My IVA Situation - Need Some Serious Advice

AdamLovesMusic

Hi Guys,

I've just signed up here and it looks like a good place to get some good advice, I only wish I found out about this place before I took out an IVA. I hope you guys can help me with my situation as I really need some advice

2 Years ago I took out an IVA or as I realise now, I was missold an IVA by Baines & Ernst. My debts came to in the region of £33,000 which were a combination of student loans, and credit I got whislt I was a student over multiple credit cards. I went to B&E to get advice on an IVA and before I knew it I was steam rolled into handing over £450 and signing up for an IVA - tricky sales !!!!!!s!!

In recent times my personal circumstances have changed. I am earning a lot more money and had I had not taken out an IVA I would be able to manage my debt and clear off all the money I owe in a much shorter space. I realise that I made a mistake by going to B&E but I have to live with this and see the process through as I have no other option.

Where I need some advice - I'm currently living at home with my parents who have their own problems as they have run out of money to pay the mortgage on the house. They have asked me to support them but I cannot do this whilst I am in an IVA. We simply cannot afford to loose our home. We have been discussing the possibility of my parents handing over the ownership of the home to me i.e - giving me the house. Currently we have around £60k of the mortgage left but I am unsure about how this can happen due to my IVA.Based on the information I've provided my questions are:

1. How can my parents hand over the house and the mortgage to me? Someone has told me that they can they litterally sell me the property for £1 and this will put the house in my name?

2.I know that I will have to inform my IP about the house. How will this effect my IVA?

3. I do not have any idea about mortgages. Will our current mortgage provider allow me to take over my parents mortgage payments if they put the house in my name? Will they charge me a stupid intrest rate due to my poor credit history & IVA situation?

4. Because the mortgage will be transferred over to my name, do I need to pay the mortgage lender a 20% down payment like I would have to if I was a first time buyer?

5. Finally and this one is quite important - If I take on the exisiting mortgage which is around £60K, can I borrow lets say an additional £25,000 ontop fropm the mortgage lender and pay off the IVA is one step?

I know my situation falls both in the IVA and Mortgage camp. I hope this is the right place for you guys to give me advice.

Many thanks,

Adam.

jamesd

How old are your parents? Have they considered equity release?

Yes, with an active IVA you'd get a terrible mortgage rate if you weren't rejected outright. Equity release by parents then you paying off that equity release mortgage after clearing your IVA looks like a better idea.

mjm3346

"1. How can my parents hand over the house and the mortgage to me? Someone has told me that they can they litterally sell me the property for £1 and this will put the house in my name"

If they owned the home they sell it to you at any price although such a false valuation would not avoid various taxes etc which may fall due later.
However if there is an outstanding mortgage the mortgage company is rather unlikely to accept/allow a purchase price which does not clear the mortgage.

Fundin

Also you should be careful about taking on an asset like the house as the IVA people might see it as a way to get more money out of you to clear the full debt. E.g. if you paying a certain amount now say 30p of the £1 then they might see the house as a way of getting to more cash for your creditors.

Depending on the advice you get here you might want to see a IVA specialist to give you professional advice.

SouthCoast

I would suggest that your parents explore the normal routes first:

http://mortgagehelp.direct.gov.uk/default.aspx

Nargleblast

I think you can forget about applying for a mortgage or any further borrowing whilst your IVA is still running - it would contravene the terms of your IVA and no-one would want to lend to you anyway, unless it was at an exhorbitant rate of interest. If the house were to be transferred into your name then you would be expected to release some of the equity in it in your final IVA year so that would not be to your benefit. You simply cannot take on your parents' financial problems on top of your own. I advise you to get your parents to seek financial advice in respect of their own situation. They must have a source of income, what are they doing with it if they cannot meet their own housing costs? Are you paying rent to them? Perhaps you could increase your rent payments to help out, then do a new budget for yourself and talk to your IP if it means renegotiating your IVA payments.