Can I buy a second property during an IVA

[London Coool]

I have just started an IVA and after one year I am thinking of meeting my IP after one year with a view of purchasing a second property through a special deal with my Broker.
He has new built property for sale, the 10% deposit,stamp duty,legal fee's and valuation will be paid for by the builders.I dont put in any money at all.The rental income will cover the mortgage payment+insurance and I will not incur any additional expenses or profit.I had acquired a second one already but had to cancel it due to my ongoing IVA application...would IP's accept or frown at such an opportunity? Would it affect my current IVA as it wont affect my IVA payments ?

[MelanieGiles]

Hi again

So long as it does not disturb your IVA payments, in theory there seems no problem - but do consider the risks if you lose your tenants.

You will need to declare the rental income and associated costs to your Supervisor on an annual basis, and any surplus will of course need to be paid into your IVA. You will also not be able to use IVA monies to supplement any shortfall if you are left without tenants.

On balance, if I were your IP I would probably decline your request for additional credit on the basis that it gives creditors no advantage. If, however, you were proposed to sell or remortgage this property at the end of the IVA term to enhance your offer to creditors, then I might be persuaded!

Talk to your IP, they may have differing views.


Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk