Split Up - Parnter Applied for IVA without knowledge

corkyefes

Hi All,

Sorry if this is in the wrong section, but admins, please move if needed...

Wondering if somebody can explain something to me and offer advice initally..

To put you in the picture, me and my partner have split up.

They have moved out of our mortgaged property and moved in with someone else.

I have stayed in the property and are currently paying the mortgage soley, something we agreed verbally.

Well today i have recieved the below letter from an IVA company to say that my partner has signed up for an IVA and included the property.

This is completely news to me, even though the letter says i am aware of it and will give consent!! (That is completely untrue).

Please can somebody explain in lehmans terms what this means and where i stand?

Thanks in advance!

The above named debtor’s share of the interest in the jointly owned property will be included as an asset in the IVA.  The IVA Supervisor, who is appointed if an IVA is approved by creditors, will be required under the terms of the IVA to register a Restriction with Her Majesty's Land Registry against the Land Registry title.

Partner has indicated that you are aware of this and will consent to the placing of the restriction on the property.

This restriction is in respect of partners share of the equity only. The restriction is normally placed on the property without the requirement for you or your partner needing to sign any paperwork, however on some occasions we may need your signature on the paperwork. It is necessary that we receive your confirmation that you will sign the necessary registration forms if required.

A restriction doesn’t affect your mortgage, equity or ownership in any way, but it does restrict what you can do with the property while the IVA is in place and the restriction is on the property. The restriction prevents the sale or transfer of the property to anyone, or taking out a secured loan or remortgage, without the IVA Supervisors consent. It also prevents any unsecured creditors from trying to secure any debts against the property without our knowledge.  Any restriction will be removed following the closure of the IVA.

In month 54 of the IVA, partner will be required to look to remortgage their share of the property to increase the repayment to creditors, this is subject to strict criteria, and I have enclosed a copy of the property clause extract below, for your information.

As you may be affected by the IVA as outlined above, I would suggest that you seek independent legal advice on your position.  If you have any queries about the prospective property restriction, I suggest that you consult an independent financial advisor.

Once you are satisfied, please could you confirm this in writing by signing the enclosed copy of this letter and returning it to my office.

Martico

@sourcrates or @fatbelly may have some expert words of wisdom to impart (I'm tagging them as they normally reside in the debt-free wannabe section of the forum so might not see this otherwise)
In the meantime, my suggestion (from a position of ignorance in these matters) would be to absolutely seek independent legal advice, as advised in the letter 

fatbelly

You don't have to comply or agree or cooperate with this in any way or to any degree. You are not insolvent. He is.

The restriction will probably say that the property cannot be sold without notice being given to the IP. It's pretty standard.

It is a pretty stupid thing to do to enter into an IVA and then move out of the property but there you go. 

ACG

You might want to sort this out sooner rather than later and sell up. 
You are tied to him. He is having financial difficulties. When you want to sell is he going to disagree because he wont be able to see any of the profit?

sourcrates

It won`t affect you unless you come to sell the property before the IVA completes.

To be honest I would let the IP know you did not consent to this.

Once said partner completes the IVA (can be up to 7 years) the restriction will be removed.

fatbelly

From the quote it looks like it's due to complete after 60 months but a 12 month extension would be quite usual. Of course if he misses payments this could go on for a lot longer. In the meantime they are linked by a joint mortgage and both credit files will be affected.

When did the iva start? Have you che ked the register?

https://www.insolvencydirect.bis.gov.uk/eiir/

Keep_pedalling

While you are paying off all the mortgage I would be worried that at some point he is going to claim a half share of the equity despite you putting the bulk of the mortgage.  Not sure if this is possible in this situation but would you be in a position buy out his share and sever your financial connection.

corkyefes

He hasnt started the IVA yet to my knowledge, the letter says that he may be doing one, but needs my consent regarding the property.

Am i right in saying that if i dont give consent, it will be a case of him just not being able to get the IVA?

In relation to buying him out, i dont earn enough to take the property on my own.

I currently recieve Universal Credit as i dont earn much through employment.

I've read that if i sell the house and then have say £30k in my bank from the equity, i will loose my benefits.

Or is it as simple as if i get the £30k, i should just spend £15k to get under the £16k threshold?

I've got £12k of debt which i could pay off straight away.

fatbelly

You won't be able to stop the granting of an iva. Either 75% of his creditors will vote for it, or they won't.

If you can have a sensible conversation with him you can ask him to delay the iva until the property is sorted. What's his rush ? If you agree a solution that sends some cash his way he may not need an iva anyway.

Most ivas are missold so i'm not sticking my neck out too far in saying he probably has better options

corkyefes

fatbelly said:

You won't be able to stop the granting of an iva. Either 75% of his creditors will vote for it, or they won't.

If you can have a sensible conversation with him you can ask him to delay the iva until the property is sorted. What's his rush ? If you agree a solution that sends some cash his way he may not need an iva anyway.

Most ivas are missold so i'm not sticking my neck out too far in saying he probably has better options

Thanks for the reply..

However if i stand my ground and dont consent on the property, does that mean he could still get an IVA without the property being involved.

Ive thought of the option of just selling and breaking from him finanacially but im worried about my benefits (in my last post) because if i lose my benefits, i wont be able to live.

housebuyer143

He owns half the house so you can't really stocorkyefes said:

fatbelly said:

You won't be able to stop the granting of an iva. Either 75% of his creditors will vote for it, or they won't.

If you can have a sensible conversation with him you can ask him to delay the iva until the property is sorted. What's his rush ? If you agree a solution that sends some cash his way he may not need an iva anyway.

Most ivas are missold so i'm not sticking my neck out too far in saying he probably has better options

Thanks for the reply..

However if i stand my ground and dont consent on the property, does that mean he could still get an IVA without the property being involved.

Ive thought of the option of just selling and breaking from him finanacially but im worried about my benefits (in my last post) because if i lose my benefits, i wont be able to live.

He owns half the house so you can't really prevent a charge being added to his half of the property. How that impacts a sale though is what matters to you. You can refuse the remortgage which would be an IVA requirement, so if you make it clear you will not be agreeing to that aspect then potentially they will not grant the IVA.

If you sell they will ignore the money from the house sale for 6 months, so you are then able to buy something else or clear those debts and get your money down to £16k.