Can home capital prevent an IVA being agreed

MIDLANDER

I am looking into IVA's.

I have read conflicting advice - but some say that creditors can refuse an IVA based on the capital in the home? Can they force you to give the house up instead?

Total debt = £40,000 - capital in house is around £20,000

I've also read that credit card companies can put a charge on property. Can they only do this once you default - or can me getting in touch to discuss my difficulties trigger them taking action?

Thanks in advance.

dojoman

Try posting in the IVA forum, you should get more answers there


http://forums.moneysavingexpert.com/forumdisplay.php?f=159

longtermplanner

MIDLANDER wrote: »

I am looking into IVA's.

I have read conflicting advice - but some say that creditors can refuse an IVA based on the capital in the home? Can they force you to give the house up instead?

Total debt = £40,000 - capital in house is around £20,000

Creditors can refuse an IVA for whatever reason they like, there are no rules. If you had say £60k of equity (ie clearly more than enough to settle your debts) then an IVA would be very unlikely. But you will not be turned down for an IVA just because you have 20k equity.

I've also read that credit card companies can put a charge on property. Can they only do this once you default - or can me getting in touch to discuss my difficulties trigger them taking action?

Thanks in advance.

They can't get a charge on your house without first getting a CCJ. They are unlikely to rush to do this if you just call up to discuss a reduced payment. Even after you do default, few credit card companies will rush to court. It's not possible to say they would never do this in your case, but it's unlikely.

National_Debtline

Hello there,

In addition to the great post by Longtermplanner I just want you to be made aware that if you do decide upon an IVA, it's quite possible that there will be an equity clause. Prior to making any final decisions do consider what might happen to house prices over the next few years (I know this is almost impossible to predict - but the general trend currently is that they seem to be increasing in many areas).

Best wishes,

David @ NDL.

Depth_Charge

MIDLANDER wrote: »

I am looking into IVA's.

I have read conflicting advice - but some say that creditors can refuse an IVA based on the capital in the home? Can they force you to give the house up instead?

Total debt = £40,000 - capital in house is around £20,000

I've also read that credit card companies can put a charge on property. Can they only do this once you default - or can me getting in touch to discuss my difficulties trigger them taking action?

Thanks in advance.

Hi

Just following on from others

Sounds to me like you need to get full advice on all your options based on your full circumstances before making any decisions that could affect you for a very long time.

Contact one of the genuine charities and perhaps get a second or even third opinion.

Maybe put up your SOA if possible as it may assist in people guiding you further

Your decisions at the end of the day

Best Wishes

DC

milliemonster

Also it's worth bearing in mind that the new iva protocol 2014 not only has an equity release clause but also Han the clause that this is to be met by any secured lending of any sort, not just a remortgage and if it's refused you pay an extra 12 months payments in lieu of equity, in reality what this means is that after 5 years of payments, you will be required to take out a secured loan of up to 85% of your available equity to put into the iva pot! even if that loan is high interest! currently these are available to people in Ivas at around the 11-13% mark.

It might be more worthwhile looking into releasing the equity you have to do a full and final iva from the off, or using that money to make settlements of your debt than paying into a 5 year iva and still having to release the equity at the end.

UpToMyNeckInIt

...Looks like fears of this whole 'equity release' issue via secured loan are being exaggerated out of proportion. Eg: Assumptions that it is a given that customers WILL have to take out a secured loan. Not true, they merely have to ATTEMPT to get one - just as they currently have to attempt remortgage, with the same affordability criteria applied.

Now whilst I suspect that it is easier to meet criteria to get a relatively small loan vs a whole remortgage, it appears that this will only affect a small minority of IVA homeowner customers, as explained by an IP and a loan provider here:

http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=57578&whichpage=1

Hope that puts you all at ease.

Totally agree though with Millie's point about attempting equity release 'from the off' if you have sufficient equity to pay off your debt in full, and/or attempting a F&F IVA if applicable.