A bit of advice please.

kittiej

I was just after a bit of advice.

If my DH entered into a DMP or IVA would my wages or the house etc be taken into account?

We've only just got married and the house is mortgaged in my name only.

After paying all the bills I don't have any money left to help him out as well, but I do pay things like the mortgage myself.

He's on about looking into the best way to deal with his debts so I just wondered what the implications would be?

Any advice is greatly appreciated thank you.

adfax

I recently entered into an IVA with CCCSVA. Even though the debts - and hence the IVA - are mine, they looked at the household income and expenditure i.e. it included my wife's income.

Even though my immediate reaction was that this wasn't 'fair', the logic behind this is sound. When working out your DH's surplus income, they will look at the total household budget, and work out the surplus based on his contribution into the household budget. In other words, if he brings in 75% of the income, it will be assumed he pays 75% of the bills, and that 75% of the surplus is his - and hence can be paid into the DMP / IVA.

Bearing in mind your comment that you don't have anything left to help him out as you pay the mortgage yourself, a more beneficial way to look at things may be thus:

Lets assume that you both earn the same, and that all bills are split equally - including the mortgage (I am not sure what the implication of the mortgage being in your name only might be ... hopefully someone can advise), then you are entitled to keep 50% of any surplus ... with the other 50% (i.e. your DH's share) being paid to creditors. Of course, you can contribute some of your share of the surplus to any offer to creditors to make it more attractive to them, but if the debts are in your DH's name only then you are under no obligation to do this.

If you talk to CCCS they will help your DH work out a SOA and the amount available to his creditors - and advise on the best route forward.

I understand some other debt advisors may try and take the whole surplus - but remember, you are entitled to keep your share of the surplus.

kittiej

Thanks for that adfax, so if that's the case then I would in theory end up with more money than I do atm because I pay for everything and have nothing at all spare.

DH got into a spiral of debt a few years ago and hasn't been able to get himself out, which then impacts on me because I've got behind a couple of times trying to help him out.

I'm just worried about my house

adfax

I wouldn't worry about the house - as long as you keep up the repayments on the mortgage you will be fine.

With a DMP - which is an informal arrangement - your house doesn't come into the equation as long as your creditors don't try to have their cake and eat it! By that I mean that the only time your house could be at risk is if a creditor obtained a CCJ against you, you defaulted on the CCJ, the creditor obtained a Charging Order on the house, and you still failed to make payments. Do remember that with a DMP there is nothing to stop the creditor continuing to take action against you - it would be a rotten trick but they could in theory do it.

However, if the house is entirely your's then the house can't be touched and that is it.

Putting that fact aside for a minute though, with CCCSVA - and I believe with all IVAs - the house only comes into play if you have more than 15% equity in it (technically I think they work it out as 85% LTV). But even then, they are only interested in the debtor's share of the equity.

Mid-way through the final year of an IVA the house will need to be valued, and if at that point there is more than 15% equity you will be expected to release your share of that equity (but NOT to sell the property). In reality, this means you will need to make reasonable attempts to release that equity by extending the existing mortgage or getting a second mortgage. If you cannot do this (and because you are in an IVA you won't have people queuing at the door to lend you money ), your IVA could be extended by up to 12 months in lieu of this.

However, if at the point of this valuation there is less than 15% equity you won't be expected to release any equity, and the IVA shouldn't be extended.

So - to cut a long story short, as long as you keep up the mortgage payments, the house is safe.

mikes555

I am in an IVA that will be entering it's final year in late June:j.

In my IVA are the following words "The Debtor's principal residence is within the jurisdiction of this court. The EC Regulation on insolvency proceedings will apply and these proceedings will be main proceedings as defined in Article 3 of the EC Regulations"

Does the process described by adfax represent how this works itself out, or does this clause refer to something else?

How does the "house will need to be valued" bit work? By who and on what basis (i.e. potential normal sale or forced sale).

With the end in sight I would like to be aware of any potential nasty surprises.

Thanks

Mike

Charco_2

The implicatrion of the house being in her name only is that Dear Hubby has no claim on it and it is not an asset that can be claimed for his IVA.

HOWEVER, if you now start to pay the mortgage jointly (like adfax has suggested) then hubby does start to aquire an interest in the property (beneficial interest).
So Adfax is half right - you want your hubby to start contributing towards the household bills (which will work out better for you in the long run) BUT you only want him to be paying it as a form or rent! To this end you will then only want to draw up a single I&E, not a joint I&E.

I would advise that you speak to an IP who knows their stuff and if they dont put it like this then you dont want to do it that way!

kittiej

Thanks All,

So maybe he'd be better off trying a DMP. We only got married last month so it's not like he'd have loads of eligibility to the house atm. Unfortunately I have about 60% equity in the house which sounds good, but seeing as though it's probably only worth about 45k cos it's a pre-fab puts it into reality.

We shall plod on lol