Lump sum IVA

Mum2Boys_2

Hello 
I am wondering if anyone can help me. 

As you may have read I am in some financial difficulty but own a large asset including a large chunk of equity. 

One of my options is a lump sum IVA which would write off all of my debt. Including my non secured and my secured debt, not including my mortgage. 

This would cost me £30k. 

I currently have between £80-100k in equity. 

I was considering selling my property and doing this but I wondered if I’d be able to purchase a property between £150-170k? 

Would this be possible? 

sourcrates

Why not just sell the house, settle the debts, and avoid insolvency ?

Mum2Boys_2

I also have thought about that, if I do that I would not be able to afford to buy a new property. 

One of my other options is to clear the unsecured debts and keep the secured alongside a smaller mortgage, 
I can currently afford my secured plus another £200-£300 for my unsecured a month.  

sourcrates

Your debts are more than £30k then, how do you know that your creditors would accept £30k in settlement ?

That would have to be determined at a creditors meeting, and if they knew the money was from the proceeds of a house sale, they would likely want the lot, up to the full amount of your debt.

Mum2Boys_2

That was one of the options given to me by stepchange, they calculated the £30k 

Mum2Boys_2

I have looked further in to this. 

My sister would be able to come on to my mortgage and together we can borrow an additional 50k on my property. 

Stepchange have calculated that I would need around £33k for a lump sum IVA, does anyone have any experience of this situation? 

This would mean that all of my debt including my secured loan would be cleared and I would only have mortgage payments of around £550 max a month to pay. 

MrFrugalFever

So in effect you’re using debt to pay for debt....would a DMP work better?

Mum2Boys_2

I can see what you mean mr frugalfever. 

I’m basically looking to exploit the current equity in my property. 

I have looked at a DMP but to be honest I just want a fresh start. 

If I take out a DMP I’ll still run the risk of accumulating interest on my current debt I’ll be paying it forever and they can still chase me for money which I feel will continue to stress me out. 

Doing a lump sum IVA (or any IVA) will stop all of that and I’ll be looking at a fresh start in a maximum of 6 years.... I’ll me 39. 

My current debt including interest charges is around the 60k mark. 

My current equity is between 80-100k. Which I can not release on my own. 

I could sell and clear but then I would have to go back to renting and this will be more costly for me each month, by a few hundred. 

I know insolvency is not a popular choice but after doing research the only big downside for me is that I will not be able to obtain credit for 6 years and right now I can’t see that as a bad thing. 

fatbelly

I do think it would be worth getting a second opinion on this plan. Maybe one of the insolvency practitioners from TIP, as IVAs is all they do.

https://tipiva.org.uk/insolvency-practitioners/the-panel/

You'll have to click through to get a phone number.

Mum2Boys_2

Thank you fat belly, I will look through and definitely get some advice before I do anything, I’m currently on a token payment plan to help buy me some time. 

fatbelly

That's sensible. It's not something you want to rush into.