www.iva.co.uk

Me again[:I]
I am still dithering what to do but have been speaking to one of the companies and am onthe verge of going for an IVA but i have had a problem arise today.
Our mortgage was on interest only for last 12 months and they have now said it is reverting back to normal payments.
Basically this increase is wiping out our surplus that we would have been offering as payment into the IVA..... so my question is..... if we were to sell our home now and didnt make any profit on it ( we have virtually no equity at current value) would we still be looked on favourably by our creditors for an IVA? We would be moving into rented property after we sell.
Thanks for any advice![:)]

Hello gmac, just wanted so say welcome to the forum from me.

Your question is an area of IVAs Im not an expert on, but one will be along soon to help.

I wish you lots of luck with your journey & keep posting.

You may be able to convert back to interest only mortgage.It may be in you own interest to speak directly with your mortgage provider. You dont have to go into any details about a IVA.
Whilst in an IVA, it may not serve you well if you gain any equity on your property.
If you sell dont forget you have legal fees/ etc to pay as well as advance rent on a future property as as remval costs etc etc

Hi, I would definitely talk with your chosen IP about this change and see what s/he suggests in the first instance. I reverted to interest only at the start of my IVA but it's reverted until I change it back, is this an option for you? x

Hi gmac - do speak to your chosen firm before making any decision.

Lots of people - myself included - rent while in an IVA and it has no bearing on the creditor's decision. It is based on what you have rather than what you don't have.

It does sound quite a sensible plan if your IVA is more important to you than being property owners. If you are reluctant to sell, it may be worth re-visiting the DMP option.

Hi Gmac,

You do need to speak to your IP and also see if you can remain on interest only with your mortgage.

Do you have any equity in your property?

Could you rent a property for a similar sum to that you are currently paying on your interest only mortgage? If so, then a sale would seem sensible so long as you would be left with enough money to cover the agents and solicitors fees. Alternatively, why not consider bankruptcy proceedings.

Hi All
Thanks for the replies
Mel- i can rent for the same amount as my interst only mortgage.
I have already asked our provider to extend the interst only period and they can only do this for another 6 months[:(!]
everyone else........ if we sell the house before entering into the IVA and we made a small profit after legal costs etc would we have to pay that over to the IVA?

We sold out house at the same time as entering into our IVA - no equity was in it and we moved into rented. Our mortgage payment was £350 a month and our rent was £625 a month -this was taken into account when the I&E was approved and the creditors voted in our favour.
Living in rented does come with some security as you know that if things go wrong your landlord has to undertake the repair work - and whilst in an IVA to a certain extent it does provide added security !
However, the downside of moving from home owner to renting is we were only able to rent if we paid 6 months rent up front - this was a struggle to find,but the IP we used allowed us to build up some money whilst the house sale went through.

Talk it through with your chosen IP to ensure all options are explored.

Good luck !

If you were holding the surplus funds generated from the sale of the property, then they would have to be disclosed and handed over for the benefit of your creditors, but most good IPs will allow you to retain a small contingency fund to cover unforseen expenditure during the early days of the IVA.