Can they petition for bankruptcy????

zwee_2

Hi There - I just posted this on the wrong board originally - rookie mistake! :rolleyes:

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

Charco_2

It can depend a little on the wording of your proposal however... generally after the Fourth Year Valuation (which i assume flagged up the mortgage equity situation) the proposal can change slightly to accommodate - the creditors after all want to get paid what they were promised.

Generally speaking, if your house has equity of over £5k then you may remortgage to realise this, if it is less than £5k then you would simply make extended repayments for up to a year.

You should HOPE to make the extended payments because this will work out cheaper in the long run. (If you remortgage you'll be required to move from one mortgage to another which would almost certainly be at a worse rate than your current one due to the sub-prime market you would have to go into. You would then be paying this for the duration of your mortgage instead of increased payments to your IVA for 12 months).

I cannot see how you would be forced to go bankrupt. The creditors would achieve no further benefit from this! The creditors are entitled to receive a dividend in the region of what they were promised four years ago however - Xpence-in-the-£!