www.iva.co.uk

I own a flat which I rent out, the main reason I need an IVA is that we got a good offer on a house and started paying 2 mortgages whilst trying to sell the flat, Then the housing crisis hit and we could not sell the flat even at a lower price, so instead of making money from the flat sale we got in a lot more debt whilst paying both mortgages, I now am renting the flat out and the rent only covers the mortgage and maintenance for the flat, will this cause a problem?

P.s I'm new here .... Hello

Hi Jakes and a warm welcome to the forum

If you are covering your costs on the investment property, this may not necessarily be a problem, but how much do you owe to unsecured creditors? And how much do you feel you would be able to repay on a monthly basis to your creditors, if you were to consider the merits of an IVA?

Hi Melanie, thanks, Between me and my wife we owe about 28,000 and I could afford to pay 200 a month and then could live ok (on a budget) if I earn extra (overtime and I am thinking of getting a second job on saturdays) I could pay more, my wife I currently out of work looking after our baby and her Maternity benefit stops in a few weeks at which time my outgoings will be much more than my income and some of her payments for a credit card are in arrears (its very tight even with her benefit at the moment). I have tried to re-mortgage but we have a bad credit rating. I spoke to someone at "Debt Advice Trust" who said an IVA would be the best option.

Hi Jakes, and welcome from me also.

You need to take advice from an Insolvency Practitioner. Visit www.iva.com where there are reviews of insolvency specialists.

Or, you could ring Melanie, who has posted on this thread. She comes highly recommended by a large number of members. Her information can be found at the bottom of the post.

Whoever you ring will go through all your options with you and find a solution that is right for you.

At this time it is best to consider all options, and these are best explained by an insolvency practitioner who will not try to steer you down one route.

Thanks for all your help, I have been looking into other options for a while, The Company trying to get me an IVA said I would be making my payments for 4 years then they would make me re-mortgage an any equity in my house I would need to pay them, If there was not any or not enough to pay off what I owed I would continue with the IVA for the 5th year, Is this normally the way its done? I was just wondering if they would make me get equity out of the flat I am renting out too, or if this will be left alone as its a buy to let? I have not signed anything yet but are all the companies which offer an IVA the same or do some do things differently?

Usually an IVA is for 5 years (although some are now running for 6 years), and you will try to remortgage in your 4th year. If you are unable to do this, most IVA's now run for a further year before finishing.

I don't think you have to pay all the equity across, just a portion of it. Also, if your remortgage payments are more than 50% of your IVA payments, you won't have to remortgage but the IVA will continue for the extra 12 months.

I don't know about the flat, but I am sure Melanie will be back on again and give you the answer

I would imagine the equity in the flat would be wanted(a portion of it at least),whether its buy to let or not. Your creditors wont care,they will just see it as an asset and a way to claw back some extra dividends out of you.

You will find that regardless of how your IP presents the IVA for you, creditors will modify it to run over five years, with a revaluation of the property in month 54 and the raising of equity based upon new borrowings of a maximum 85% loan to value.

Thank you, I guess I need some more advice before signing up to Debt Free Direct straight away. I looked at the IVA.com site and it Does look like a IVA is the best option for me though. Its just a bit hard knowing who to talk to etc.

There is lots of choice on iva.com Jakes, as they list most of the 1,800 insolvency practitioners in the UK! If you are happy with the advice you are receiving from your current provider, then there may be no need to shop around.

Thanks, Am not sure what will happen tho as you cannot release equity from a buy to let mortgage?

Why not?

When I tried to re-mortgage the flat (which I could not do due to bad credit rating) I was told no lenders let you release equity on a buy to let mortgage.