage is paid by my wife from her own bank. I have never considered the house as being part mine even though my name is on the mortgage. This was purely an admin arrangement. Can you please let me know as I dont want to go down the IVA route if my creditors then insist on my releasing money from a property which really has nothing to do with me.
My other question relates to the car i have on lease purchase. it is correct i will be allowed to keep the car as it is not classed as an unsecured debt? When the lease is up in march 2010 I will of course be trading down to a cheaper model, but I need the car for work - I drive 25000 business miles a year. Also, will an IVA mean that I will not be able to lease another car when this one ends?
Kind regards
Mav

Hi
Wait for Melanies or Davids expert advice regarding the property/
There should be no problem keeping the car and taking out a new lease in March 2010,there are companies that can help even if you are in an IVA
Regards

Nice portrait picture Andy, looking like a statesman or businessman of the year? Is you picture in your IVA book?

Hi Thanks
No it was taken after the book,but other pictures are in there
Regards

Hi
Just want to bump this question up for David Or Melanie to answer
Regards

bump

You will need to convince your creditors that you actually have no financial interest in the property, apart from the £10k that you put down as the initial deposit from your share of the equity. How much did you originally pay for the property, and how much is it worth now? Also how much is the current mortgage?

A lot of this will hinge on what was the intention between you and your wife to deal with the monies at the time of the separation. Clearly this was not done as a clean break settlement as you took on all of the debts and ar continuing to pay her maintenance. Was there a Consent Order drawn up at Vourt to confirm this transaction, and were you struggling to pay your creditors at the time?

This issue is probably far better addressed by taking legal advice from a solicitor with specialist knowledge of insolvency proceedings. If you would like to tell me where you live I may be able to suggest someone.

Hi Melanie,

I wasnt struggling to pay creditors at the time, as my earnings were more than they are now, and the debts were smaller. Its the combination of larger debts and suddenly lower income that has led to my current predicament.
There was no official separation agreement made, its just something we agreed between ourselves. It didnt bother me leaving her with all the equity from the house as I wanted to make sure the children had a secure place to live.
The house is worth I imagine something like £160,000 and the outstanding mortgage is £130,000. How would I go about convincing the creditors that I have no financial interest in the house? As I mentioned earlier, I have never paid a mortgage payment on it, my ex pays that herself. My only financial commitment to her is the maintainance I pay for the children.

You would go about convincing your creditors that you have no interest in the property by reporting the facts as they happened and providing the jsutification for what you did. They will then make their minds up, based upon those facts, whether they feel better off accepting an IVA, or petitioning for your bankruptcy where a Trustee could pursue a claim against the property, but potentially end up with a lower return to creditors (if any).

A good IP will be able to help you present your case accurately and fairly. I have acted in cases similar to this in the past, and so long as the IVA proposal is completely transparent in this regard, I would have thought you stand a good chance of acceptance, given that the numbers involved are relatively modest.

Thanks Melanie. Just one more question, if I apply for the IVA, and the creditors turn it down, will they automatically then petition for bankruptcy or would the decision to declare myself bankrupt be mine alone? I suppose what I mean is would they continue to give me the opportunity to try and pay the debts off or would they just jump straight in to a bankruptcy petition because I had applied for an IVA in the first place.

I dont want to put my childrens home at risk by applying for an IVA if the petition fails and then their home gets dragged automatically into a bankruptcy case without me being able to stop it.

Thanks for all your help so far.

Hi
They will not atomaically peition for your bankruptcy,you will just be back to square one and can negotiate reduced payments yourself or go into a Debt Management Plan whilst you consider up your options.
Regards

Bankrutpcy is in no way automatic - indeed your creditors will probably prefer you to remain outside bankruptcy in order that they can pursue you directly for your outstanding debts - which could be managed through a Debt Management Plan.