IVA due to fail and homeowner

Crazycatlass6

I’m hoping someone can advise or offer some reassurance. I’m awaiting a call back from citizens advice but that could take up to a week. A bit of background first..

i entered an IVA almost a year ago. I was self employed running a cafe. Opened 10 days before the first covid lockdown and tried for a few years but ran up debts so closed. New business/no government help etc. I owe a total of £54k, mainly my old land lord (£20k) and a bounce back loan (12k) and then other debts under £5k. I do have one ccj (ex employee for wages £750). 

Im a homeowner, single mum, 2 kids (13 & 11) with the house in my sole name and the kids dad court ordered to remain on the mortgage until I can remove him or the youngest is 18. 

My iva agreement was no payments for a year whilst I found work and tried to remortgage. I now work 30 hours on minimum wage with child related benefits top ups totalling approx £2.5k per month income. I still can’t get a mortgage/second charge/loan or anything as my income is to low. Only my work wages are taken in to account. 

I understand my iva will now fail. I have offered approx £200 a month but they say it’s not enough and I’m expected to sell my house as I have enough equity. (£200k house, £80k mortgage). Obviously I really don’t want to do this. 

Has anyone been in a similar position? I understand if the iva fails it’s likely at least one creditor (probably the landlord) will petition my bankruptcy or the ex employee with the ccj would do it out of spite (they caused lots of issues after I’d closed and was unable to pay) and I would then have no choice but to sell. 

I’d be left with money of course, but not enough to buy another property or ability to obtain a mortgage and I believe would be expected to private rent (I have a dog and cats) and whittle away any money I do have as all my benefits would stop. 

Has anyone been in a similar position and saved their house? I feel I’m being left with no choice but at the same time I’m sure I must have other options? Any advice would be appreciated.

ManyWays

Opened 10 days before the first covid lockdown
that was incredibly unlucky timing

or the ex employee with the ccj would do it out of spite
that one isnt possible - a creditor has to be owed more than 5k to make someone bankrupt, however that doesnt help you much. 

I think you should talk to Business Debtline, who are specialists in self employed debts https://businessdebtline.org/

fatbelly

It's not inevitable that the IVA will fail. Many people in them can't raise equity and therefore do an extra year.

If it does fail, it would be highly unlikely that anyone would make you bankrupt. The ex-employee couldn't do it on their own, as pointed out. They could potentially link with other creditors to get over the 5k threshold but that seems unlikely too.

For now keep talking - to your IP, to Business Debtline and us