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i have recently purchased a property to get on to the housing ladder. to raise the needed deposit i have used interest free credit cards and a consolidation loan. I have now rented my property but the rental income does not cover the mortgage payment completely.I now find that my monthly repayments and my income do not balance and i am sliding into more debt month by month. If i qualify for an IVA how will this effect me as a property owner as i do not want to loose my first purchased property.
Thank you for your help.

Hi Micha.
It depends if you have any equity in the property. If this is more than your debt you are not insolvent. If you put more details on here Im sure one of the experts will give you the advice you require.

steve

Hi Micha

Assuming that there is equity in the property, given that you paid a deposit, this equity will be available to your creditors under bankruptcy proceedings. As such your creditors will also expect to see it introducted into an IVA.

As your income from the property is lower that the outgoings, creditors will expect you to sell the property in an IVA, as otherwise they are directly funding your investment. You will probably also be required to make monthly contributions based upon your disposable income.


Depending upon the amount you actually owe, my advice is to sell this property which has become a bit of a millstone, and pay as much back to your creditors as you can afford. Getting on the housing ladder is important, but not at the expense of creditors who you cannot afford to pay back. If your are still left with debts in excess of £15,000, an IVA remains a solution open to you.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Micha

Is it possible for you to move back into the property - thus saving yourself rent elsewhere and then earning some extra income from renting out one of the rooms to a lodger? This might give you the extra income you need to get back on the straight and narrow.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk