If we default will this effect our chances of iva

[ken.b]

I am a homeowner with about 50k left in the value of the house. I am up to 76k on CC's and have been useing them to pay off the monthloy bills. I earn 35 k, my wife does not work. We are about to try the IVA route. My Question: Should we pay the monthly bills now as we have been via the remaining balnaces before we try IVA or do we default now? If we default will this effect our chances of getting an IVA?

[steve_]

Hi Ken
I am no expert at this but from my experience you have to default on paying things otherwise it looks like you can afford to pay, the whole point of an IVA is for people like you and me who cant afford to pay!
So in a nutshell to get an IVA you have to be insolvent If your paying your bills your not insolvent... Hope that makes sense.
Like you I was living off credit cards but it cant go on forever so you have to bite the bullet,I defaulted on my payments just after I had passed on my info to my IP , thereafter everything was done within about 8 weeks by wich time we had recieved a few reminders but not much hassle at all.
Hope this helps and maybee some of the pros on the forum can offer better advise.
Rgds
Steve

[scaredkez]

you do not have to default on your credit cards etc to be insolvent, most of us here have been able to pay to the last but what we are doing is using credit to pay for our daily living, to work out if you are insolvent work out what you pay out each month with out including your unsecured creditors.
if your outgoings is more than your incomings then you are probably insolvent, work out properly what your income and expenditure is with our your insecured debt then tell us what you owe and what you can afford and then we may be able to help you in what road to take
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[aguise]

Hi
As Kerri says a lot of us were up to date but using credit to survive, we were still insolvent. I didnt miss a payment until after the iva started but that was the point where there was no more money and no more credit and we knew we had to do something about it.

Ang

[ken.b]

I'm not even sure I will qualify for an IVA, plan to make the phone call next week. I need to get all the facts and figures first, and deal the emotional side over the weekend.

What concerns me most is that during the five years all of the equity will be taken from the house. Circa 50k as we stand today.

Thanks for the advise Guy's, much apreciated. Ans it's actually quite nice to hear from other people who have been through this, know the pitfalls etc.

[ken.b]

I'm not even sure I will qualify for an IVA, plan to make the phone call next week. I need to get all the facts and figures first, and deal the emotional side over the weekend.

What concerns me most is that during the five years all of the equity will be taken from the house. Circa 50k as we stand today.

Thanks for the advise Guy's, much apreciated. Ans it's actually quite nice to hear from other people who have been through this, know the pitfalls etc.

[aguise]

Ken
If you post your income, expenditure, and the equity in your home debt minus creditor payments , then one of the experts will advise on possible solutions. Read the posts and get as much info as you can. Also the companys on this site are a good place to start as they all have good reviews.

Hope this helps
Ang

[ken.b]

Income £2166.93
Bills, inc mortgage £1873.83
CC's £2088.81
All above PCM
Total debt on CC's £76000
Mortgage £160000
Property value £210000 est

Thanks Guy's

[ken.b]

Forgot, My Wife gets a £340 payment per month invalidity. But that will probubly stop soon and she will be signed fir for work.

[aguise]

Hi again Ken
I'm not clever enough to give an answer hopefully someone with a bit more understanding of the figures will advise soon. The only thing that may be possible is to offer a full and final iva by way of a remortgage this would mean remortging and offering for eg 45000 to clear the debts I think this is what andy has just done hopefully he will have a look soon.

Ang

[Adam Davies]

Hi Ken.b
On the info that you provide you have a disposible income of about
£300,if your wifes income does stop altogether .This will only provide 18k over the 5 year IVA term less fees of about 8k.So 10k on a debt of 76k will not produce the minimum dividend of 25p in the £ [ more if MBNA are one of your creditors.]However your 50k of equity may be something that you can use to offer as a full and final settlement if you sell up, or you could use some of the equity via a remortgage now and your disposible income over a five year IVA
You need to speak with several companies before deciding an I would suggest using some companies that post n this site.
Good luck


Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[ken.b]

Looks bleak dosen't it.
I cannot get a remortgage as my earnings will not be anough to meet the outstanding balance, as I understand it. 4 x 35k and I already have 160k outstanding. My wifes income of £340 will be replaced by a job seeker allowance, what ever that is these days, so we are not as low as £300 I think. Either way if the minimum is 25p for every £1 it looks like we will be selling the house. Not looking good is it?

[ken.b]

Just some some sums and ended up with this;

25p in the £1 on 76k = £12,160
£12,160 + est fees of £8,000 = £20,160
£20,160 / 48 months = £420 pcm

We can do £420 pcm I'm sure. My Wife will get a job at some point but until them will get seekers allowance.

Are these figures in the ball park ?

Thanks

[thebear29uk]

Hi Ken

Is your mortgage interest only or repayment? If repayment you could remortgage on a fixed term interest only to bring the payments down or borrow more at the same amount you currently pay. I'm sure the 4x rule doesn't apply if the equity is there. If on the other hand you are on interest only do you have an endowment policy. This could be cashed in giving you greater disposable income and an up-front lump sum too.

It would be worth talking to Tony Parsons (WelshBoy)who is a mortgage advisor who specializes in dealing with people in our situation. He will be able to get some figures for you to see what might be achievable. He helps a lot of people on here and I highly recommend him. He drove from Cardiff to where I live on the South Coast for a 1 hour meeting before driving back to South Wales for another meeting that evening.

Hope this might be of some help

Dave

[Sadsack]

Hi ken.b

Andy is correct. If MBNA, Northern Rock, HSBC or Household Bank are any of your creditors, they will not accept 25p in the £ - rather closer to 41p. I do understand the problem regarding remortgaging the property and trying to afford the payments - I have been down that road and Self Certified on a No Proof of Income and now have an interset only mortgage which does not help the cause. I too have no wish to "lose" my home after putting my heart and soul into it, but sometimes I guess we just have to let go. I know that this is probably not exactly what you want to hear, but making a full and final settlement offer by releasing the equity in your home, might be the best answer.

Take care
S