DRO partner has a mortgage

mollymoomoocow

Hi I’m looking for advice/ reassurance regarding a debt problem. I am currently 1 year into an IVA however after having an accident my circumstances/ situation has changed and I am struggling to make repayments. I now believe I meet the criteria for a DRO however after speaking to moneywellness today on the phone they have said they cannot advise me until the IVA fails and the fact that my husband has a mortgage even though it’s only in his name might be a factor as it might be seen as me having an interest in the house.(I have never paid anything towards it) He has recently remortgaged and I did sign a consent to mortgage form would this be enough to prove I have no interest? Or should I forget about a DRO ? Thank you in advance for any help. I should also add all our finances are separate and we have no joint debt 

ManyWays

Did your partner own the house from before you met? If it was bought when you were already together, where did the deposit come from, was it a house he had previously owned, or did he inherit the money or what? 
If any of the money for the deposit came from you a DRO would be a problem.
Who is the IVA with and was it for 5 years, did the subject of the house come up in discussions with the IVA firm?

sammyjammy

As long as you are not married, you don't contribute to the mortgage or upkeep of the house in any way then you are fine, your partners mortgage will not impact you.

mollymoomoocow

He Bought the house when we were already married he used a payout that he got from the army after being injured for the deposit. I have never paid towards it. The Iva is with Bennett jones over 6 years I’m 13 months in and already struggling and it’s due to increase for the 1st time in September. They did ask about living arrangements and I was honest and nothing else was said

sammyjammy

So you are married, in that case you do have an interest in the property.  

Stop paying into the IVA, just let it fail, all this will take some time, you could use that time to look into having a DMP.

mollymoomoocow

sammyjammy said:

So you are married, in that case you do have an interest in the property.  

Stop paying into the IVA, just let it fail, all this will take some time, you could use that time to look into having a DMP.

So DRO is definitely not an option? Is a DMP any better than an IVA? 

sammyjammy

I don't believe you can but someone like @fatbelly will be able to confirm.  A DMP is very different to an IVA, you pay what you can afford, you can even manage it yourself.  If I were you I would stop paying the IVA immediately and let it fail, use that money to build yourself a bit of an emergency fund until the IVA has failed, you can then contact creditors and tell them what you can pay on a monthly basis, even if they disagree then you just make the payments.

How much was the IVA for?  Lots of people get caught in them when they were never suitable.

RAS

You can't do a DRO if you 'own' in a property or have more than £75 spare income. An IVA will require release of equity if you have beneficial interest in a property or an additional year's payment. Both are forms of insolvency with legally binding rules and the IVA has high fees.

A DMP is purely an informal arrangement where you pay what you can afford towards the debts. You need those debts to default before you start paying your creditors, as that minimises the length of time before your credit record starts to improve. But if you are ask if you have ever made an insolvency agreement, you have to declare it.

With luck in a few years you will get offers of settlement for a reduced sum, so clear the debt sooner.

mollymoomoocow

sammyjammy said:

I don't believe you can but someone like @fatbelly will be able to confirm.  A DMP is very different to an IVA, you pay what you can afford, you can even manage it yourself.  If I were you I would stop paying the IVA immediately and let it fail, use that money to build yourself a bit of an emergency fund until the IVA has failed, you can then contact creditors and tell them what you can pay on a monthly basis, even if they disagree then you just make the payments.

How much was the IVA for?  Lots of people get caught in them when they were never suitable.

It was for just over £20,000. In a DMP do they have to accept what I offer or can they refuse and push for more? Thank you for all your advice by the way 

mollymoomoocow

mollymoomoocow said:

He Bought the house when we were already married he used a payout that he got from the army after being injured for the deposit. I have never paid towards it. The Iva is with Bennett jones over 6 years I’m 13 months in and already struggling and it’s due to increase for the 1st time in September. They did ask about living arrangements and I was honest and nothing else was said .

I’ve just checked my Iva proposal and this is what was put down 
Dwelling House

19. I reside in a property owned by my husband which is subject to a mortgage. I have not made a financial

contribution to the purchase of the property or the payment of the mortgage. I do not consider I have acquired

an interest in the property which may be claimed by a Trustee in Bankruptcy if I was to be made bankrupt. I

intend to continue to reside in this accommodation for the duration of the IVA

fatbelly

A DRO is not out of the question but advisers always get nervous about beneficial interest.

The guidance is here

https://www.gov.uk/guidance/debt-relief-orders-guidance-for-debt-advisers#beneficial-interest