www.iva.co.uk

What are the differences between an IVA and BR apart from the IVA being 5 years and the fact that one might not get a mortgage again once they have been declared BR. (which I dont want )


Thanks

Regards
KiloHurtz

Hi Kilohurtz,

For me personally BR (Bankruptsy) was not an option I could consider as I jointly own my home with my parents as unless they could afford to buy my share which they could not, they would be forced to sell.

So that is one difference.

There will always be companies who will offer a mortgage to the un-mortgageable. The rates may be higher but for a couple of years it is worth considering.

There is always light at the end of the tunnel.



Just started my IVA as from 12.10.07


What ever deceision and choices we have ever made, are the ONLY and BEST decisions and choices we can make at THAT time with all the info we have to hand at THAT PRECISE moment in time - so no regrets!!

Hi

What a good question, 3 and a bit lines long. Normally I would expect to spend more then an hour in conversation with people explaining this one while taking note of there personal situation.
I will have a go at a quick summary just to get things started, I am sure other posters will add their comments.
An IVA protects the family home from creditors while in bankruptcy the family home could be lost to pay creditors.
If there is no equity in the property the OR may not force this,
or
if there is equity in the property and you go bankrupt, it can be possible for a third party to buy the equity (i.e a family member or other person)
In an IVA you make an offer to creditors based on your disposable income after all other secured creditors and household expenses have been paid. This is for a period of 60 months, if there is equity in the property the creditors will expect equity release towards the end of the IVA.
In Bankruptcy the Income and expenditure is accessed by the OR and a maximum of 70% will be expected to be paid for a period of 36 months.
Discharge from Bankruptcy is 12 months, but the average is around 8 months.
During the period of an IVA you are not allowed credit, with out the permission of the supervisor. Prior to discharge from your bankruptcy you are not allowed credit, and to be fair the chances are you would not get credit any way.
Post Bankruptcy (after discharge) you can apply for credit but most lenders as if you have ever been made bankrupt.
Both IVA and Bankruptcy stay on your credit file for 6 years
As regard to the specific statement of not being able to get a mortgage post bankruptcy this is incorrect as there are specialist lenders out there who will lend to discharged bankrupts, these loans do carry a premium.
This is a bit long winded but does not cover all the variables but I hope it helps in some small way.






Dave Beech

Hey Dave

Thank you for the informative reply.

I would be very interested in your views of my situation. I will keep it brief.

3 years ago I brought a house with a girl. I put £30k equity into it at the beginning but declined signing any document to state this fact and was aware that if it failed she would get at least half the £30K.

20 months ago I moved out of the house but have continued to pay for it without living in it or having anything to do with it. In order for me to get my ex to put the house on the market she demanded I gave her to 30k I put into the house. After a very long thought I decided to do it just to get rid of the house. I went to my solicitor and against her wishes the letter was drafted and signed and sent.

The house has been on the Market for about 9 months, it hasn’t sold for any other reason than the housing market just being slow. Besides the 30k I initially put into the house there is £10K equity on top which if it sold now would be split 50/50 after the estate agents and solicitors fees. I don’t care where my share goes but what happens with her. I have nothing to do with her other than the house, we were never married and no kids.

I have asked my ex to lower to price again and she has declined. There is no reason I should continue to pay for this especially after the life I had in the little time I lived in it.

In light of the above situation how would this fair if I did an IVA or BR.

Would the BR or IVA affect the ex and could it take any of the £30K that I have now legally signed over to her?

I did tell her that I am struggling with the house and that she is blocking me at every corner. When I mentioned a BR or IVA she seems to think that I would still owe her £30k no matter what I do. I tried to explain that I don’t have the money and my letter stated if the house sold I was only agreeing to not taking any of the first 30k.

I would appreciate any comments.


Regards
KiloHurtz

I take it the house is in joint names, and if this is the case if you went bankrupt the OR would claim you stake in the property.

In an IVA your equity in the property would go in to the IVA as a lump sum payment once the house was sold.

I cannot unferstand why you signed over 30k to her when you put the deposit in to the property, I an also struggling to understand why you are paying for the mortgage since you are not living at the house.


I would advise you get legal advice to see if you can get an order which will allow you to take over the marketing of the property.




Dave Beech

Hi Beechy,

Crazy situation eh!

The house is in joint names. I dont care whats happens to my stake in the house by this you mean the £10k equity and not the £30k thats been signed over.

Its a crazy situation but I couldnt sell the house without her permission as she owns half. Also I signed the money as the quickest way I could get the house on the market and sold. This has not been the case.

The only reason I continued to pay the mortgage was my agreement was with the bank and I didnt want to let them down. I was / am also scared as what would happen if I stopped paying it all together.

I guess I just tried to do the right thing even though this girl deserves nothing from me for what I was put through. But its just not who I am.



Regards
KiloHurtz

You need to get control of the situation.

If you stop paying the mortgage can she afford it on he own.

The loan you took out at the bank, was that just in your name and is it secured on the property.?

Dave Beech

Hi Beechy

No way can she afford it, the mortgage is more than she earns a month.

I initially wanted to sign the house over to her but 1: she couldnt afford the payments 2: the mortgage company would lend her the money as she didnt earn enough.

When you say the loan do you mean the mortgage or the loan I took out to clear all debts?

I will explain both

The mortgage was taken out in joint names. Even though I put in 3 times her amount every month but I know thats irrelivant.

The £20k loan I took out to clear all debts was in my name alone and no it was not secured on the house.



Regards
KiloHurtz

In a bankruptcy, your Trustee would be able to successfully argue that the first £30k interest in the property is yours, and the remainder be split on a 50/50 basis. In my opinion a Trustee in bankruptcy would easily apply to have that agreement overturned, and if you are thinking of proposing an IVA, this fact will need to be disclosed to creditors, and potentially a better and quicker return could be effected under bankruptcy rather than an IVA.

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