I am currently in a dmp with payplan but my creditors are still charging interest, I am looking into entering into a iva as one of the banks has advised that they are going for a charging order against my house, this was an unsecured loan, i am currently in 37K debt and paying back £400 a month through dmp, The only thing that really concerns me is that i do have equity in my house of about 40k. can anyone advise whether iva would be the better course of action for me.
If you have £40k equity in your property, then an IVA is probably not going to be a sensible solution for you - but have you confirmed the property value by a professional valuation?
House prices have tumbled over the last couple of years, and if your creditors are going to start taking legal action against you notwithstanding the fact that you are paying them back, an IVA would be a better solution if you worked on a forced sale basis for the property rather than open market - which is probably more realistic these days.
Payplan do have an IVA department, but you could also try another firm if you felt there may be a conflict of interest with your current provider.
Do you have to be insolvent to go for an IVA? With 40k equity(I know its of no use if you cant get to it),and only 37k of debt(only!!),doesnt that mean that you arent actually insolvent?
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
Yes - you do have to be insolvent to propose an IVA - but the test is not necessarily on the basis of assets and liabilities, but an inability to pay your debts when they fall due.
Ahhh ok,thanks Mel,it was explained differently to me in that assets would count towards working out your solvency(it was the 1st interview at CAB and the lady did say she wasnt an expert).
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
Hi
So if someone has equity exceeding their unsecured debts they can propose an IVA because they can't meet their contractual payments ? is that right Mel ?
I always thought that creditors would just expect someone to sell up and clear their debts if the equity was greater than the unsecured debts ?
Regards
Nothing to stop them proposing it Andy, but that is the easy bit! Getting creditors to accept the proposal - now that may well be a different kettle of fish - although it can be done if the reasons are right, and I have done so on several occasions in the past for very good reasons, all of which have been accepted by creditors.
I must stress here, that this is very much the exception and not the rule, however.
Hi
That is the beauty of the insolvency industry, no one case is the same as another and no one rule set in stone. However that also makes it very difficult to ever give difinitive answers !!
Regards
Quite! But I can generally advise based on the facts in front of me, and thankfully we don't get it wrong too often.
A good IP will make themselves very aware of what is happening in the marketplace, and act upon that intelligence to enable best advice to always be provided. This is one of the reasons I find the forum such a valuable source of information about what is going on, and who is doing what to who!!
