your help would be much appreciated thanks

[loopylou]

hi i owe about fifty thousand pounds in unsecured loans and credit cards.i own my own home which has about ninety grand equity.however i have been made disabled in a crash and have a spinalcord injury. i am long trm disabled with a 16 year son recieving all of the disability benefits. would i have to sellmy house or a charge be made on it for an iva or anything. or would i be able toenter an iva monthly repayment for few years or my friend said he would borrow me an amount to pay the iva in onebig instalment. your help would be much appreciated thanks

[MelanieGiles]

Hi loopylou and welcome to the forum

Unfortunately you are not insolvent, and an IVA is unlikely to be of use to you. How much could your friend offer you to offer to creditors?

[loopylou]

hi thanks for reply. by insolvent do you mean bankrupt. why would an iva not be suitable for me? my friend is offering ten to fifteen thousand if it meant the end of all my debt. thanks

[MelanieGiles]

Because you have assets worth £90k and debts of only £50k. You are not therefore insolvent and do not therefore meet the criteria for an IVA.

[loopylou]

thanks for reply.i dont understand if i am not eligable for an iva how could you propose an iva thanks

[aguise]

Hi loopy lou
Insolvent means your outgoings are more than your incoming income. If you have debts of £50,000 and have £90,000 equity you are not insolvent as you have £40,000 more than your debts. If it were the other way around you would be insolvent.
Hope that helps.

Ang

[ianmillington]

Hi Loopylou

To do an IVA you have to be able to petition for your own bankruptcy i.e you have to be insolvent. There are 2 insolvency tests:

1. Your assets are less than your debts. As Melanie explained in her earlier post, because you have net assets of about £40,000 you don't fit this criteria.

2. If you are unable to pay your debts as they fall due then you are technically insolvent. However, if you were to petition the Court for a Bankruptcy Order solely on those grounds, I think the Court might be reluctant to make the order. If it did, you would have embarked on a very destructive and expensive process which would place your home seriously at risk.

An IVA? Theoretically you could try but I don't think the creditors would accept it. It would simply result in you still having to pay your debts in full, and the Supervisors Fees into the bargain. They would probably view the Insolvency Practitioner in a similar light as you would a dentist who performs unnecessary fillings.

It seriously looks as if your best option is to sell, unless you are physically incapable of moving house. You could look at one of those equity release schems whereby you sell the property to someone who then lets you live there. The downside is that you won't get more than 80% of the value of your house. My thoughts are you should sell it if you can.

I notice you were made disabled in a car crash. Are/were you entitled to any compensation?

Ian