www.iva.co.uk

Am seriously considering an IVA.
Have credit card debt (£24K) which i cannot currently cover by my salary following hours reduction and short time.

not a massive monthly shortfall- but a shortfall and i have absolutely no cash to cover day to day living (don't't have 'luxurys such as sky tv ) and now can't afford petrol to get me to work.
I do have assets-car but need for work)plus have two rental properties ,and main residence.
Husband equally struggling to supportoutgoings/me etc.
Am proposing selling main property , (no equity in it-may break even with luck )moving into one of rental properties which would leave one 'surplus' rental property.
would like to hang on to this rental property-for maybe better times in 5 years.
This rental prop. has circa 12K equity in it.

How would an iva if accepted, impact on the 'surplus' rental property-either now-or in 5 years at end of an iva.
Would the equity in the rental prop. be taken (full or part) by creditors now-or in 5 years -when equity probably more.
Can they actually take the rental prop from me in an iva ?

look forward to reply/help

manty thanks

Hi and welcome, I wouldn't imagine that they would take any of the properties from you, I think what they would be concerned about is how you would manage your mortgage repayments if there were any periods of time where you didn't have a tenant?

If you are planning to sell your main property with no equity, you would be wise to do this prior to the IVA starting, would selling it cover the mortgage and fees etc? if there was any shortfall this could go into the IVA as an unsecured debt.

Any equity in any of the properties would be addressed at some point in year 4, they typically ask you to attempt to remortgage up to 85% LTV, if you cannot remortgage then usually you have to continue the IVA for a further 12 months

Hi Michelle

First of all DONT PAY ANY UPFRONT FEES

1. Car is allowed in IVA's (understood as necessity)

2. Rental Properties are allowed as long as they clear their costs. ie Rent covers mortgage & costs

3. Main residence coudl be possibly be kept dependant on your wishes BUT in an IVA YOUR HUSBANDS INCOME is taken into account. (Presume he has no unmanagabkle debt)

4. Presuming your creditors are financial institutions they would likely allow you to retain ALL properties but would invoke the Month 54 Refinance option.

5. No one knows what finannce will be available in 5 years time or if prices will have increased or decreased. the fact is that at the moment there are no high street lenders who will lend to refinace IVA's and even if there was you have to hit their income multiples - Very Unlikely.
IF YOU CANT REFINANCE THEY ASK YOU TO EXTEND BY 1 YR

6. If you defaulted in your IVA the supervisor could attempt to (if there was money in them ) to take the properties.

Await more responses or send me an e mail

Regards Paul

Have a word with an expert Michelle. Visit www.iva.com for a list of companies and reviews and give one or two a ring for some free advice or you could click on the 'Ask a Question' link on the left hand side of the page. They come highly recommended.

Paul - I'm afraid that unless you are an expert then email details for you are not available to posters and you won't be allowed to post them on the forum.

Can an IP really take your property if you breach? I don't recall seeing that in my proposal.

As I understand it, it doesn't have to be a high st lender who must provide refinancing of the mortgage in year 4, it could be any lender at all? I understand from one of our experts that there seems to be some movement currently and that there is a lender who will provide remortgaging now for people in an IVA under certain conditions, no-one knows what will happen over the next few years with regards the mortgage market so it shouldn't be taken as read that remortgaging is out and there will simply be a 12 month extension

You are correct. It doesn't have to be a High St lender but the only ones likely to refinance at the minute are the lokes of Blemain Finance whse rates reflect the lend. Check them out and you'll be amazed and I bet non of the experts cxan suggest otherwise.

Kallis I work in Insolvency and have done for 22 years. Perhaps you may state if any response I've given is incorrect.

Hi

If you have equity in a Buy to let in the final year of an IVA then it is likely that you will have to sell it and introduce the equity into your IVA. The remortgage and one year extension normally relates to the house that you are living in but not investment properties.

Regards

Thanks for clarifying that Andy, I understand that now and it makes sense.

Paul I don't think Kallis was suggesting any of your advice was incorrect, just that the forum rules state anyone can't just give out their email unless they are an expert or posters have given their express permission to be contacted.