Iva Vs Bankruptcy

thechippy

Just being nosey, but there's a few things I don't understand.
It's often advised that an Iva is preferable to br, but.....

Your credit file is still trashed for 5 years
You would still be expected to carry out an equity release if you own your home (how do you do that with a trashed credit file without selling??)

I'm struggling to see any real advantage here.

Not only that, but lets say the IVA fails a few years in (which they can and do) you are then made br anyway, which will trash your file for a FURTHER 6 years......

....confused

trudij

http://forums.moneysavingexpert.com/showthread.html?t=2086209

reply 3 from Charco kinda sums it up

thechippy

Yep, interesting.

But how do you do equity release toward the end of the Iva with a trashed credit file?

Charco_2

i was going to get involved in this post when i got back online on Monday - using my mobile phone for now (it's an obsession!) Turns out i'd already gotten involved in the thread anyway ha ha! Certainly releasing equity raises problems but it does depend on HOW MUCH EQUITY you need to release!? The best scenario is if your equity is in or around the £5k mark, you'll generally be able to extend your IVA by a year to make up the difference without re-mortgaging (this would be a best case scenario). For figures over that it can cause problems. It's likely a mainstreet bank wont consider you which leaves the sub-prime sector which obviously means higher interest rates - which will mean more money for a longer period of time - but there are protections in place which mean you would not be forced OR EXPECTED to raise your mortgage payments by over a certain amount/percentage. It's still a balancing act between a result for you and a result for your creditors!