www.iva.co.uk

Hello

I have just entered an IVA but my circumstances many change in the near future.
My mother in law not well and my fiancee would like to move back home to take care of her. This would mean selling our house and me leaving my job.

We would release 11k of equity. I would like to take this opportunity to retrain as a plumber which would cost 6.5k and use the remainder as deposit on new house.

In the long run my earning potential would be a lot greater as a plumber. We would also be willing to keep the IVA payments the same during this period.

My question is would this kind of expenditure be allowed or does taking out an IVA mean that my career and personal development are also on hold for its duration

I look forward to your responses

Olly

Hi Olly
how will you survive if your fiancee is caring for her mother and you are at college?
Isnt the plumbing course to become a fully qualified plumber 4 years long? I know in my area there was a shortgage of plumbers,so loads of people trained,now there are too many!
If you sell your house in an IVa i think your IP would demand all the money,and they certainly wont let you go buy another house,they will expect you to rent!

Hello

My fiancee would work full time during the day, and so we would be able ot keep up payments.

The courses take 12 weeks, then I would then work with a plumber in the area to gain work experience. Partime college courses can take longer.

The part about the number of plumbers in a given area. You could argue that there is a lot of IVA companies about, but there is a small number of good ones.

Hi
Speak with your IP,they are there to assist you.
Do you have the final year equity release clause ?
Regards

Hello

Yep I have a fourth year equity release clause

Hi
I think that it is doubtful but hope I'm wrong
Regards

If you are going to buy a new property with the money retained from the sale, the equity release clause will transfer over, so all may not be lost! But you will need to persuade your IP that you can continue to make the payments, and probably suggest that the equity you use now to pay for the costs of retraining, comes out of your partner's share rather than yours.

I never say never when dealing with my own clients, but your IP may have completely differing views, so do be sure to have a chat with them soon to set your mind at rest and consider the options you have. At the end of the day family life is far more important than having a few debts.

I would expect your creditors would want the money now rather than run the risk of you not qualifying and therfore not getting the pay increase you were hoping for which could lead to them getting less contribution overall and not meeting the required propsed dividend.

You need to discuss with your IP who will be able to advise you properly.

Carl

Hello

Thankyou for your reply, the IVA is joint with my fiancee, but will call IP with everything crossed tomorrow.

Only other way I can think of is to put all money back into new property then take out secured loan on that.

Olly

Afraid you wont be able to take out a secured loan whilst in the IVA as this would be breach and how would you afford the repayments if you were still in your IVA ??

Carl

If you say that you can afford the ongoing IVA payments, then I still cannot see that there is a problem. The only issue is the future treatment of the equity, and the IVA must be flexible enough to cope with lifetime adjustments in circumstances.

Thank you remaining positive.

Have been doing some rough figures.

If I put 6k deposit on house with repayment mortgage, continue making payments of 435 on an iva for 28000. Get valuation after 3 1/2 years I would have made total payments of £18000, there should be enough equity in house to make early payment.

It is unlikely that creditors will agree to an early settlement if you already have the final year equity release provision. They would rather see you continue to make your monthly payments, and then get a lump sum right at the end.

If you only have 11k of equity in your house and you move, I should think at least 4k+ of that would be swallowed up in agents fees,solicitors,mortgage application costs etc.
I dont think there are many mortgage companies who will only let you put a 6k deposit down on even the cheapest of houses at present!...and as for banking on rising equity in the next 3 years..i wouldnt like to count on it!!