Move house while in IVA?

[essexboy]

Hi all,

I have just found this forum last night and have been reading through the posts on here.
I have approx 60k in unsecured debts and looking at an IVA as an option. Also I am looking at moving to a smaller house to reduce our outgoings. Is it best to move before starting an IVA or after? Does it matter? How will an IVA affect getting another mortgage should we want to move house in the 5 years of the IVA?

Thanks in advance for your advice.

[MelanieGiles]

Hi essexboy and welcome to the forum

If you are stuggling with debt now and, given the difficulties with the housing market at the moment, I would personally enter the IVA at this point in time and build in the selling of your property and downsizing as a part of the arrangement.

If you want to move house during the arrangement, so long as this does not disturb the IVA, then there ought to be no problem, but in today's mortgage climate it may be difficult to find a mortgage whilst you are in an IVA. Is there any reason why you feel you might need to move again if you are moving at the start or during an IVA in any case?

[essexboy]

Hi Melanie,

Many Thanks for your reply, I have read other threads and hoped you would reply to this one with your expertise! [:)]
We are looking to move anyway but my point in the above post was how having an IVA would impact on moving once the IVA is in force. I have some equity in my current property so if I were to move to a smaller residence (before or after applying for an IVA)would that equity (then used in the new house) be asked for to pay off some of the 60k (approx) I currently owe? Surely this would then leave me with less expendable income to pay off an IVA?
I am new to all this (as you can tell) and appreciate all of my details are not above. Was just wondering if its best to move house before applying for an IVA if getting a new mortgage would be more difficult once I was under one?

[MelanieGiles]

If you enter an IVA with your creditors, you will be required to agree to raise equity on your property during the final year - based on a maximum 85% loan to value - so if you were to move, then the equity that you would create in the new property would form the basis for the future equity release in the IVA.

I think you would be better off speaking to a mortgage broker with regard to the possibility of getting a mortgage whilst in an IVA - my gut feeling is that you will but only at a low loan to value.