Help please - repossession

molly1412

I am hovering between this board and bankruptcy board.

To summarise - cccs advises that we do iva however as there is no equity in our house (-£50,000 neg equity) we are also considering bankruptcy as last thing we want after a tough 5 years is still the issue of the house.

I have read and i know i need to take official advice but wanted to ask this board first - that you can get your house repossessed and the debt then becomes unsecures so can be included in iva - is this correct?

Has anyone done this or knows what would happen?

My plan (which changes daily - but at least we have admitted we need to do something)

is to hand the keys back to the lender (northern rock) explain we cannot afford to live there and ask that they repossess.

Once this has been done and we have a rental house sorted then to speak to ip to start iva

am i missing something? My worries are as there is so much negative equity and nr would be the biggest creditors they could refuse the iva.

Any advice would be much appreciated as my head is in a spin reading up on things and i would like some clarity

thanks

Gimpsdad

Your plan looks sound to me. If you choose to look at an IVA rather than a full blown BR then I would say that your chance of success at creditors meeting, and don't forget that no IP would put a weak proposal forward in the first place, is excellent. An IVA is a product that generally gives a higher return to creditors than BR so it is likely that they will accept.

However, do be aware that if NRAM hold the majority of the debt, which is likely, they will almost certainly insist that you commit to 6 years rather than 5. You can choose to reject that modification if they put it forward, which they will in my experience, but if they refuse to budge then you may want to go BR rather than take a 6 year hit on an IVA, but it is your choice. Do deal, if you can, with an organisation that doesn't ask for any money in advance of creditors meeting, that way if it is rejected or you find the deal unacceptable, you will lose nothing by trying. Also be aware that as far as IVA's are concerned CCCS are a commercial organisation like everyone else, there is no such thing as a free IVA.

Cheers.