Good morning all, first time post to the forum.

Get expert opinion. This is the place for new questions to be posted.
60 posts Page 1 of 4

 

User avatar
D&G
Posts: 167
by D&G » Fri Jan 15, 2010 12:42 pm
Good morning all, first time post to the forum. I have been reading for a while. In a lot of debt, bankruptcy not an option have equity in home. Debt management plan would not work unless i live for hundred years. My partner works, i do not. Three children to look after, youngest 2. So many questions, not plucked up the courage to speak to an IP, just yet. Did a quick i and e out of curiosity and in black and white there is no money to do an IVA unless go interest only on the mortgage. Which would create about 200 a month for an IVA. Or could try to get 10000 on mortgage which would take us upto 85% mortgage. On approx 47000 worth of debt. Would rather do it this way if i could as my partner is always under threat with his job. Only a few months ago his company shut down a load of depots. Should also say by rights if was able too get money on mortgage really it should go to my parents, money was borrowed a long time ago over several times. I am sure that if i explained things to them they would let us use it for this reason. Welcome all your feedback as not ready yet to get into this officially just yet.

 

User avatar
Michael Peoples
Industry Expert
Posts: 15188
Contact
by Michael Peoples » Fri Jan 15, 2010 12:52 pm
Hi Doomandgloom and welcome to the Forum.
You should seek some advice as it is free and you do not even have to give your name if you are nervous. However, it does sound like an IVA is an option but any IP firm would need to look at the level of individual debts before giving any specific advice. Assuming both of you have debts it may be difficult to get creditors to accept a lump sum of £10k but if it was to settle only one party's debt it may have a reasonable chance of success.

 

User avatar
D&G
Posts: 167
by D&G » Fri Jan 15, 2010 1:51 pm
I have done some workings out and even if we went interest only it would give us approx 2000 a year for iva x 5 years 10000. Would probably not be able to remortgage as so many cannot,extra year max would be 12000. This on the presumption that my partners job is safe for all this time. My partner does a fifty hour week where he works now. Would not get that anywhere else. Not qualified for anything so would be on a forty hour week or less elsewhere on minimum wage. This is all theoretical at present because would not know if they would give us 10000, also would not know if they would allow us to go interest only. Do some people get turned down when asked about going interest only.

 

User avatar
D&G
Posts: 167
by D&G » Fri Jan 15, 2010 2:15 pm
Another question what would happen in an IVA you neeeded a new roof, i cannot see ours lasting another 5 years. What would you do?

 

User avatar
Michael Peoples
Industry Expert
Posts: 15188
Contact
by Michael Peoples » Fri Jan 15, 2010 2:31 pm
There is no guarantee that your mortgage company would allow interest only nor would they advance £10k for an IVA. They may advance the money for a roof as this is home improvements and makes their security stronger. If the roof is not going to last for 5 years it really should be addressed now as it would be very difficult to do anything during an IVA.

The best option although it may not be the most palatable could be a voluntary sale of the property to fund a one off IVA to creditors. You would be allowed to retain sufficient funds for relocation and you could look for a newer property to rent where the maintenance costs would be minimal. The overall costs could be less than you are currently paying and your satndard of living could improve.

Creditors would normally allow up to twelve months for a sale of the property but regardless of what it sells for they would be bound by the proceeds and you could start again. In a couple of years when the children have all gone to school maybe you could get back into the workplace and you would be able to buy another property.

 

User avatar
D&G
Posts: 167
by D&G » Fri Jan 15, 2010 3:40 pm
Not a chance of doing that, could not give up house it is the only thing keeping me going. Rent would be a lot more expensive than mortgage. As for roof if they will not give me an advance on mortgage, then what would happen. By the time the property sold redemtion fees, estate agents fees, solicitors fees and resettlement costs it would come out at about 12000. Would be no better off no security for kids. Be paying more in rent.

 

User avatar
MelanieGiles
Industry Expert
Posts: 47612
Contact
by MelanieGiles » Fri Jan 15, 2010 9:20 pm
How mcuh do you actually owe to creditors, doomandgloom?

 

User avatar
D&G
Posts: 167
by D&G » Fri Jan 15, 2010 9:34 pm
Aprox 47000 between us pretty much evenly split.

 

User avatar
MelanieGiles
Industry Expert
Posts: 47612
Contact
by MelanieGiles » Fri Jan 15, 2010 9:42 pm
Either way you look at this, you would be offering a relatively low return to creditors. I would probably suggest that, if an IVA is your preferred choice, that you go down the contributions route with a final year equity release provision.

You will need to give this careful consideration, as an interest only mortgage clearly sees no no reduction in the capital amount owed - and you will need to consider how you are going to repay the mortgage at the end of its term.

 

User avatar
D&G
Posts: 167
by D&G » Sat Jan 16, 2010 12:04 pm
I thought i would feel better by posting, i do not i feel worse now. My partner puts in fifty hours a week, every week. Sometimes sixty and the three months before christmas about seventy. Most of earnings made up of overtime. As a result of overtime ctc goes down and pressure is on for the next year too work the same amount of hours. I know there is a 10% then the 50%-50% split. But then you lose 40% of that in tax credits, so you are no better off. Then to make it work interest only mortgage, if we can. How would we be able to get back to a repayment one. I really cannot see the light at the end of the tunnel.

 

User avatar
Shining
Posts: 27023
by Shining » Sat Jan 16, 2010 3:54 pm
Hi and welcome to the forum from myself. Have you spoken directly to an IP or two,(off forum) via the telephone or a meeting face to face and hopefully you will see some light at the end of the tunnel? I hope you can find some answers soon.

 

User avatar
MelanieGiles
Industry Expert
Posts: 47612
Contact
by MelanieGiles » Sat Jan 16, 2010 5:41 pm
It is very easy to switch from an interest only mortgage to a repayment one - you simply ask your lender to change the terms.

Are you sure that hanging on to this house is actually worth the hours that your partner is working? Wouldn't rented accomodation without the worry of increasing interest rates over the next couple of years be an attractive option? You could then use some of the sale proceeds to make a full and final offer of settlement to creditors.

 

User avatar
RHB
Posts: 353
by RHB » Sat Jan 16, 2010 5:51 pm
I agree with Melanie, what is more important, bricks & mortar or having time with your husband & children as a family? Only other ting I can think of is of you find a job to help contribute?

 

User avatar
kallis3
Forum Expert
Posts: 71944
Contact
by kallis3 » Sat Jan 16, 2010 5:55 pm
I must admit that the thought of losing my house scares me to death. I love where I live and would not want to move.

 

User avatar
Skippy
Posts: 20717
by Skippy » Sat Jan 16, 2010 6:05 pm
I'm with Jan on this one, I couldn't bear to lose our home. We lived in an area that wasn't as nice as this before we moved here and I couldn't bear going back to that.

To rent round here is more than we are paying for a mortgage, so for us renting in the same area wouldn't be an option.
60 posts Page 1 of 4
Return to “Ask IVA Forum and Industry experts”

Who is online

Users browsing this forum: No registered users and 22 guests