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Dizziediva2011
- Posts: 14
- Joined: Tue Mar 29, 2011 9:04 pm
- Location: United Kingdom
Hi im considering applying to do an IVA i have £30000 worth of unsecured debt. I have been reading this forum and see that the creditors can force you to release any equity in your house, and i have equity in my house.
If they can do this is there any point in doing an IVA would a DMP protect the equity or not?
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Adam Davies
- Posts: 14596
- Joined: Thu Mar 29, 2007 12:21 pm
- Location:
Hi
A general condition of an IVA is that you will be asked to try and remortgage in the final year and release some of your equity.The reality is that you will find it very difficult to do this and will more than likely have to extend your IVA by one year.
A DMP is informal and there will be no requirement for you to release equity, however creditors can look to obtain a charge on your property, effectively turning an unsecured debt into a secured debt.
How much equity do you have ?
Regards
Andam Davies
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Broke of London
- Posts: 7761
- Joined: Sun Sep 05, 2010 6:04 pm
- Location: United Kingdom
Hi Dizzie,
Welcome to the forum!
The point of an IVA is get you out of the financial mire and ensure you can meet your essential living expenses every month. Over five or six years you pay back as much as you can and the rest is written off. Many people repay their debts in full over that time.
If you have sufficient equity in your property, it might be worth using this to pay your creditors.
An IVA is a form of bankruptcy and isn't worth entering just to cut your debts down if you can afford to repay them by other means. It could well plague you for the rest of your life on mortgage forms, job applications and such like.
