www.iva.co.uk

Hi

I have had my mortgage with the Woolwich since the year 2000, but haven’t lived in my property in the North East since 2005 when I was made redundant and ‘temporarily’ moved to Leeds. At this point I contacted the Woolwich and explained the situation and they gave me permission to rent out my flat on a temporary basis.

However, the ‘temporary’ move seems to be pretty permanent and I am now happily settled in a house with my girlfriend (which she owns). We have only recently moved in together so I need to change my correspondence address so my mortgage company can contact me if need be. I am wary about doing this as I am unable to find the letter that agreed to me letting out my flat. I can find a letter that states they received my letter asking permission, but not one that they have agreed. An added complication is that my mortgage is now with Barclays since they took over the Woolwich. I am told that when lenders agree to this, it’s on a short term basis. 7 years isn’t short term so I am paranoid that when I change my correspondence address, they will realise and I will be in a bit of a pickle.

So the answer seems to be to sell my flat. Is this possible during an IVA? I realise that half of any equity (if not all) will be swallowed by the IVA agreement, but I am fine with that. Its money I owe so I cannot argue. I would guess there would be about £10-15k max. From memory, my agreement lets me keep £5k.

I spent years burying my head in the sand which got me into debt and am now just trying to do what I can to get everything on an even keel now that I have found someone I want to marry. I am much happier since I started my IVA without the daily stress and worry. But it feels like that is coming back because I need to let someone know about a change of address. In the old days the stress etc was just something I had to live with, but now its not just about me.

Any words of wisdom/advice etc would be greatly appreciated.

Welcome to the forum - they usually change the residential mortgage to a buy to let mortgage after a few years - so you should have really informed them of up to date status - also just out of curiosity - after the mortgage and running coast where taken out of the money you got from the rent - was there any profit ? this would have been subject to income tax - so you do need to check you own records about this.
You will i am afraid have to bite the bullet and update them about all your personal changes

I dont think your agreement will let you keep £5k of equity,what it may say is that any property with equity of less than £5k is exempt from being realised for the benefit of creditors.

Any money back from selling the property will go to creditors.

Paul

I cannot see the mortgage company taking too much concern about the property rental - after all they have been benefitting from your income in terms of receiving mortgage interest payments.

Assuming that the property was properly disclosed within your IVA proposals, you should discuss the potential sale with your IP who will likely want all of your share of the sale proceeds to be paid into the IVA.

Thanks for the replies.

ginger3232 - I haven't really been making any money from the rental. My income from the rent is £5 more than the mortgage payment. And then I have to pay the maintenance fees for the block of flats its in which costs £60 so keeping my flat is costing me £55 per month.

I only kept hold of it because I couldn't afford to pay rent AND my mortgage when I get into debt.

plasticdaft - I think you're right about the equity. Maybe I am best holding on to it for now. I assume its unlikely I will be able to remortgage in my final year anyway.

Melanie - I hope you're right about the mortgage company not being too concerned. I will speak to my IP and just test the water with a few 'what if' questions to see if selling up is a good idea or not.

Again, thanks for the replies. I don't feel as though I can bounce things like this off my girlfriend as its already putting a bit of a strain on our relationship so having forums like this is very useful.

Neil you can bounce questions around here whenever you want,without judgment and usually between us all we can get some good advice out to you very quickly.

Good luck with your IP(remember they are there to help you out).

Paul

There's usually someone here who can help or at least point you in the right direction.