www.iva.co.uk

If a house is jointly owned can equity be taken as part of an IVA set up by just one of the owners. The other owner doen't have any debts and is not party to the IVA.

Hi,

I'm no expert but I think that your share of the equity can be used for an IVA but obviously the other party would have to know about it and give their consent.

One of the experts will be able to give you sound advise shortly

Hi Paul

I'm sure Kezza is right and you would be able to contribute a 'share' of equity.

Unfortunately it seems to be a fact of life with IVA's that if you have joint affairs with another person it is very difficult to avoid them becoming involved to some degree, even if they are not a party to the agreement.

-Best

Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'

Yes,your share of the property may be subject to an equity release in the final year of your IVA.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

Hi Paul

You share of the equity to be taken into account under formal insolvency proceedings is calculated by taking the current value of your property and deducting the mortgage - which I assume is in both names. Take account of notional costs of sale of say £5,000 and divide the balance in equal shares. If either one of you paid the deposit monies individually, or have effected any home improvements by using your personal funds, then these can also be taken into account for the purposes of calculating equity.

Your partner's share of the equity is completely excluded from the proceedings.

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

Paul

All the advice currently given is correct.

I would add that there are some occasions when creditors actually will demand 100% of the equity in a property to be considered even if one party is not going into an IVA.

This can happen if a couple has been married for a long time. The arguement is that even though all the debt is in one party's name, it is difficult to imagine that both parties did not have the benefit of the expenditure that resulted in the debt. As such, the creditors demand that the full equity is considered.

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

jamesfalla wrote:

Paul

All the advice currently given is correct.

I would add that there are some occasions when creditors actually will demand 100% of the equity in a property to be considered even if one party is not going into an IVA.

This can happen if a couple has been married for a long time. The arguement is that even though all the debt is in one party's name, it is difficult to imagine that both parties did not have the benefit of the expenditure that resulted in the debt. As such, the creditors demand that the full equity is considered.

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

Could you please give more details about the situation where this has arisen? Could this also apply in bankruptcy?
Thanks

Hi Kathy

I personally have never seen creditors demanding an non-insolvent partner's share of the equity, so James will have to comment on that one.

If this is happening in the marketplace, then I find that quite unacceptable and would never encourage a client of mine to agree to this, which goes against the majority of insolvency caselaw and legislation. Creditors need to abide by the rules as well as debtors.

Under bankruptcy proceedings, the principle I referred to in my earlier response applies.

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

Hi all

In bankruptcy it is all fairly clear cut.

IVA's are very open ended, meaning that creditors can theoretically request any modification they think they might get away with, regardless of actual dividing lines of ownership.

I seem to remember there was a post in the forum recently where it appeared that a wife being asked to contribute equity from property in the sole name of her husband, although we never quite got to the bottom of that one.

I assume the option is open to reject the modifications, presumably at the risk of losing votes.

-Best

Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'