I want to sell my property...

[Jojoey]

Hi There

This is my first post on the forum but I wanted to get some advice....all advice welcome.

I have been in my IVA for about 10 months now and I am now considering selling my property. At first I thought this was prohibited as the IVA was taken out based on my property being taken into the equation. However having read some posts it seems that selling and moving into rented accommodation is an option.

My property is worth about 145k - 150k, I have an outstanding mortgage of about £132k plus early release fees of about £3k. What would happen to any equity in the property would that all have to be paid into the IVA or would it be possible to keep some of that for relocation costs?

There are 2 reasons we want to move, firstly I would like a second bedroom as my boyfriend is from Manchester and he desperately misses his family - having that second bedroom would make it much easier for family members to come down and stay, avoiding the costs of hotels etc.

The ideal solution would be to relocate to his home town of Manchester. The cost of property there is a fair bit less so we could rent a 2 bed place for a fair bit less than I am paying now for a 1 bed flat (mortgage is only on Interest Only). If my partner decides to relocate my IVA would fail as his contribution to my mortage each month funds my IVA.

My partner is not linked to my IVA in any way other than contributng to the household bills. He is termed as a lodger in the IVA paperwork. His credit rating is clean so we could take out any rental agreement in his name to avoid credit check issues.

Any advice or personal experience of similar situation would be much appreciated. As yet I have not approached my IP but I do have an estate agent coming tomorrow to value my property.

Please help as my heads in a spin at the moment.


Thanks [:I]

[Michael Peoples]

It is possible to sell and relocate but there are a number of things to consider. There would need to be a new income and expenditure account done to reflect the new circumstances and if you have a surplus you would be expected to continue with the IVA. If there is none creditors may accept a full and final settlement from the sale proceeds and may even allow some to be kept for relocation costs.

This would depend a lot on your individual circumstances which your own IP would be aware of so you should give them a ring once you know what the value of the property is.

[Julie]

Hi Jojoey,

Welcome to the forum,

Hope your head has stopped spinning [:)]

As Michael says get a current valuation of your property and discuss it with your IP.

Good luck and keep us updated xx

[MelanieGiles]

As you are suggesting that your costs would reduce if you were to move to Manchester, I cannot see your IP refusing to allow you to sell your property with some of the money being used for relocation costs and the rest being brought into the IVA for the benefit of creditors.

As always, better to speak to your own IP on this matter for definitive advice.

[Jojoey]

Hey thanks for the advice.....more questions!!

I have had a valuation on my property. Basically I could sell my property for approx £137,000. This would clear my mortgage balance and the early payment charge to my mortgage lender. After fee's I would walk away with pretty much nothing! In my mind that's not a bad position as I would in the long term be saving money by relocating.

As it currently stands commuting to London for work is costing me and my partner £500 a month which could be saved/paid into my IVA if I moved to Manchester.

The other alternative which I have considered but am not sure if I'm allowed to do in an IVA would be to let my property and rent up north. I could achieve £675 a month on my flat according to the agent. This seems to me to be a credible option as even after paying 11% management fees I would still be paying a similar amount on accommodation.

rent my proprty = £675
minus 11% management fees = £600
rent in Manchester £600
Again saving on commuting costs. £500

Would this be a viable option to rent my property if I obtain permission from my mortgage company?

Thanks guys!!

[MelanieGiles]

I think all of those options could be viable, but discuss them with your own IP for definitive advice.

[Zeb]

I too have just sold my property and my IP is wanting all o my equity leaving me nothing for relocation costs
Is this always the case, can I appeal?

[Jojoey]

Yes I really want to understand how that works - hopefully Melanie or another of th IP's will be along soon to confirm. The situation.

I am actually leaning towards renting my place out as I think I can get £675 maybe even a bit more. That would be great as that would cover my mortage and we could rent up in Manchetser.

[MelanieGiles]

If your rental income would cover your costs, I would try and hang on to the property as an investment for your future.

[Tina Shortland]

Hi Jojoey, if you feel comfortable renting your property out then that sounds like a sound decision as it will free you up to change your living arrangements, save you on commuting costs and also leave you with an asset for your future. You'll need to look into the extra costs and responsibilities of being a landlord and make sure these are taken into account in your new I&E with your IP. Have a chat with them asap to talk all this through in more detail and find out what happens next in terms of the process.

To answer your post Zeb, no it is not always the case and it sounds rather unfair of your IP to not allow anything for relocation costs, go back to them to see what can be done. Keep us posted both of you!