IVA advice please

cashlessmummy

I've just done the cccs online tool and it has suggested that an IVA is the best way forward for us. I've asked someone to call us back about it to discuss but just wanted to gather a bit of info before hand.

1) Can they make us sell our cars? We both have to drive for work (hubby works odd hours 35 miles from home and there is no public transport, I do a community based job and have to travel around for work)

2) How does it work re: the equity in our house. Guessing on what our house is worth, the amount of equity we have is pretty much what we owe so how does that work? Would guess that we roughyl have about 20% equity at the moment.

3)How does it work if circumstances change for the better (i.e. payrises, changes in childcare costs, change to higher paid job, bonuses etc) and how is this monitored?

Sorry if this has all been answered somewhere before!

cashlessmummy

Wow! 75 views and no replies - guess my questions are either so stupid nobody will stoop low enough to answer them or are so bizarre nobody knows the answers lol

milliemonster

Hi Cashlessmummy, MSE is not the best forum for IVA advice unfortunately, there are others out there where you will get quicker answers to your queries however I will try to help

You will not have to sell your cars, unless you own a ridiculously expensive car like a ferrari!

Equity is looked at in your proposal and again at month 54, you would be expected to try to release up to 85% of your available equity by way of a remortgage, although it is unlikely you would be able to get anyone to lend to you so IVA's now have a clause that if you cannot release equity you agree to make a further 12 months payments in lieu of equity taking the IVA to 6 years, if you have less than 15% equity at month 54 then the IVA would end at 5 years

You have an annual review where your company looks at your income and expenditure again, and establishes if anything needs to change, usually the idea is you get better off as the years go by, I have just had my first review and despite my salary going up by £132 a month my IVA payments have stayed the same so we are better off this year now. If you have a salary increase, the IVA will take 50% of the increase, but be careful which company you choose, some will only look at salary increases at your annual review (so for instance if your review is due in June and you get an increase in July, you get the benefit of an increased salary for 11 months before the next review anyway) some companies will adjust your IVA payment from the month your salary increases and not wait for review (Payplan do this) so there are lots of questions you need to ask and you need to speak to a few companies first before you decide who you go with

cashlessmummy

Thank you Milliemonster that's really helpful (sorry if I seemed rude - it's just on other forums I belong to it's very rare to get so many views and no replies!).

Nope, we don't have ferrari type vehicles - just two fairly high milage standard motors! Please, I am scared to park my ford focus let alone a ferrari!

Think we are going to get someone round to value the house in the next week or so - the house is not really 'sale ready' but I guess for the purposes of this that doesn't really matter? Would be useful to know properly what it's worth as we bought in 2006 when prices were high but the place was a wreck and we have done a lot of work so hopefully might have made some money on it even though prices have dropped since then (or at least we hope it is still worth what we originally paid for it!)

molocash_2

Hi cashlessmum

I am so please to see you tread and also that it has a reply.

We too have exactly the same questions as you. We both have shift work jobs 30 miles from our home with no public transport so need both our cars and also do not have much equity in our house.

We also have just done the online cccs tool and were advised IVA was best for us. We were concerned about the car and equity of the house points.

Thank you to milliemonster for your answer which makes things clearer and will assist in a better nights sleep!

Anondebtadvisor

If both cars are needed for work/school etc there is no reason why you should sell your cars.

If you earn any overtime in addition to the income in your statement of affairs this will be split under the 10% 50% 50% rule. This means than for example if you earn £1000 basic and get £150 overtime - you get to keep the 1st 10% - £100 and the other £50 split £25 for you and £25 for the IVA - hope you follow it can be confusing?

Equity.... make sure you 100% understand what is required in terms of equity! you will be expected to get a forced sale valuation and if you can remortgage upto 85% LTV in year 4 of the IVA.

If you unable to remortagage which is likely to be the case in this currant market - you may be requested to do an additional 12 months IVA contributions in lieu of the equity = a 6yr IVA.

Speak to a few companies before you make any final decisions

delia0427

My husband was adamant that the house was not to be part of my IVA agreement, otherwise divorce would have been on the cards! So I have agreed to pay an additional 12 months which all parties have agreed to.

I too have just had my first annual review and my payments have remained the same which has given me some breathing space. :beer: