www.iva.co.uk

This is a bit complicated so please bare with me.

Last week my mortgage provider, Halifax informed me that from September 2012, my mortgage will revert back to a capital & repayment as I would of been on interest only for 3 years by then and that is the maximum length of time they will allow it . The repayment will go from £640 to £1400!!!!. Now what with my secured loan - £500 and my IVA - £370 plus everything else I need to pay there is no way I will be able to afford it so something has to give or default I should say!!

So after careful consideration I have decided to sell my house, I have estate agents coming round next week. I have informed Pay Plan and I will be get getting settlement figures from the mortgage and secured loan company to give me a rough guide on how much I need to sell the house for.

Now this is the 'dream' bit. My Boyfriend's mother and father have offered to GIVE me and my boyfriend £40k to go towards a deposit on a new build property, and I put £20k towards the deposit aswell, so in total £60k deposit for a house at a maximum price of £250,000. She will have to be on the mortgage for tax reasons, something to do with taxing money if it is gift. She also wants me and my boyfriend on the mortgage aswell as we would obviously be paying for it and the house would be ours. It will be affordable because I will be debt free, HOWEVER I am not naive enough to think it will be plain sailing, so I what I want to know is:

a) I have calculated I owe approx £14k left in my IVA, baring in mind I need £20k to put towards the deposit, and IF I sell the house at what I want for it I will have more than £20k spare. Do I offer the full amount, or less and also would the creditors want more than the £14k, ie would they think " oh she has made £30k profit on that sale, we want more than the original agreement"

b) I cannot see any lender giving me a mortgage, even though I would of paid off my debts once I have sold, my credit file is and will still be in a poor state, although technically I will have no debt. Will I be a hindrance when applying for a mortgage with my boyfriend, and should it just be the both of them on the mortgage and put my name on the deeds in a couple of years?

After speaking to the Sales Manager today at the new build site, she said that it would be best for me to sell as soon as I can and try not to get into a chain, then reserve one of the plots as completion can take place about 4 weeks after that, so rent in between.

This is an opportunity for a new start, a clean slate with no credit, and being the pessimist as I am I just know there are going to be some knock backs coming my way due to my adverse credit. My boyfriend's credit rating is not good, but better than mine!! We both have good jobs, and if we lived in a new build paying a mortgage of say £900 a month, and taking council tax, utilities etc etc into consideration, both of us would still have a £1,000 each as disposal income. At the moment all of my wages are going to pay back debt and I'm struggling to get to work as I can't fill up the car.

So guys I can see a glimmer of a better life, a very special chance has been given to me, I just can't see a smooth path to it yet. Has anyone got any advice for me, am I being too negative here?

Thanks

Nikki

Dont forget you will owe all the money and fees in the IVA - the IVA company would have placed a restriction on selling the house - so they will know about this - any money is likely to be expected to be paid across into the IVA - until you have paid all the debt + fees back

Hi Ginger

So if I offer to pay the balance owing which is approx £14k, would that be sufficient? Can they ask for more?

Yes - you will always owe the full amount - when you go to sell the house the IVA company will have to give permission to sell - so if there is a large amount of equity, this is likely to go into the IVA.

You do need to explain your plans to your IP -

You stated thay that your BF credit rating is also poor and you will have a IVA on record- so you may need specalist advice on a new mortgage

Does the 14k owing on your iva include the equity you pledged?

You may be able to negotiate aF&F offer but would be in a stronger position if you did this before selling your house. If you try to do this with the cash in your bank, the creditors may see it as an asset due to them in full.

Hopefully, one of our professionals or a poster who has been in this situation will be along to clarify absolutely.

If I were you I`d contact Ryan at Zebramoney - He`s listed under the "ask the Experts" section.I had a chat with him before taking out our iva and he explained loads about selling houses/mortgages/f&f options. We`d use his expertise in the future if the opportunity arose and he gives specialist advice not available on the high street.

I think IP for case specific advice is needed as well as specialist mortgage advice.

Maybe you could sell your property and pay off your IVA 100% and get the fresh start that way assuming you have enough equity? MIL and partner to go on new mortgage?

You can always go on in years to come when credit files are fixed. x

The £14k is what I have calculated what I still have to pay based on the figure at the start of my IVA and that includes fees and projected equity I would of have to release in year 5. Maybe I am being a bit dumb, but Ginger you said the full amount, is that 100p in the £ or the 35p in the £ I am paying now? I intend to offer to pay what is left to pay in my IVA, ie 35p in the £, what I am concerned about is, can the creditors ask for 100p in the £ as I will need £20k to go towards the deposit and obviously selling costs needs to be added to that. I don't want to offer less than I owe but I am concerned that they would want more than what is in my IVA if that makes sense?

The full amount is all you debt (the total amount you entered the IVA) +fees.This is what you owe!! Write off of debts only occur at the end of the IVA - this only happens when all the terms and conditions of the IVA are met .
You need to have a conversation with you IVA company /IP about the best way forward

The full amount is 100p in the pound plus fees. Offering the 35p in the pound should be ok as this is what the creditors expect to receive.

As Lesley says, speak to your IP as they will be able to advise properly on your circumstances.

Hi

I think Broke on London has given you the best route forward in this, you can through your IP offer a full and Final settlement using money introduced by your family members,a good deal for creditors in getting their money now, get the IVA settled so your IP is out of the picture then go forward with your plans.

Hi Daniel

The money from my MIL is to go towards a new mortgage, not to pay off my debts, that is out of the question, the condition is that I put £20k towards the new mortgage aswell from the proceeds from my house. I am totally responsible for my debts and me only, and there is no way my MIL will give me £40k to pay off my debts. I have emailed Ryan as advised and I have emailed my case officer at Pay Plan for advice aswell

Maybe you need a good chat with your IP. Every pickle has its solution. You will more than likely have a charging order on your property so can't just sell and do what you like with the equity. I know you obviously thought about this and can see a glimmer of hope but I'm afraid you would benefit from a chat with the professionals.

I saw a lovely house and see a glimmer of hope about 2 years into my IVA but its the fact that you still owe all the debt until the end of the IVA that stopped us as I didn't have enough equity to pay it off.

Good luck

Hi

I can understand that however I was hinting at 14k to pay off your debts not 40k, I cannot see you being able to only offer creditors 14k after you sell your home I cannot see it being acepted dont forget your IP has a duty to maximise returns for creditors

I know you have this dream of a fresh start but you do still owe 100p/£ and need to think about all the options of how to clear your debts so you can then buy the new house. Offering a % of your equity as a F&F before selling your house means your are in control of the situation. If you have the cash in the bank, the creditors are in control.

Or your mother could offer a F&F amount and then you repay her from your equity so you all put in the amount agreed into the new mortgage. It's worth not dismissing any options.