www.iva.co.uk

Married with 2 small children a £300K mortgage on a house valued at £400K I can no longer afford the repayments due to losing my job and new job is 30% of my old salary. £35K overdraft and credit card debts. How could I keep the house ?

How much exactly are your total unsecured debts?

If the equity in your home is worth more than your debts then you are not insolvent so an IVA wouldnt be an option.
However, you could try a debt management plan. Hopefully your creditors would agree to freeze the interest on your debts which would free up more money.
Take a look at www.iva.com where there is a list of proffessionals and reviews on each.
Give 2 or 3 a call for some free case specific advice on the best way forward for your individual circumstances.

Hi Ziggy and welcome to the forum, your mortgage is a priority debt and assuming you can pay this, utilities and your household living costs then what is left could be offered to a creditor, good link by Lisa above to find 2 or 3 people to speak to, about all debt solutions and they can offer expert case specific advice. x

You could try releasing equity to offer a full and final settlement to your creditors...a one off iva may be possible to facilitate this with a bit of a write off. There is also a chance you could get a normal 60 or 72 month iva if remortgaging is impossible or unaffordable. Speak to a few companies for advice. x

Hi,

I would try an IVA first, if you can afford it.....

However, some companies wont accept anything less than at least 40-50p in the pound.

If you had no equity in your house, it probably would be more straightforward.....

You could transfer the beneficial interest in your home to a parent or someone you trust..... for a £1 (one pound)

This way even if you went BR, the house would not form part of the BR estate....as long as its transferred properly, with 3 independant estate agent valuations....

Why would BR ignore 100,000 equity?
or am I just being dumb?

Isnt transfering assests illegal - knowing that your entering a BR - and OR can reverse this decision

this is not illegal if done properly.....

i am not saying to do anything illegal.....

What I am saying is that get three current proper valuations to find out exactly what the property is worth...

Dont forget, houses at auction dont sell at full market value....

If you look at the folowing offences - you will note there is references to disposing of property prior to Bank ruptcy

Bankruptcy Offences

Insolvency Act 1986 (except where stated)

SECTION


OFFENCE


DEFENCE


PENALTY

353


Non disclosure to the Trustee of any property comprised in the bankrupt’s estate and/or failure to disclose any disposal of assets which may be capable of setting aside


Innocent intention
(s.352)


7 years imprisonment, fine or both

354 (1) and (2)


If the debtor fails to deliver up all or any of his assets or if he conceals any debt due to or from him with a greater value than £500. Applies retrospectively for a period of 12 months prior to bankruptcy petition

355


Bankrupt fails to deliver up books, papers, and other records and/or prevents production, conceals, or destroys the records. Applies retrospectively for a period of 12 months prior to bankruptcy petition

356


Bankrupt makes false statement or material omission

359


Bankrupt disposes of any property obtained on credit in respect of which money is still owing in the period of 12 months prior to bankruptcy petition

357


Bankrupt transfers any property or makes a gift at any time within 5 years prior to the bankruptcy petition. Also an offence if debtor conceals or removes property within 2 months before or after a county court judgment has been obtained against him


2 years imprisonment, a fine or both

358


Bankrupt leaves or attempts to leave or makes any preparation to leave England/Wales with property valued at more than £500 in 6 months prior to bankruptcy petition

360


Bankrupt obtains credit either solely or jointly with another in excess of £250 without informing the creditor that he is a bankrupt. Wide definition of “credit”!


No defence

362


Bankrupt contributes to his insolvency by “hazardous speculation” (gambling!) in period of 2 years prior to bankruptcy petition

354(3)


Bankrupt fails to account for loss of any substantial part of his property incurred in the 12 months before bankruptcy petition

361


Bankrupt fails to keep proper accounting records in period of 2 years prior to bankruptcy petition. However, no offence if total liabilities do not exceed £20,000.


Failure is honest and excusable

11 (CDDA 1986)


Bankrupt is directly or indirectly involved in the management of a limited company without leave of the court


No defence

You are completely wrong......

Ask any IP......

I think arguing over whether or not the client should tranfer an asset and for how much is irrelevant. From what I can see he cannot afford the £300k mortgage regardless of the level of his unsecured debt so keeping the house is going to be extremely difficult. It will be down to the mortgage company to allow interest only or a payment break but unless he can afford the mortgage he will have to sell the house.

It may be best advise to sell, clear all the debts and move on with an unblemished credit history.

Think ginger may be right. Our friend in the insolvency dept says they trawl everything for the last 5 years - I wouldn't risk doing anything. He told me that even if I transferred any savings (when we had some) into OH's name that would be an offence if I went bankrupt and they would take that amount into account regardless of whether it had now been spent.
Thant's why I think IVA's are becoming the norm now rather than BR

Hi
An asset can't be transferred under value, so the question will be how much the house it truly worth.
As Michael states it may be unaffordable so a sale would possibly be a better option
Regards

Michael - it was not about arguing about wether a client should transfer assests - but an issue as this whether this could be done legally prior to entering bankruptcy.

The individual has to take some professional advice and enter a plan that suits their own individual needs.