Sellers on an IVA - any implications?

Bill23h

Hi all
Just about to offer on a house when we discovered via land registry check that both the sellers (married couple) are on an Individual Voluntary Agreement (for insolvency). There is a note on the Land Registry details that a (named) debt manager should be informed if the property is 'transferred'.
Does this have any implication for us as buyers? Should we avoid? Will we get tied into any bureaucracy?
Anyone dealt with this before?


All help appreciated.
cheers

DandelionPatrol

You should write a brief letter to your solicitor, with roughly the content of your first 2 sentences plus an instruction to ensure that the note on the Land Registry details is removed on transfer of the property to you. And keep a copy.

The topic is a bit technical [this thread https://forums.moneysavingexpert.com/discussion/1839539 refers]. In short, however, the distinction between a charging order and a restriction is not very relevant, you just want it off the title, whatever it is, when you buy. A letter to your solicitor is not strictly necessary, because the solicitor should deal with it, but belt and braces does not hurt.

Bill23h

Thanks for that, mate - will read thru the thread later. To be honest, I'm thinking of not proceeding with it (barely started yet) as it looks like trouble. Also, some concern of the address damaging my credit rating in future?

Tigsteroonie

Bill23h wrote: »

Also, some concern of the address damaging my credit rating in future?

Won't happen. Credit references are individual to the person, not an address. Otherwise nobody would ever move the house of a former debtor!

DandelionPatrol

Bill23h wrote: »

Thanks for that, mate - will read thru the thread later. To be honest, I'm thinking of not proceeding with it (barely started yet) as it looks like trouble. Also, some concern of the address damaging my credit rating in future?

The thread is a lifetime of reading, but for the most part the first couple of pages are enough.

This should not be a showstopper, but if you are worried, ask your solicitor to confirm before any money is spent on searches and survey that in principle the notice can be lifted.

If you have the same surname as the vendors, it may be possible that some of their grief lands on your credit file, or you may get doorstep visits, but these can be dealt with

eddddy

There are risks associated with buying a property from somebody who is insolvent.

(just because somebody has an IVA, it doesn't mean they're insolvent, but perhaps the chances are greater.)

Briefly, if the seller is insolvent, and later goes bankrupt, the sale could be voided, if the liquidator thinks that the property was sold below market value. (i.e. the seller sold the property cheaply, and deprived his/her creditors of money.)

There are steps that your solicitor can take to guard against this. But make sure that you have a good solicitor (not a budget conveyancer.)

But it sounds like you're not planning to go ahead anyway.

Thrugelmir

You've no idea as to how their situation arose nor is it any of your business. Perhaps selling the property is how the couple intend to resolve their financial issues. If you want to buy the property then enter the transaction with your eyes wide open.