Advice needed please

Red_Helen

I have been in a Stepchange DMP for some time and have managed to get a 25K debt down to about 13K. Unfortunately, my work situation changed and my earnings went down, and after some massively bad luck, I ended up with a couple of BIG bills (Needed new roof, Car Blew up, Huge Vet Bill) I STUPIDLY ran up more credit card debt (around 9K) plus loaned some money from a family member (5K). I am still keeping up my DMP payments, and paying the minimum on my credit cards as well as slowly paying my family member back but I am really struggling. I am looking for a part time job, but not having any luck due to the hours I work in my full time role and the amount of travelling I have to do on a daily basis. I am thinking of going for an IVA, but worried about the fact that they can ask you to remortgage and release equity in the property at the end of the IVA. I worry that I wont be able to get a decent mortgage (if at all!) if I swap lenders! Should I approach stepchange and explain my situation and see if I can add to my existing DMP? Any advice would be greatly appreciated.

RauHughes

There is an affordability clause in the remortgage requirement of an IVA - if obtaining a new mortgage would cause your secured borrowing repayments to increase by more than 50% of your IVA payments, you would not be required to take the further mortgage. 

So if your current mortgage is £600 a month and your IVA payments £200 per month, you couldn't be ask to obtain a new mortgage If the payments would increase above £700. Please bare in mind that you could be asked to enter the mortgage to the maximum term allowable which would significantly reduce the payments if your current mortgage term is relatively low, offsetting a worsening in interest rates. 

You also wouldn't be 'stuck' in the new mortgage indefinitely. Your credit rating will heal and you could get placed back on the high street within a few years of remortgaging in the IVA.

Talking to stepchange should be your first port of call.

Red_Helen

Thank you for your reply and advice. I think I'll bite the bullet and call stepchange