iva`s and seperation

[whatamess]

i am 5 months into a 60 month iva, my wife has the same
she has decided to seperate and i wondered how this affects our ivs`s
we have a house with 30k equity and a year 4 equity release

we plan to move into seperate rented accomodation and will have no assets to speak of

i dont yet want to speak to my ip yet and value any advice

[ianmillington]

Hi whatamess

It depends how your IVAs are structured. If they are interlocking then unless you can both agree to keep them going as is then they will need to be severed. Also, you won't be able to simply sell the property without reference to the Supervisor. I see the need for variations.

If neither of you have any hang-ups about retaining equity then it may make sense to vary the VAs on the basis that the whole of the equity (less removal expenses) be introduced in full and final settlement. Clearly that depends on

1. The total value of your creditors (i.e there will need to be a sensible dividend)and
2. Your projected income and expenditures after the moved to rented accomodation.

It will help immensely if both of you are in agreement as otherwise your IP will have difficulty promoting variations, as a conflict of interest could arise if one IVA were rescued at the expense of the other.

Hope this gives food for thought.

Ian

[Hovish]

Hi,

I am really sorry to hear you are seperating. My husband and I seperated last year before we set up our IVa. We decided we would be supportive of each other throughout the IVA. He pays 200.00 per month and I pay 66.00 as I am not working and have two children living with me. Our company took both our income and expenditure as a whole then worked our how much we could afford ie. two lots of rent, bills etc. It has worked well for us this way, but you can seperate you debts,and be responsible for your own. After 9 months apart my husband and I are getting back together, our seperation was hugely due to money, but we now see a way forward and debt hopefully in the passed. Seperation is really hard, but time is a good healer good luck.[:)]

[ianmillington]

Sadly, this is something I see all too often in my professional life - insolvency and relationship problems frequently go hand in hand. All that we IPs can do is to see if there is something that can be done to fix the financial end of it so as not to make things worse. Creditors are generally supportive too so I have strong grounds that the IP can do something to help in this case.

Good luck, and to Hovish too.

Ian

[whatamess]

ian

both incomes and expenditure are taken as one
(i assume thats what you refer to as the structure)
i dont think there will be any equity left due to the total debt of £120k with 32p in £ (averaged)
as far as i can see a full & final seems the best route ( the iva 4 year clause was for 85% of available value at the time, would this climb to 100%) also we would need deposits and start rent for 2 sets of rented accomodation, do you know if this could be allowed from the equity, 2 young kids to think of

thanks hovish and good luck

[ianmillington]

Hi again

What you both need to do is work out your separate income and expenditure figures . I anticipate that this will either show no ability to continue to make contributions or a much reduced ability to do so.

In principle if you were to propose a full and final, this would involve sale of the property and introduction of 100% of the equity but it would be reasonable for you to expect to retain something from the sale proceeds for you both to move, including your rent deposits. I think that's all you could reallistically expect to get out of it, apart from the fact that you will be debt free once it's done.

Prospects of the creditors accepting? So long as it's clear that neither of you continuing to contribute, pretty good I would think, so the best thing to do is to get your numbers worked out and speak to the Supervisor.

Hope this helps

ian

[whatamess]

thanks ian that was very helpful
and i think the best route

[ianmillington]

A Pleasure. Good luck, and let us know how you get on

[keh]

Welcome whatamess

My partner and myself split after 2 years into the iva but agreed to keep paying the agreed monthly payments between us

Talk your IP and Partner to make sure that payments can still be met

[whatamess]

thanks keh

my problem is our 2 salaries are all taken with the mortgage,

2 iva payments and running a house and 2 kids, we literally have maybe

£30 left between us at month end and to introduce another set of

accomodation costs (£700-800 pr month inc bills) means i would not be

able to make the iva payments which is why i hope the full and final

with the remaining equity will be sufficent to clear us,

we shall see, i will keep this updated

great forum

[keh]

Ask you ip about a variation to include an extra year in payments to take into account your reduced payments

This is another option

[whatamess]

it has now become apparent that by the time i pay for somewhere to live and i make a contribution to my ex partners rent i will have nothing left to pay my iva, i have done a revised i & e and sent off but not yet heard back, my top priority is accomodation for my 2 children and ex and also for me, as our only asset is now to be sold with selling costs and
solicitors fees to get divorced taking over half the equity there will be very little for the creditors, is going bankrupt an option after the
sale of the property as i am not going to be able to continue to afford my iva, any advice would be welcome

[MelanieGiles]

If you declare yourself bankrupt, then the whole of the sale proceeds will vest in the Trustee and be lost to pay your creditors.

Taking Ian's advice to sell the property and offer a full and final settlement, I have done this several times and have been able to negotiate some of the money being reserced to meet relocation expenses. Certainly worth a try, as setting up two new homes will bring added expenditure.

Your creditors will understand your change of circumstances and be sympathetic - at the end of the day bankruptcy will bring them no better return than you can offer from your house sale.