will going into a IVA programme make it worse?

[curli]

I am currently in a debt management programme and have been for 2 years. I have been told from the company I am with we have 8 years left with them. But now we qualify for a IVA and could be debt free in 5? However we are worried as we wish to sell our house and move next year as we have lived in it for 9 years and will have a good deposit to put down. Will our finacial situation at the moment stop us getting a mortgage? will going into a IVA programme make it worse?


rh

[mikebdomain]

When you enter an IVA there is a clause in the fourth year for you to remortgage to release equity to pay towards the IVA.

If you do enter an IVA I doubt if an IP will agree to you selling the property only to spend the equity on another property prior to the forth year, however there are IVA experts on this forum who will be able to answer that more clearly.

An IVA will not stop you getting a mortgage and will not have a massive adverse affect as long as the IVA has been carried out satisfactorily.

Is there enough equity in your property to raise enough for a deposit AND pay off your debts?

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[iva_squirrel]

Good morning Curli,

Welcome to the forum.

Could you please tell us how much your debt and the equity on the house is?

Kind regards,

Julia Simavi

Shortlisted with special commendation for Debt Counsellor of the Year by Credit Today Awards 2007

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http://www.supersonicsquirrel.net/julia ... rofile.asp

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[Adam Davies]

Curli
As Mike has already said the main difference between an IVA and DMP is the fact that you will have to release some of your equity,whereas in a DMP your equity is safe.
Personally if I had a choice between a guaranteed 8 year DMP or an IVA I would opt for the DMP and keep the equity in my house.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[curli]

My Debts is about 18k and our mortgage is 52 and we had it valued for 90. We are with gregory pennington and cant understand why they have had us on DMP for 2 years and now are telling us we can pay it all off in 5? why didnt they just put us on an iva in the first place? I dont understand about realsing the equity in our home in the fourth year?? could someone clarify??

rh

[Adam Davies]

Hi
Well with equity of 38k and debts of 18k you are not insolvent so an IVA will not be possible.Stick with your DMP and you can always release enough equity to repay these debts when you move.
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[curli]

Thanks
i'm dissapointed with DM company for trying to push in this direction when its not nessary as they have tryed to make us consider remortgage too so know how much equity we have in our home!
Very confused
Thanks


rh

[Adam Davies]

Hi
I think that the people "advising" you are poorly trained.
Make no mistake that they would earn far more from you[well from your creditors] in an IVA than they would in a DMP
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Oliver]

With the equity you have in your property an IVA is not an option becasue you are not insolvent. You can therefore continue paying into your dmp or look into the potential of remortgaging and consolidating this debt into a secured loan.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[mikebdomain]

If consolidation is the route you are considering, remortgaging may well be cheaper than a secured second charge, both in fees and interest rate.

If however the DMP is running OK, and you, and your creditors are happy with the payments, there is no feasible reason to turn unsecured debt into secured debt.

If, however creditors are starting to kick off and it looks like they are moving towards court enforced charging orders, it's time to start looking at releasing some of the equity in your property as long as there are no affordability issues with paying a larger mortgage moving forward.

Just as a matter of interest what is the interest rate you have on your current mortgage?


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[curli]

Thanks for the advice! Im not sure what our mortgage rate is! We are with abbey and have always been we pay £470 a month on 52k?

rh

[Adam Davies]

Hi
That seems high.
I,m sure with such a good loan to value ratio you will be able to get a better deal than that.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

Current creditor criteria indicates that creditors are unlikely to accept an IVA converted from an ongoing DMP arrangement if the debt could be paid off within 8 years.

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

[mikebdomain]

The rate you can get NOW depends obviously on your wants, needs and circumstances. The amount you are paying does seem a tad high, but it is difficult to work out what your actual rate is withough knowing what the original term of the mortgage was.

e.g.
£52000 over 25 years at 470.07 = 9.8%
£52000 over 15 years at 470.08 = 6.81%

I would suggest you speak to a mortgage advisor who can carry out a full fact find and be able to advise you of your options. All FSA regulated mortgage brokers will give you this advice free of charge.

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Specialising in adverse credit.

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