Is having 2 cars going to be a problem?

[l.a]

Hi. I won't go in to too much detail now, suffice to say we have been on a DMP last 18 months owing £90k worth of debt (long story). £30k are now charging orders and we are in the process of selling our house to try to clear the rest.There will be about £25k from sale, which leaves about £64k debt outstanding (after the charging orders have been cleared).Have been advised to proceed with a lump sum IVA. Is this something you would advise? Also we have 2 cars in the household. 1 for my husband's work and the other for me as we live in a very rural area with no public transport and a 8 month old baby. Is this going to be a problem? Any advice to steer us in the right direction would be appreciated

[MelanieGiles]

Hi la and welcome to the forum

A lump sum IVA is one of the options available to you, and using equity to be raised from your property sale ought to bring a speedy end to your debt problems. If you are going to be left with disposable income following the sale, however, be aware that creditors may well call for a five year contributions based IVA on top of the equity monies.

It seems reasonable for you to have two cars given your circumstances, so I do not see that will be a problem.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[l.a]

Thanks for the quick response and I appreciate the word of warning about creditors wanting more although there is likely to be little, if any, disposable income left so hopefully that won't be an issue. You mention IVA lump sum is one option... do I assume the other would be bankruptcy or is there something else available to us?

It's good to know 2 cars won't be a problem... my husband's car is still on finance which we will continue to pay (worth around £3k) and mine is worth around £5.5k. I had heard somewhere that sometimes the values over £5k can be an issue, but presumably if we can make a strong case, we should be okay?

[MelanieGiles]

You could do a contributions based IVA with an equity release at the end. More and more I am seeing creditors wanting two bites at the cherry - ie ongoing contributions followed by a back-end equity release. The days of the full and final settlement from equity release may be numbered.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk