My wife and I currently have unsecured debts of around £20k between us which we are struggling to make minimum repayments towards as we have just had a baby, and despite trying to get a loan to consolidate all of our payments and get it all paid off, no-one will lend to us, and so we are considering an IVA as a last resort.
My main concern is that the house that my wife and I live in is mortgaged by myself and my Dad, with a gentleman's agreeement with the bank that my wife would take my Dad's place on the mortgage when the Interest Only repayments finish in Sept 2013.
Would this arrangement be affected by an IVA (assuming if we made one now it would run until June 2015), meaning that my wife would not be able to replace my Dad on the mortgage?
Could the IVA only last for 3 years instead of 5, to combat this problem?
Also, would someone who was financially tied to us, such as my Dad, have to be informed of the IVA?
I'm keen to keep our money problems as quiet and low key as possible!
If anyone can help with some advice I would be very grateful!
Hi Pete and welcome to the forum, I personally can't answer your question but do know a couple of professionals will be along later and I'm sure will advise accordingly.
If you're considering an IVA why not take a look at www.iva.com for a list of companies and some reveiws of these, take case specific advice from 2 or 3 companies to gain that all important free, impartial advice.
All the best. x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Hi Pete and welcome from me too.
If your father is joint on the mortgage he would have to be aware of the IVA irrespective of any gentleman's agreement. The other things you suggest are possible but you would need confirmation from the bank that they would still change the mortgage arrangements if you were in an IVA.
Thanks very much for your input. Obviously not quite the answer I was hoping for, but it's something to take into account.
Would I be right in saying that a Debt Management Plan would just be a more informal version of the IVA, and as such, would my father need to be informed of that?
I'm aware that the Debt Management Plan is generally shorter term, and doesn't necessarily reduce the amount of debt that greatly, but does still allow for more manageable payments to be made whilst the interest of the credit is frozen. Would that pretty much cover it?
DMPs are usually longer term plans than IVAs - but they do allow you to keep your deal with creditors entirely silent from all third parties. There is no guarantee that creditors will freeze the interest - but I think this probably happens in the majority of cases these days especially if you choose a reputable firm to represent you.
A debt management plan usually lasts longer than an IVA and is an informal arrangement which won't affect the house.
There is no guarantee that interest and charges will be frozen and you will pay off the entire debt, none of it is written off.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
If you do enter a DMP there is no legal protection and creditors could try and secure their debts against the property. As a co-owner your father would be informed of this so telling him of your financial problems now may be a better option.
In addition, a DMP will damage your credit file so you will still need to get confirmation from the bank that they will allow the transfer should your credit file be impaired.
