Going through Divorce - have a large amount of equity with in the marital home

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mandy639
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by mandy639 » Sat Jan 13, 2018 9:52 am
I am currently going through a Divorce and the financial mediation. Both my husband and I jointly have quite a large amount of equity with in the marital home and other properties. I am what they call asset rich but cash poor. If the properties are sold during the period of the IVA and I was able to pay back all creditors with a lump sum. How would that affect the IVA and my credit rating. I hope the question make sense.
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kallis3
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by kallis3 » Sat Jan 13, 2018 9:56 am
Hi,

Once in an IVA, your credit rating will be shot for six years regardless, even if you manage to pay off all if your creditors. You will have a restriction on any sales which is registered at the Land Registry and would need your IP's permission to sell.
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Foggy
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by Foggy » Sat Jan 13, 2018 11:01 am
If the properties are sold during the IVA you would have to pay over the majority of your share of the equity to your creditors, via your IP. The IVA would only end early once you have paid over 100% of the original debt, plus fees and possible statutory interest. Even if the IVA does end early your credit rating will be shot for the full six years.
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Lisa Thomas
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by Lisa Thomas » Mon Jan 15, 2018 9:57 am
If you have enough equity to pay creditors off in full form the sale of property then you may be able to convince creditors to allow you sufficient time to do that and avoid them taking action against you, potentially avoiding the need for an IVA.
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Shaun Vickery
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by Shaun Vickery » Mon Jan 15, 2018 11:13 am
If you are able to raise enough to be able to settle your IVA then, subject to what Foggy says in terms of the actual amount, the IVA would be settled and you would be removed from the Insolvency Register. In terms of your credit record, the IVA will continue to show on your file for 6 years from commencement however in the interim the longer that passes, the better your chances of obtaining credit and more competitive rates. In summary, it is better to have an older settled IVA than a recently settled one but neither is anywhere near as good as not having one on your credit file. Things tend to improve in stages.
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