Advice needed

timeforaction_2

Hi guys I have done the stepchange remedy tool they recommend iva but I don't want to lose my home is the home loss inevitable

michael1983l

Under an IVA you would not lose your home. You may however have a charging order placed against any equity in the property that means when you sell up (if you do) then the creditors can lay claim to that equity to cover anything you may owe them.

timeforaction_2

Thanks Michael19831 is that as long as the iva runs or forever?

Bella_Smythe

is there equity in your home?

timeforaction_2

yes Bella about 30k

michael1983l

Forever or if you settle in full with creditors. Which ever comes first.

Bella_Smythe

bankruptcy is out then. pity i think thats actually the easier option than an IVA strangely in some ways. hope you get it sorted. my house was repossessed but it was in negative equity so tbh i allowed it to happen x

lilybankrupt

Is this right though?

I thought with an IVA part of the deal could be that at the end of the agreed period of 5 or 6 years you will be expected to remortgage to release any equity to hand over to the creditors.

It doesn't mean you lose your home though.

michael1983l

lilybankrupt wrote: »

Is this right though?

I thought with an IVA part of the deal could be that at the end of the agreed period of 5 or 6 years you will be expected to remortgage to release any equity to hand over to the creditors.

It doesn't mean you lose your home though.

sorry yes, this is right.

longtermplanner

michael1983l wrote: »

Forever or if you settle in full with creditors. Which ever comes first.

There must be some misunderstanding here. An IVA lasts for 5 years, sometimes six if you can't remortgage at the end of it. But assuming your IVA completes (and about 20-25% are failing at the moment) then at the end your IVA debts are then wiped out and there is no further restriction on your house at all.

There is a description of IVAs and who they are most suitable for here: http://debtcamel.co.uk/debt-options/iva/

That is the 'good news'. The less good news is that you need to think very hard before you agree to an IVA for several reasons:
- under the 2014 Protocol rules, which would be the usual rules for a StepChange IVA I think, you may have to agree to a secured loan at the end of your IVA, not a remortgage. And people are currenlty being quoted horrific loans at 15% or even over 20%
- have you considered what your position will be when mortgage rates increase? IVAs are not flexible arrangements and this doesn't mean that your IVA payments will reduce?
- what else may change over this period? New baby? Child going to uni? Reduction in earnings or benefits? Anything like this could badly affect your ability to make the agreed payments.

The IVA failure rates have fallen from over 30% in the last few years, mainly because mortgage rates have been so low and stable. This isn't going to carry on.

keen_kat

From experience with dealing with IVAS, with protocol IVAS (for lay people a group of creditors and professionals got together and laid out specific terms of an IVA for general use) the majority of creditors agree to the term of in month 54 of the arrangement the debtor is to try and remortgage the property and release their share of equity into the IVA. If a remortgage cannot be obtained the general term of the IVA or modifications proposed by creditors is that instead the IVA be extended by a further year, and you make 12 additional monthly contributions at the rate you were paying in the 5th year of the arrangement, and this in turn would settle your obligations in terms of the equity in your home for the IVA with the IVA conclusion at the end of year 6. Hope that makes sense.