I have tried to use my equity

[jasz]

dear expert
My debts are out of control I owe in the region of £70000 to my creditors including family.My property is worth approx £175000.My mortgage plus secured loan is approx £100000 leaving equity of £75000.I have tried to use this equity but cannot get any furthermonies based on income and expenditure. woul I qualifi for an iva and would I lose my propeerty

[Adam Davies]

Hi
Aa your equity is more than your debts an IVA may not be suitable or available,technically you are not insolvent.
You could consider selling up and clearing all your debts,raising a sum by way of remortgage and proposing a full and final IVA or entering into a debt management plan.
I personally would seriously consider the first option
Regards

[MelanieGiles]

And I would definately agree with Andy on that point.

[jpj]

Seems a bit of a borderline case to me! Jasz states his property is worth in the REGION of 175k . all it takes is a valuation of 165k and Jasz is insolvent! I would get some firm valuations myself!

[MelanieGiles]

Even at those figures he is probably not insolvent as there is likely to be some disposable income on top of the equity to offer.

[Reviva UK]

Hi
what is the split of 1st mortgage and secured loan, and their repayments.
You may be able to do a full remortgage to reduce the outgoings - but only worth doing of it will make a real difference.

If you are desperate to stay on the housing ladder I would suggest down sizeing to release a sizeable chunk of capital to make a good dent in the debt and then work out which debt you should target 1st ( this site can help you make the calculations http://www.whatsthecost.com/snowball.aspx )

If ownership is not key then sell up & rent.

If you have already got into arrears and are being chased by creditors you may be able to negotiate a 1 off reduced payment yourself. if you don't ask you won't get guaranteed!.
some creditors start offering a reduced settlement quite early in the debt cycle.

hope it helps

[MelanieGiles]

I'm not a fan of the "snowball" effect Paul - it takes great discipline and can lead to greater difficulties in my experience, unless the individual can really make sure that they don't revert to using credit again until it is all paid off.

But your suggestion to look at consolidating the existing mortgage and secured loan make sense. An interest only mortgage will give greater savings and free up additional money to cover the unsecured debts, but the poster does say that he has attempted this and cannot show affordability so this could be a hurdle.

[Reviva UK]

Hi Melanie

Completely agree that the Snowballing technique is probably for smaller debts although Martin Lewis - Money Saving expert - seems to overplay this as a solution.

I haven't yet recommended this as a solution to a client's debt, although I firmly believe that each client needs to explore every solution incase it is viable.

I probably misunderstood the initial post from Jasz re the equity in the house. I read this as he had already tried to get another loan. what I was suggesting is that he explore the viability of remortgaging and eliminating 1st & expensive 2nd charge to make the monthly available increase.