wondering whether to settle my wife's debt

[smw]

Hello, my wife has an IVA from several years ago before we met.She is making monthly £250 payments via CCCS and owes around £5000.She moved in with me when we got married ,hence the mortgage is solely in my name.

We would like to consider moving house in the near future,with a bigger mortgage.Ideally a joint mortgage would be necessary for adequate funds. I'm wondering if it is worth me lending her my savings to settle her debt in full.I appreciate that even when marked as satisfisfied,the details would stay on her record for several years.

Would we be able to realistically apply for mortgages in joint names immediately after settlement of her IVA? Or would we be restricted to certain lenders with higher rates and charges anyway?- Alternatively I could settle her debt and apply singly but list her salary as additional income and we wouldn't have the monthly £250 deduction from any lenders calculations.

If left to nature, her debt is still 20 months off being repaid.I'm worried the the housing market may have left us behind by then and I'd probably be paying at least £15000 more for the house ,if I could borrow that much.I really want to get things moving ASAP.Any advice please ???

[MelanieGiles]

Hi smw

Seems like a good idea to me if you can afford it.

You need to take specialist advice with regard to the mortgage, but go for the cheapest interest rate. IVA clients only seem to get penalised by 0.5% these days, so there is little difference. Go to a broker who specialises in this type of mortgage.

As a practising IP, I actively encourage my clients to end their IVAs early where possible - even though this results in lower fees! Make sure your wife's IP works out a settlement figure for her before you consider matters further, and a variation meeting will also be needed - probably at her additional expense.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Oliver]

Hello

This is Thomas Charles' 500th post on the forum, I wonder if we get a prize or a badge for that!

I would agree whole heartedly with Melanie that if you have the ability to do so, paying off your wife's IVA early is the best advice.

With regards to any potential mortgage you are correct in saying that even if you finish your Wife's IVA early the details of her IVA will still be on her credit file. This will remain there for 6 years from the inception of the IVA and will give your wife an adverse credit score. However, due to the fact that secured loans (i.e. mortgages) are underwritten completely differently from unsecured lending you should have no problem finding someone to provide you with a mortgage. I doubt you will be able to use a “high street” bank but in the current competitive mortgage market I would say that you would be likely to find a mortgage broker that could help you with you paying no more than c0.5% above any "high street" deals.


Best Regards
Oliver

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

[MelanieGiles]

Congratulations Ollie

You clearly do not have enough work to do on the day job, which is why you are ahead of all of us in the league tables! Seriously your input is absolutely invaluable and long may it last!

Mel

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk