RE: Can they petition for bankruptcy??

zwee_2

Hi There

My husband and I are in the final stages of an IVA. We have never missed or been late with a payment. The IVA is due to end in May 2010 so our supervisor has requested that we get a re-mortgage offer to pay £13,000 dividends to the creditors. Unfortunately due to the property crash, we no longer have this equity in the property - only enough to pay off the mortgage and a secured loan that was taken out before the IVA.

We have spoken to the supervisors who are going to call a creditors meetings and request a 12 month extension and for them to remove the re-mortgage clause from the agreement. However, they have said that the creditors may reject this and fail the IVA and then either chase us for the remaining debt or petition for our bankruptcy.

We're really worried about this as we have paid them a total of almost £20,000 in monthly payments to avoid losing our house and it seems that we could lose it anyway! Surely, if this was the case, we'd have been better of filing for bankruptcy five years ago. :mad:

Does anyone know if this is correct as we were under the impression that if the re-mortgage could not be obtained, that the remaining debt would be written off following an extended 12 months payments?

Any help or ideas would be very much appreciated.
Thanks
Zoe

boredofbeingathome

It may be better to post this on the IVA board.

Although i would also look at your T&C's, i am sure you could argue your case as i too was under the same impression as yourselves about remaining equity. It would also pertain to how the IVA has been presented as your best option, marketing does tend to say about the debt being written off like that. Good luck.

zwee_2

Thanks for replying boredofbeingathome. I didn't see an IVA board - sorry this is my first post. :rolleyes: It's just so difficult trying to get specific info on this subject - even the national debt line seem a bit vague.

I will try re-posting on the right board.

Cheers :j
Zoe

RAS

Hi

if the creditors petition for your bankruptacy and there is no equity in the house, you are likely to keep the house. You will be able to buy your half of the BI back for £1 plus about £225 fees.

The only real reason the OR would insist on a sale would be if the monthly cost of the mortgage and secured loan is substantially more than the cost of renting a slimiliar property and the income that released was enough to ensure that you paid an IPA (meaning that your creditors got more money back.)

zwee_2

Hi Ras

Sorry I am new to this so not sure what 'buy your half of the BI back for £1 plus about £225 fees' means?

Our combined mortgage payments and secured loan equal roughly what we'd pay in rent for a similar property so there wouldn't be much to gain in that respect.

But it is something they can do though?

Thanks
Zoe

RAS

if you go BR, the beneficial interest (equity) in the house belongs to the Official Receiver. The BR or another person is allowed to buy this back at the agreed value plus the OR's fees. So one OP in the BR forum had to remortgage to release £70K in BI to the OR, for example.

If there is no equity, then the nominal value of the BI is £1, so that is what the OR sells it for, plus the cost of his fees. he gives you or OH the first option on buying this back.

boredofbeingathome

Thanks RAS that's interesting. Shocking how the IVA can go though, I did read Richard S' post a while ago about his situation and someone elses in the same village he was BR and they went on an IVA.

Hope you get it all sorted zwee, i will follow with interest.

zwee_2

Thanks both of you, I'll let you know what happens.

zwee_2

Just a long overdue update. We are in the process of selling the house and have negotiated that the creditors will accept a reduced final payment of £5,000 as full and final settlement! :-)

Can't wait for this to be finalised and this horrible saga behind us. All being well, we will walk away from our house debt free and with a few hard lessons learned!

Thanks
Zoe