Will I be able to get an IVA?

[chuckandbb]

Hi folks, have been looking around this forum and obviously am in some trouble.

I have £110000 of unsecured debt am currently "borrowing" £1200 per month more than I earn to pay these off. I currently take home £2100 and my wife £700.

I am in regular employment and calculate approximately £500 excess available to pay creditors. I have included my wife's income etc. My creditors are mainly credit cards (6) with £37000 on 2 personal loans. Your calculator suggests I will need £625 per month

Any thoughts? I am aware of the pros and cons of an IVA, could remortgage to pay this if they would let me (unlikely as it would be too much multiple of income), but wish to avoid bankruptcy.

Thanks for your help in advance.

Pete

[jpj]

Hi Chuck and bb... I owed £110,000 too, Ive been in an IVA for 2 years now and currently pay £600 a month.
My IVA has gone fine,but I sometimes wish I had now gone bankcrupt..5 years is a long time,bankruptcy is over and done with in a much shorter time.
I suggest you seriously look at the pros and cons of both.
Im paying 18p in the pound into my IVA, some now demand at least 40p in the pound so you will obviously need to investigate IVAs in a bit more detail.
Good luck

[Adam Davies]

Hi Pete
How much equity do you have in your property ?
How much of the 110k is joint with your wife ?
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

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]

I am sure that payments of £500 will be acceptable, as you will be required to raise equity at the end of the arrangement which can top up any difference to effect a minimum dividend. These days creditorsa are accepting dividends of lower than 25p in the £, and I don't really use that as a marker any more, so perhaps the calculator used by iva.co.uk needs modifying Andy?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[northumbrian69]

Hi chuckandbb
My circumstances are very similar to yours, my wife and I had joint unsecured debts of £115,000 and a joint monthly income of £3100.
We have been in an IVA for 9 months now, we pay £770/month (32p in the £ after IP's fees) and have a year 4 equity release clause, at the time our IVA was accepted there was only £8000 equity available on our house.
You don't say how much equity is available on your house but based on the figures you have posted I'm sure you would qualify for an IVA even if you had limited equity available.
Post more info and I'm sure one of the forum experts will point you in the right direction.
GOOD LUCK

[chuckandbb]

Thanks for all your help so far...

Just to add to the picture approx £90 000 of the £117 000 owed is mine alone, the rest is a joint loan with the wife. We have approx £150k equity available in the house, of which half is mine.

I hope this helps and again, thanks for all your help.

Pete

[MelanieGiles]

It seems that you are insolvent but not your wife, given your equity postiion and the amount you owe to creditors. Your wife ought to look to her assets or individual disposable income to deal with her debts (which will injclude the entire joint loan) whereas you may well wish to offer a compromise settlement based on ongoing contributions, equity release or both.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[chuckandbb]

Sorry Melanie. does that mean I have to go bankrupt, or is an IVA still possible?

Thanks

Pete

[Adam Davies]

Hi
No an IVA is possible,either a monthly payment IVA followed by an equity release or an equity release now,followed by monthly payments.
You may even be able to offer a full and final IVA if you could raise your 75k equity via a remotgage,however as you say income multiples may hinder this.You also need to allow for repayments on your wifes 27k of debt out of her income.
Is selling up and clearing all your debts not an option ?

Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

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

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

[chuckandbb]

OK Andy I am stupid, our equity is actually approx £250k, of which half is mine. Now ballpark calculations suggest that my equity would cover the debts if I can get a mortgage!

Our income is £39k with £34 being mine and the total mortgage commitment would be approx £230k (we have £120k of a repayment mortgage outstanding)

Do any companies lend on the basis of 6X joint income.

I would expect to only be able to pay interest only on the £110k
Sorry for the endless questions. I am keen to avoid an IVA/bankruptcy.

[MelanieGiles]

Hopefully one of the mortgage brokers who regularly post on the forum will be better placed to deal with your query, and of course additional borrowings do have to be affordable into the future. With that level of equity, I feel that you would be far better off downsizing and using some of the equity to clear your debts. A mortgage commitment of 6 times your salary is a dangerous step to take.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi
Just to add that when your share of the equity is greater than your total unsecured debts you are not technically insolvent so an IVA would not be possible.
The danger of stretching yourself with a large mortgage is that you could end up running up unsecured debt again just to make ends meet.
It really is worth seriously thinking about downsizing.
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

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

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

[chuckandbb]

OK, folks, many thanks for all your help

Pete