If an IVA is refused, what's the next step? Is bankruptcy the only option? My husband is trying for an IVA. I'm worried about our home if he has to go bankrupt. We're on an interest only 100% mortgage and at the moment we're more than likely in negative equity or very near to it, but if he does go bankrupt will we be forced to sell? Seems kind of mad as there's no money in it but it's keeping me awake at nights so I thought I'd ask. Our mortgage loan is perfectly safe as all payments are up to date and I earn enough to cover it, so we've no problems there... Can anyone out there give me a bit of piece of mind?
Hi there
Welcome to the forum, I hope you find it useful.
In the event an IVA is refused, the next option is likely to be a debt management plan. What is worth noting is that an Insolvency Practitioner will only propose an IVA to your creditors if they are confident it will be accepted.
First of all, don't panic. Make sure you take proper advice before proposing an IVA.
To answer your concern about the house in BR - if its in negative or little equity, then you will probably be able to keep it. A third party can purchase the beneficial interest from the official receiver. You will still be responsible to maintain the mortgage payments.
I can't stress how important it is to make sure you discuss all options with an IP before deciding on the route to take. Have you contacted anyone yet?
If your husband is applying for an IVA and you are not you should consider independent legal advice. If he goes bankrupt now and there is no equity you could buy his beneficial interest for a nominal sum. However, if he enters an IVA and the property market recovers he will almost certainly have to remortgage in four years time to release whatever equity is available at this time. This will impact on the mortgage payments for the remainder of the term. Do not agree to anything unless you are fully aware of the implications to you.
Be aware though that if you have any joint loans, once your husband is accepted for an IVA, you will be chased for the whole of the debt as you are jointly and severally liable for them.
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
If your husband has seen a reputable Insolvency Practitioner, he should have been talked through each of the alternatives that are available to him, in his financial position. IVA and Bankruptcy are not the only alternatives. The Insolvency Practitioner should have outlined the advantages and disadvantages of each of the alternatives available to him and it is your husband who will ultimately choose what is right for himself. If an IVA was considered appropriate by the Insolvency Practitioner, then the practitioner must have confidence that the proposal offers the best return to creditors given your husband's circumstances and in putting it forward must believe it has a good chance of being approved.
If you have negative equity in your property, then bankruptcy may be viewed as a better option in the event that your husband's creditors do not accept his IVA. If he is putting best foot forward, and they reguse to co-operate, and you have no assets at risk from bankruptcy proceedings, this may be better than an open-ended, risky DMP.
Thank you for all the responses. My husband had his first full telephone interview this morning which has thrown up a few more questions. Initially they said that he had £450 spare a month to put towards his monthly payments... Today they're asking for £110 more having taking my income and outgoings into account. While I'd be happy to contribute if I could, I already pay 2/3 of the mortgage, all of the joint loan taken out with the mortgage and all of the other essential costs like utilities, insurances, managing agent fees for the block of flats etc. What's left over goes on my own loans and debts and actually when added together I'm left with a about £200 for food bills for the two of us... To pay the additional £110 I'd need to go further into my overdraft every month so to me this seems like robbing peter to pay paul... Apparently they suggested I might want to try for an IVA myself, but I'd really rather not. While I have debts of my own, i have a well paid job and am managing to keep afloat so far... it's getting harder as my husband's debts have increased and I've had to make up the shortfall but I've stopped adding to the debts and have a loan that will be up in May and another that will be up in 3 years which will free up more income... I'm thinking out loud here but just wondering what to do next. Melanie - my husband is filling out a form on your website so you should get his details shortly.
You should in good hands with Melanie. I'm sure she or her staff will talk you through the options. At the end of the day it has to be an arrangement that is right for you and right for your partner.
You're both doing absolutely the right thing by taking another opinion.
Debt problems, what debt problems? I'm not in De Thames, I'm in De Nile.
Good luck from me - you have picked an excellent team.
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
