IVA to possible Bankruptcy

marley8bella · 14 May 2018 at 10:59AM

not sure if this is the right place to post this, please let me know if wrong, thanks

I'm currently in an IVA. I'm just about able to afford my payments. I own 45% of a house, mortgaged. I am in full time employment and earn a decent salary. I live with my ex-wife, who contributes nothing to the IVA and minimally to the house, she pays the gas, water and elec.

Last year, I was involved in a car accident. long story short, i took out my insurance but put my ex-wifes name on it. they've finally sent me the bill, and its large (£10k)

I've approached my creditors to sell the house, initially my offer was turned down. I increased it a little bit and they tentatively agreed to it. they want to see how much i'll get for it and then make their final decision.

With the accident i need to pay back, i won't be able to afford my iva payments. well, i could, and i'm going to try, but it's going to be an absolute ridiculous amount i'll be paying towards huge debt.

What i'm trying to determine, is whether, if i file for bankruptcy:
1: will i definitely lose my house?
2: is there any way i can keep it, other than the iva?
3: how long does this normally take?
4: if i file for bankruptcy, will that cover the accident? can that be added to the bankruptcy? or will i still need to pay that?

I'll try to meet my payments, or sell the house. i'm trying to be responsible and pay my debt. but sometimes, things just don't work out they way you plan.

any ideas or info will be most appreciated.

National_Debtline · 14 May 2018 at 12:36PM

Hi Marley8bella and welcome to MSE,

When you file for bankruptcy your assets are at risk. If there is equity in the property then it would likely be sold as part of the bankruptcy. However, it does depend how much equity. If there is some, but not enough to justify a sale, then the Official Receiver (OR) may put a charging order on the house instead. This is something that would accrue interest at 8% per annum.

If there is enough equity to justify the sale, then the only way to try and prevent this is for a third party to "buy back your interest" from the OR. This means someone else paying the OR - more or less - the equivalent of the equity amount to prevent the OR selling the house. Assets have to be dealt with within 3 years of the bankruptcy order date, but unfortunately, it is hard to be anymore specific than that.

With regard to the accident, you may need to discuss the 'elements' of this £10k debt. If there are elements of personal injury/ compensation then is likely to be a non provable debt in bankruptcy, however other aspects, such as loss of earnings can normally be included.

Laura
@natdebtline

IVA to possible Bankruptcy

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