www.iva.co.uk

Hi everyone,

I have been reading posts for a long time but I felt it was time to ask a question of my own.

I was seriously considering an IVA but have opted instead to sell up and clear the debt that way, I am lucky that I have this option as so many others do not so please do not take offense but ultimately I still need advice and this is by far the best place to get it!

I have significant debts of approx £63,000 plus my wife has about £7,500. I have a good job, and we have £50,000 equity in our house.

We have sold our house (in the process of conveyancing at present) and are (hopefully) releasing £48,000 equity which is enough to clear all my credit card debt and my wife's debt leaving only £23,000 on a loan which I can afford to repy with no other debt hanging over me. this loan will be paid off in 5 years so I will be debt free. therefore at present an IVA is not an option for me and should not need to be.

The problem is one of cashflow and risk. If the house sale falls through, my wife and I cannot sustain our current commitments and I feel IVA is the only alternative at that stage. However even if it doesn't fall through (keeping fingers crossed) I am still struggling to make all my payments and with Christmas on the horizon its getting harder.

We are buying another house, but far cheaper and thus ridding ourselves of majority of debt and reducing our outgoings too. However if the sale fell through and I took out an IVA then I assume I wouldn't still be able to sell up and purchase the new property as planned and clear these debts as planned (unless it was deemed a reasonable final settlement offer). It may also be seen as favouring one creditor over another. also I assume I would have to pay a premium for the new mortgage as my credit rating would be affected.

So the way I see it now is the sale must go ahead, its my only hope. Is it reasonable to enter into a DMP whilst the conveyancing goes on so as to improve my cashflow in the short term, or would similar issues as identified above apply?

I hope I have made sense, apologies if not.

C:)

Hi cenzo74,

Have your solicitors given you an estimated date by which completion should be expected?

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

You could propose a full and final settlement based IVA on the basis that your house is on the market and can be expected to be sold over the next 12 months.

But can I just say how commendable it is to read a post from someone who could probably get an IVA accepted now, but wishes to repay the loan over the next five years to ensure that all creditors eventually get paid in full. Well done!

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

No indication of an expected cpmpletion date yet, nor when we we might expect to exchange. Obviously once we've exchanged I'll relax a little because you're protected but until then I feel very vulnerable and am worried that with a way out within my reach it could be pulled away cruelly...

No excuses for how I got into this situation, I just want to get out so I can provide a secure environment for my wife and children.

I've just got to hope I can sell the house as planned.

Hi Cenzo74, I'm sure when things are under control, you will feel so much better. I'm sure things will work out for you in the end. Hang in there, and stay strong.

Hi cenzo74,

I'm not sure how much value a DMP would have for you as a very temporary measure, especially if you expect the property situation to resolve itself in a matter of weeks.

It will take several weeks for some creditors to record on their systems that a DMP proposal has been received and then respond to it.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

Yes I thought that might be the case. My big fear (however irrational that may be) is that if the house sale falls through then my wife and I will have little choice but to opt for an IVA/DMP or declare bankruptcy. seeing as the intent will always be to sell the house a DMP would seem to be most appropriate in that scenario as it would be designed to enable me to keep making affordable payments whilst the house sale goes through and then the debts can be cleared. I was really thinking whether or not it is worth starting that ball rolling now just in case...

Provided that you had full information on your creditors (reference numbers and balances) there's no reason why an enthusiastic DMP company couldn't write out to your creditors within a couple of days of your instruction.

With that in mind would it be better to continue with the house sale as you are and seek another solution only if the worst happens?

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

Thanks, thats what I'll do. I am probably just being pessimistic without cause because I am so desperate for the house sale to succeed - it solves all our financial problems... provided it doesn't fall apart then I won't need the DMP so I'll hang fire for now.

One other thing though, the house sale will clear all my and my wife's debts with the exception of my personal loan. The loan has 5 years to run and about £23,000 left to repay. On my current salary I can easily afford the repayments provided I have no other debts (which I won't if I sell). If I were to enter into a DMP (assuming the worst) would I have to declare the loan or could the DMP be used to manage the credit Card debts only - on the basis that they will all be cleared in full once the house sale is concluded. I know that gives preferential treatment to one creditor and wouldn't be possible in an IVA but wasn't sure in a DMP?

Lastly, as the mortgage provider for my current houe is a creditor (and high street lender)and I had planned to use them for the purchase of the new house, If I entered a DMP would I have to seek a new mortgage in the sub-prime market on eventual sale of the house post DMP?

Of course, hopefully all this will be academic because we'll sell the house as planned to the buyer we already have at the price agreed and all will be well... (fingers crossed, lucky rabbits foot, touch wood etc!!!)

It wouldn't be appropriate to prefer a creditor in a DMP. All should be treated equally.

On the mortgage side of things it is not possible to say how you might be affected without a detailed knowledge of your case at the time in question. A DMP, like other debt solutions, is very likely to have a negative effect on your credit rating and you should factor this into your thoughts on the way forwards.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

It strikes me that your current decision is the work out the likelihood in your own mind that the sale will go through, and also when.

Also, if it falls through, what are you then going to do?

If it were me, seeing the current state of the housing market, I would go for a IVA or F&F IVA.