IVA/voluntary reposession - questions/advice..?

bounce11

Hello MSE once again... :money:

This will be a long post about both voluntary repossesion AND IVA's..

After 3 (yes three) years of trying to sell my 1 bedroom flat with no luck at all (4 viewings..) I'm making the decision to seriously consider voluntary repossesion. The reasons I have come to this decision are:

1. I have a 100% mortgage - paid no deposit.
2. The property is very much in negative equity.
3. I have a lot of unsecured debt and can barely afford to pay my mortgage even with such a low base rate (it is a tracker mortgage)...if it goes if even 1-2% I will definately not be able to afford it.
4. I am getting increasingly down (have previously been depressed) about living here - I feel like my life is on hold, away from my friends. Very breifly my ex-girlfriend moved out which is why we are selling the flat.
5. In all likelyhood, the housing market is not going to change much is the forseeable future and my chances of increasing the chances of it selling won't change.
6. I am in arrears with my mortgage of £2000.

So......................I'm probably going to hand the keys back. I understand that the mortgage company will then sell the flat at auction and/or for a much cheaper price than the market and will then chase me for the shortfall in the mortgage. I'm anticipating that the shortfall will be around £25,000 although it could be anything.

I am also in arrears with my mortgage of about £2000 (4 months payments).

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I also have £28,000 (Approx) of unsecured debt. My job (which I am happy with and pays okay) spefically states I cannot go bankrupt. So.......I am going to look at an IVA (which is acceptable to them). I am not taking this lightly. I have been on both a CCCS run and self-managed DMP for the past 18 months, unsucessfully. I find it very hard to discipline myself re payments and for various reasons I have missed them. With my voluntary repossesion shortfall and my unsecured debt I anticipate my total debt will be in the region of £53,000+ :mad: :eek:

My vast list of questions for all of the above are these....


1. Is it correct that with this total debt of £53,000 (approx) I commit to an IVA for 5 years paying what I can afford towards it each month - after 5 years the debt is written off regardless of what remains?

2. Are IVA's managed in the same way bankruptcy is (i.e with a receiver) or is it self-managed with no intermediary for the duration?

3. I take it I will have to do an SOA for the IVA - are the reasonable living expenses the same as they are for a DMP? I will be on this for 5 years so I am going to be slightly more liberal with my expenses.

4. What are the reccommended companies to facilitate IVAs? I've heard horror stories!

5. Can I alter/change the IVA? I don't know whether I should do the repossesion first and then the IVA or vice versa? Either way I will have to alter my expenditure at some point.

I will be posting another thread in the mortgage free thread about my specific situation re voluntary repossesion.

THANKS!! :T

FoggyBrain_2

1. Is it correct that with this total debt of £53,000 (approx) I commit to an IVA for 5 years paying what I can afford towards it each month - after 5 years the debt is written off regardless of what remains? Basically, yes.

2. Are IVA's managed in the same way bankruptcy is (i.e with a receiver) or is it self-managed with no intermediary for the duration? They are managed by an IP (Insolvency Practitioner), who will prepare your proposal, present it to the creditors and, if accepted, manage it over it's term.

3. I take it I will have to do an SOA for the IVA - are the reasonable living expenses the same as they are for a DMP? I will be on this for 5 years so I am going to be slightly more liberal with my expenses. They are roughly the same sort of thing. The beatmydebt website has a useful Living Expenses Guide on it, detailing the sort of things you are allowed.

4. What are the reccommended companies to facilitate IVAs? I've heard horror stories! Pop over to https://www.iva.com and see the list of companiies there. Speak to a couple and ask for personal recomendations. The initial advice is free and without obligation. Don't use a comapny that approaches you out of the blue, or one that charges fees upfront. The forum at https://www.iva.co.uk is also useful for real life experiences.

5. Can I alter/change the IVA? I don't know whether I should do the repossesion first and then the IVA or vice versa? Either way I will have to alter my expenditure at some point. Discuss this ascpect with those companies you contact. Once the IVA is in force it can be altered to suit changing circumstances, within limits, by your IP in agreement with the creditors. It is likely that you will find it easier to get alternative accomodation sorted (renting?) before you have an IVA on your credit file.