www.iva.co.uk

My husband is trying to get an individual IVA through after his company went into administration which had numerous loans with personal guarantees. I have some questions about it which I hope I can get some advice on here. We are home owners but the property has two mortgages against it. One is the original mortgage that we took out. The second is a mortgage that I agreed to however, the money was used to put into the said company that's gone into administration. The agreement between us was the second mortgage got paid back by the company and that this was his equity that he was taking out of the property. Will the IVA company take this into consideration or will this not even be considered and that it is a 50/50 split because the property is in joint names and so are the mortgages? I am just concerned that if the IVA goes through, I have read in the 5th year you have to try and remortgage so I am not sure how that would work given I have the larger equity share in the property? Also, at the moment I'm paying for all household bills and the mortgage and have been for 6 months. It's tough and we need to move to a smaller property where there are less outgoings. If we move, 1) does an IVA impact the transfer of current mortgages in both names. Would we still be able to transfer the mortgages to another property or could the mortgage company just say no? By moving we would reduce both mortgages as we would be moving into a house of lesser value 2) Related to the equity share. Would the IVA company take 50% of any equity when we sell or would they take the share based on the fact my husband took used the second mortgage to fund the failed company? 3) We have had the house independently valued. If the house sells for more than that valuation, I'm assuming my husband has to give his share the the IVA company?

Hi,

I'm afraid I have no idea on this one as it is rather complicated. Hopefully one of our posters or experts can assist. In the meantime speak to a couple of IVA companies - avoid the big 'factories' and try smaller firms with the more personal touch.

If your provider uses the new 2021 Protocol, the equity release provisions will be agreed upfront, so you can get all the information before you commit. Details of the new IVA Protocol can be found here: 2021-iva-protocol-in-force-t91966

On the question of equity --- on paper as joint tenants you are each entitled to 50% of the equity. If you are tenants in common you are entitled to the shares relating to your ownership actually stated in the deeds. Again, as far as responsibility for the joint mortgages is concerned, unless respective percentages are part and parcel of the loan agreement ( unlikely), you are each jointly and severally liable --- so, if one party defaults, the other is fully responsible for the whole loan. Unless you have legally binding agreements regarding the split it will likely be assumed to be 50/50.

Regarding moving the existing mortgages elsewhere, during the IVA, this would be very unlikely, unless you can do this in your own name, as your husband will fail the credit checks and is also prohibited from taking any new credit without his IPs permission. It might be possible to downsize by keeping the existing mortgagor and securing it on the new property, but, again, as this would affect the equity available to the creditors, it would need the close involvement of your IP.

As the previous poster suggests, speak to a few companies --- you are likely to get a better service, in view of the potential complications, from a small to medium sized firm, rather than the factories, who are more 'off the peg'.

Thanks for the replies. He initially used one IVA company, I don’t know the name, but it got to a point I think they gave up. The IVA was rejected with no reason given and the IVA company stopped answering emails and calls. He is currently using PayPlan who are about to put an IVA offer up for voting hopefully soon. We will see.

Really you need to ask your questions to Payplan and get the replies in writing. It can be a disaster if you do not get this equity split clarified at the start.

As a general rule I would strongly advise NOT starting an IVA if you intend to sell the house. It gives you much greater flexibility. You may well not be able to port your current mortgages and in an IVA it will be VERY expensive to get new mortgages if it is even possible.

It used to be that Payplan took whole of household income to determine what needs to be paid.

As you are trying to distance from your other half's debts, be really careful on this.

Hi, i can advise you on this, but not on a Open forum as i would need to know more information on your current circumstrances.

They are looking at the entire household income which is frustrating as I feel like I am now trapped and dragged into it all.

@Ryan, happy for you to message me. Not sure how you can do that through this site?

You can contact Ryan via the link in his post above.

Mon Aug 30, 2021 9:40 amBonzie wrote:

They are looking at the entire household income which is frustrating as I feel like I am now trapped and dragged into it all.

@Ryan, happy for you to message me. Not sure how you can do that through this site?

He can't message you through the site. His contact details are on his profile page here: memberlist.php?mode=viewprofile&u=18488 as well as in the signature block under his posts. Best if you drop him an email direct.