Looking into IVA advice plz

BonesMa

Ok my wife and myself have for many years been perfectly paying off our debts but circumstances have changed.

I am now unemployed working realy hard to get a job again.
My wife is self employed but finding it realy hard so is actively looking for employment work instead.

We have been to the CAB and taken some advice from there and have an meeting with their IVA advisor this saturday. So I wont to know if this is the correct thing for us to do.

I have looked into IVAs online and have had great advice on this forum before so thought I would ask.

Details:
We own our own home but rent it out for 450pm with mortgage payment of 675pm.
We are living rent free for the time being with family.
Outstanding mortage totals 104k with the last value done of 120k so there is capital in our propety.

We dont want to sell unless is totaly the last thing.

Our unsecured debts=

Barclaycard Plat 4,146.97 100.00 Barclaycard 6,000.00 60.00 HSBC Managed Loan 13,595.61 382.90 Barclays Loan 7,000.00 225.00 Van Finaince 6,500.00 220.00 Store Card 1,300.00 42.00

Once my wife gets a job she will sell the van to pay for the finance its currently worth between 7.5-8k.

Outstanding to the left and Monthly payment to the right.

Ok our income at the moment is nothing but I am highly employable and so is my wife. We are now fed up of paying and paying and not getting anywhere. So we are looking into IVAs more to do with the fact that at the moment our income is nothing and we are worried.

Are IVAs the way forward for us?
Will we have to sell our house? I know that most cases its no but we are not living there so was not sure.

Thanks for any help.

Choo_Choo_4

The difficulty at the minute Bones is that no-one would be able to say whether an IVA is or is not for you at the minute because of the fact that you do not have a household income. Until you regain employment and can then re-do your Statement of Affairs to show how much you have coming into the house each month (income, benefits etc) and how much goes out (household bills, mortgage etc) excluding what you would normally pay your creditors - then you would be able to see how much you can afford to pay your creditors each month.

As you say, you are highly employable and the fact that you are actively seeking work shows that you won't rest on your laurels.

You will NOT have to sell your home. The amount of equity that would be raised from selling (if you got a good price) wouldn't be enough to cover 1/3 of your debts. In an IVA you will be asked to carry out a 4th year valuation on your property to see if there is any equity that can be brought into the arrangement. This is determined by taking 85% (no mortgage company will allow a remortgage for any more than this) of the value of your property and deducting the outstanding mortgage - so in your case at the minute:

120,000 x 85% = £102,000 BUT your mortgage is £104,000 therefore you do not have any equity. Yes it may increase in 4 years BUT even if the value rose to £125k this would only show £2k equity.

Basically - NO you will not have to sell your home but the fact that you are renting this at £225 per month less than what the mortgage is will have to be addressed i.e. Rent would have to increase

You're going to meet with CAB on Saturday - it won't be a wasted journey - they'll speak to you and give advice but they will not be able to tell you whether or not an IVA (or indeed any solution) is best for you until you regain employment and have an income (or 2) coming back into the house.

Good luck with the meeting and even more good luck on the job front

BonesMa

Thanks greatly for the reply.

The rent issue is a problem as we are renting out at the current market value but our mortgage is a high APR fixed 6.7% which we can renegotiate in april.

I am currently a Tax Accountant so have to be carefull what I do ie bankruptcy not an option. If employed my income would be about 17k and my wifes would be about 20k+ yes it might take some time to get a job but that is what we should easily be able to get.

I will let you know how we get on at the CAB and also let you know our decision.

Thanks for the advice and I have read the IVA pdf here on MSE it was very helpfull. We both want to get into a possition where we only have 1 debt and thats our mortgage.

Much Thanks

Choo_Choo_4

Good Luck tomorrow Bones ...

I hope something comes up soon on the work front ...
Fingers crossed you will be able to renogotiate the mortgage in April ... at the end of the day you're currently living rent free albeit you might have to £250+ to top up the mortgage.

You're not going to get alternative accommodation for £250 per month if circumstances meant that you had to move out - you would likely see yourself living back in your property and paying the full mortgage leaving less for your creditors ... so if they do prove tricky in relation to the rent issue you could argue this point perhaps?!

Good Luck!