what would happen to the Charging Order in IVA?

[noggins]

I am in a Debt Management Plan (with PayPlan) and have a Charging Order on my property from one of my existing creditors. If I wanted to move to an IVA, what would happen to the Charging Order? Would the debt be deemed as settled under the IVA, or would the charging order still stand and thus reduce the potential equity in my property?

[debbiw]

Hi Noggins, Not 100% sure, but i think you would still have to pay the charging order and the IVA, as the charging order is secured on your house. One of the experts will confirm this though. - Welcome to the forum anyway x

[zoe]

The debt would become "secured" therefore cannot be included in IVA or Bankruptcy

[noggins]

Thanks for the swift reponse. If as you state, the debt were to become 'secured', this would then need to be settled in the event of the property being remortgaged towards the end of an IVA - Yes ? If this is the case, I will not have sufficient equity remaining to be able to enter in to an IVA, and as I am looking at 20+ years on a Debt Management plan, would it be prudent to consider biting the bullet and going for Bankruptcy now instead?

[zoe]

Hi there
this is a decision only you can make im afraid!
I would take advice from 2 or 3 companies as to your best way forward

[Adam Davies]

Hi
You do not have to have equity in order to enter into an IVA.The fact that you have a charging order may reduce your equity enugh not to be able to remortgage at the 54 month mark and will just mean that your IVA will finish at the 60 month point.
Regards

[Oliver]

An equity release will only come into play if there is sufficient "releasable" equity in the property. If there is not then your creditors are likely to be content with 60 months of disposable income payments, notwithstanding the fact that your property will be revalued at the end of the IVA.

You need to ensure that your disposable income payments can cover the minimum return for your creditors (the majority of creditors look for 25% of the debt plus IP fees).

[MelanieGiles]

As the other posters have stated, the Charging Order debt is secured against your property, and you may or may not have to make ongoing payments to that creditors - some creditors do not actually demand ongoing payments and some do.

How much are you paying into your DMP and how much are your overall debts. If the DMP is going to take more than 20 years for you to repay, an IVA will conclude much quicker but you will have to agree to explore releasing equity during the final year, based upon lending of 85% loan to value.