Hi i have been talking to people over the last few days about IVAs.It might be the way forward for us not sure yet.I do have another option.But i do not no if i could go through with it.My mum owns her house and it would be left to myself and my brother,when she passes.(not nice).I have been looking into equity release.Do you think i would be wrong asking,or do you think it helps us now. Tammy
If your mother was in a position to release some or all of your share of the inheritance creditors would probably be happy to accept that provided you did not also have a large surplus income. However, the equity release would have to be repaid and probably over a much longer time than an IVA. If you have no income or assets bankruptcy may be the best option or a five year arrangement may be suitable. Bear in mind there is a windfall condition in both bankruptcy and in IVAs so be careful before you decide which way to go.
If your mother had savings or investments that she could offer it would be better than raising finance and also be aware that your brother would need to know what is happening as the asset to be mortgaged would in the future be 50% his.
Thanks,i have not decided yet. But i think if she agrees then maybe myself and my brother can have a bit of a better life now. With out going IVA routes.She owns her house and is worth around £190000,i would be looking at releasing around £40000 split two ways. Do you think this is bad of me.
I have just spoken to someone about equity release, they said you dont pay any monthly fees like a loan. What you take out incures interest over the period of time untill death and then gets taken out of the estate.
Be very careful Tammy as what is being proposed sounds like an equity release plan and when your mother does pass the property goes to the insurance company that advanced the cash. Surely it would be better to raise a mortgage on the property and you and your brother could repay it or go bankrupt and you would get half of £190k down the line.
There could be very little if any remaining equity in the future if you decide to go down this route so make sure and take proper advice.
I agree with Michael - a mortgage will enable your mother to retain ownership of her property and you and your brother can guarantee and fund the mortgage payments from your disposable income.
Make sure that Mum gets independent legal advice as well if you decide to go down this route, as she needs to understand the implications of her actions moving forward. For the record, I think your plan is a very sensible one so long as your Mum is happy with it as well.
