What would happen if we moved abroad ?

[mss]

What would happen if I took out an IVA and before the period was up moved abroad? We have a vague plan of moving abroad in about 3 years.

[MelanieGiles]

Hi mss and welcome to the forum

No problem at all - you simply continue to make your payments electronically into the IVA account from your new home. You would need to advise your IP of your new address, and be able to send and receive information from time to time, but apart from this, so long as your income and expenditure is not affected, there should be few problems.

[mss]

Can I ask another hypothetical question. Assuming at the point I take the IVA out there is no capital in my house (or very little), what would happen when I did sell? Would any leftover monies be taken up towards the IVA or would I be able to use the probably small amount leftover towards helping to mvoe away?

[Adam Davies]

Hi
If your property is not part of the IVA[very unusual these days]then you can use the money as you wish.If it is part of your IVA and you sell then you would have to discuss with your IP as to how much of the sale proceeds you need to pay into your IVA.
Regards

[mss]

I have a few more questions. Would it be possible to get a 'quote' and to clarify that any small equity in my house would not be included? Also how long does the process take? I also wanted to clarify if an IVA is taken out as a couple or just one person? My last question would be a worst case scenario and if after I did move abroad and struggled to keep up repayments, can you clarify what would happen?
Thanks

[MelanieGiles]

You will have to agree to an equity release provision during the final year of the IVA, and the whole process should take no more than 8 weeks providing your are able to provide your IP with a full set of documents at an early stage of the process.

Most IPs will confirm the level of their charges to you, but this can only happen when they have detailed knowledge of your circumstances. If yo both have debts then you will need an IVA each, but these can be made mutually dependent with one aggregate payment being taken for all creditors to share from.

If you enter into an IVA and subsequently struggle to fund the repayments, then the IVA may fail and you could either enter into a DMP or declare yourselves bankrupt depending upon circumstances. The original terms of the IVA could also possibly be varied.

[mss]

I am confused by the response to release equity in the house in the final year as my previous question had been about selling the house prior to that. I would effectively not have a house to sell as am likely to rent initially if we move away. Also in terms of a 'quote', I meant in terms of what you would be likely to repay, not pay an IVA agent.I mean an example of what repayments would be?
Thanks

[MelanieGiles]

With regard to the property, yor IVA would have to include the equity release clause as it is standard protocol, however if you were to sell the property due to a relocation, there could also be provision for this made as well. If there is limited equity, this is unlikely to be of great issue.

With regard to "quote", this could only be done if you contacted an insolvency practitioner and they received specific details of your income and expenditure. Most reputable practitioners will do his for you free of charge if you make contact with them.

[mss]

This seems to contradict the previous response but can I also clarify what would constitute 'limited' equity? If I could give an example of potentially having £25,000 left from the sale and after paying off secured loans/mortgages from a £250,000 property, but having an additional £65,000 worth of debts? Is it helpful to give an example? What would happen if I did not have the property then? Could I wait to take out an IVA until after it is sold? Do you advise anyone to use as an IP?

[MelanieGiles]

Let me be clear. If you are property owners at the outset of an IVA you will have to agree to release equity at the end of the IVA whether you intend to sell the property earlier or not.

Current IVA protocol states that in the final year of an IVA, you agree to have the property revalued and seek additional funding based upon 85% loan to value, introducing any surplus monies after discharging your present mortgage into the IVA for the benefit of creditors. This implies that you are allowed to retain 15% of your interest in your home.

If you choose to sell your property during the IVA, you may be asked for more of the sale proceeds, so if you have already agreed to raise funding to 85% loan to value at the end, you may be able to negotiate retaining some of that money.

It is difficult to advise you in detail on such a limited forum, and I cannot advise you of an IP to select as I am not allowed to promote myself or my firm. There are reviews of insolvency firms on the iva.com website, where you can read reviews of the services provided and feedback from existing clients, which might be helpful to you.

[mss]

Should I wait until my house is old and then take out an IVA? Can I take one out after I have left this country?