Advice RE IVA,mortgage and secured loan needed.

GravesySpurs

First post and don't know where to start as it's complicated. Wife left me in Sept 2009. Left me with 25k credit card debts and also the kids stayed with me. I have a mortgage in my name only with a secured joint named loan. I had no choice at the time but to sign up to an IVA to take care of the unsecured debts. Since Sept 09 my now ex wife has not paid a penny towards the joint loan. I tried claiming from First Plus who mis sold me a PPI but they were having none of it.Since I got solicitors to do the claim they have accepted liability and owe me nearly £30,000. They propose to drop the balance of the loan by £22,000 and pay a cheque of £8'000 (Yes it was a big loan :-(
The problem I have is that my ex wants half the cheque despite the fact that she has not contributed to the loan in any way. I will not accept this as i would rather have the cheque also go onto the balance of the loan. First Plus will not process the claim until this issue is resolved. I still owe my solicitors money for the divorce and cannot afford more solicitors fees.
I have put the house up for sale and there is equity in the house enough to clear the mortgage and also enough to clear at least 50% of the loan once the ppi claim is processed. First Plus are basically not happy with that and are making it difficult for me to sell the house as they want me to complete a shortfall loan application pack but because im in an IVA as far as im aware i cannot have any credit.
Im at my witts end and just want to hand the keys back to the mortgage company and walk away but am terrified of the consequences.

Any help and advice would be greatly appreciated.

nottoolate

ouch. sounds really awkward

how far are you into the iva? have you spoken to your iva company yet?

if the house did sell how much shortfall would you end up with at present?

GravesySpurs

22 months into IVA. Yes i spoke to them and they said once the house is sold any shortfall turns into unsecured debt and gets swallowed into my IVA hence why the loan company are not too happy with that. Depending on the sale of the house Id imagine that there would be approx £30'000 shortfall. Although a joint loan my ex has paid zero into it and all the while i have been paying it the loan company have been happy and not bothered her whatsoever.

topcat9

Hi - sounds like you're in a really awkward situation. I agree with you it would be better (in this situation) for First Plus to put the entire £30,000 towards the loan - why are they offering the cheque?

GravesySpurs

Not sure topcat9. I think it might be the interest calculation. Thing is my ex thinks she holding one over me but the way things are going and i hand the keys back to the mortgage company then the loan company will then go for her as much as me. Really dont know what to do.

topcat9

Sorry to have more questions than answers, but want to make sure I understand your situation. Does what happens with the cheque make any difference to the outcome with regard to the house and loan? Is the plan either way to sell the house, pay off the mortgage and be left with a smaller unsecured loan for which you and your wife are still liable?

GravesySpurs

The plan is to sell my house and pay off as much of the loan as possible. After the house has gone I have been advised by my IVA that any shortfall turns into an unsecured debt and would go into my existing IVA. Seeing as my ex is not in an IVA she would still be liable to make payments and good riddance as she has made no attempt to help in any way. The loan company will not process the PPI claim all the while the problem with the cheque exists. I have asked them to process the claim and just keep hold of the cheque but they refuse to do it. After the PPi claim is processed my loan payments would drop by £200 a month. So at present Im paying £200 a month more than i should be.
I need that cheque either made payable to me or the solicitors that dealt with my claim as thier fee is £9000 so there is no way im going to split the cheque so she can walk away with £4000 and i end up giving it to the solicitors and still owing them the rest.
Hope that all makes sense.

topcat9

Yes it does make sense, thanks. I know nothing about how IVAs work so someone may come along later who can give you some specific advice, I'm just working by common-sense (hopefully) here!

With regards to the cheque, I would find out from First Plus the reason why they're insisting on this. It sounds crazy from their viewpoint to give money to you and your wife while you still have an outstanding loan with them. Maybe you can persuade them to do what you want and put the money to the loan.

If there is no way out of the cheque situation though, I really think you need to consider the long-term future for you and your kids here. If stopping your wife getting her hands on £4,000 is getting you further into debt and affecting your life so much it may be better to just 'suck it up' (no matter how hard that may be) and accept that it's worth it just to have the chance to move on.

ps Plus you'll have the satisfaction of knowing they'll be chasing her for the unsecured loan!

GravesySpurs

I will question First Plus again on the cheque but their response is Joint loan needs joint agreement despite the fact it's soley me paying the loan. I do not understand their stance on this either as if they process the claim and let me sell the hous ethey will get a lot more money back than if I walk away from the house and they can then wait for the mortgage company to auction the house and get whatever scraps are left after that.
Whaat happens after that I have no idea.

getmore4less

If the plan is to sell and there will not be enough to cover the joint loan so it gets absorbed into the IVA or passed to ex.

Not clear why you have been paying this joint loan.

GravesySpurs

The joint loan is secured on my house which is in my name only and my kids and I are still living there. The loan company are are not keen on me selling because they know there will be a shortfall and because I'm in an iva they cannot touch me. Tried getting a financial settlement with the divorce but she just ignored everything and my solicitor advised me that its best to close the file. The longer she leaves it the less likelyhood she will get anything out of my pension. I now just want to hand the keys to the house back and let the loan company get what they can out of the house once the mortgage is paid.