IVA advice, i want to keep my home

theblades

Would anyone happen to know how any equity in your house works when going into an IVA. For instance, if i entered into an IVA and paid this for a year or two, then a family member were willing to lend me some money purely to pay off the IVA as a full and final settelment. Or if i could get a family member to lend me the money before hand and do a full and final IVA, ( i think i read there was such a thing) Would it be looked into if there was any equity in my house, if so, lets say there was a little, then what would happen.
Thanks in advance for any help.

Foxy-Stoat_3

They either make you take out a re-mortgage in the 5th year(if you have 20% + and the lender agrees). If this isn't possible then they will extend the IVA for another 12 months.

If your going into an IVA only to borrow the money off a family member in your 1 or 2 cannot you not just borrow the money now so won't have to have an IVA hanging over your head for the for seeable future and beyond?

Anondebtadvisor

Remortgaging in an IVA is nigh on impossible in the current environment so you will more than likley do a 6yr IVA in lieu of the equity.

I agree if you can raise the money now why not propose a full and final IVA? how much debt do you have?

theblades

Thanks very much for the advice, The mortgage is for £207,000 and the house is worth about £220,000 so only around 12% equity ish. so does this mean it wouldnt be taken into account?
Our Debt is a lot. Its around £55,000 but £30,000 of that is an unsecure loan with northern rock which we took out the same time as the mortgage. So i dont think i would be able to borrrow enough to do a full and final IVA. Its a million dollar question i know, but what in your oppinion would be the lowest amount they would take, Ive seen some people say they only pay 20p in the pound, i know it depnds on your situation, but mine is not good, i would be lucky to be able to pay £200 a month. Thanks for any help.

Foxy-Stoat_3

I ended up paying 26p to the pound over 5 years. Yours will be likely be over 6 so well worth considering an iva for the full term as paying back that amount of debt will almost certainly not be possible.

Gimpsdad

If you offer a lump sum as a single premium then creditors will, statistically at least, be very likely to take it as it beats having to wait 5 or 6 years for it. Be aware though that if you have a surplus of any reasonable amount, then they will want monthly payments as well on top of the lump sum.

As a BR means that you lose control of your assets and an IVA protects them, the IVA certainly looks a decent bet. I would do a very thorough budget if I were you, you should be aiming for a surplus of £100 or less as a rule of thumb if there are two of you. Anything more and they may ask for a monthly payment as well. As NR hold the majority of the debt you will start at 6 years automatically, and it could extend by another year on top if equity release is not possible so the lump sum does look a cracking bet if you can get it right.

theblades

Thanks again for the help guys. I have just had a thorough look at what my house is worth as they are nearly all the same, They are going for around £210,000 at the mo, and i owe £207,000, so if i went bankrupt they wouldnt get much. When i said i could pay £200 a month that was with a buget extemely in their favour just so i could get the iva, leaving me extremly skint. I have 2 kids, one only a few weeks old, i could easy get it well under £100 a month spare, probably under £50.
So with those figures, in your oppinion how much of a lump sum do you think they would accept, obviously as low a possible, i understand its only your oppinion but any help would be great so i know how much i should be looking to raise.

piglet74

Is not keeping your home an option at all,

Have you consdered selling it, or is this out of the question?

Anondebtadvisor

Do you have a copy of your IVA proposal? usually you are only expected to release equity upto 85% LTV so if your home is valued at £210k 85% LTV would be £178.500 as you mortgage is over 85% they wouldnt normally expect you to remortgage.

Extending the IVA by an additional 12 months happens when there is equity that you cannot release.

If you have had a change in circumstances and your DI is greatly decreased a full and final would be an option and attractive to creditors.

How many month do you have left on your IVA? how much are you paying monthly? this will give an idea of what you are likely to need for a Full and final settlement

theblades

Sorry i dont think i have explained this very well. Im not in an IVA at the moment, just considering it and trying to decide what is the best option for me. From what i can see, a full and final IVA would probably be the best if i could get a family member to lend me the money to sort this mess out. How much in your oppinion are they likely to accept on £55000 of debt, with next to no equity in the house, and with only £50 a month spare, i cannot really afford th do a normal iva. So i think a full and final IVA would be the best option, its just how much do i need to try and raise?

Foxy-Stoat_3

I very much doubt you will find the answers as most of the folk on here have or are in an IVA where they are paying in for 5 years, not a single payment IVA which by the look of it are quite rare. Have a look on this link for more information:

http://www.my-iva-adviser.co.uk/full-and-final-iva

I would of thought you would need to offer more than 25% of your debt and justify that with your total monthly expenditures/house hold income, you would not be able to afford to pay £200 a month for 6 years.