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Hello,
I'm single and 28 and earn £40,000 a year. I have a £157,500 mortgage and there is about £40,000 equity in the property but as I have an interest only mortgage, releasing that equity is not an option (i'm tied in for another three years and the deal I have means that you can only release up to 75% of the value of the property)I have £40,000 unsecured leading (I used to earn a much higher annual wage) which I cannot keep up the payments.

I contacted the CCCS but am struggling to keep up with their recomended amounts. The recent interest rate increased my mortgage payemnts by a £100 a month. Other aspects of my personal circumstances have also changed. Is an IVA an option for me? I'm concerned about the affect it will have on any mortgage applications I may wish to make in the future.
Can you please advise me.
Thank you.

Hi clairl and welcome to the forum

You are barely insolvent, but I imagine with a prudent house valuation your equity would probably reduce from the £40,000 you have quoted.

How much did CCCS say you have to pay per month, compared to what you think you can pay? If you send over that information I can advise further.

An IVA will ultimately effect your credit rating, but not to the extent that you will be unable to mortgage again in the future.

The most important thing to prioritise now is keeping those unsecured creditors under control - especially given the equity in your property which is up for grabs if they start proceeding with Charging Orders.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Hi Melanie,
Thank you for responding to my question.
In answer to your question ref the CCCS - they recommended I pay my creditors £763 a month. However my personal circumstances, since the CCCS arrived at that figure, have changed. My monthly take home pay has dcreased by £165, my mortgage has increased by £115 and my council tax has increased by £25 a month. Also, my student loan, which I had deferred due to serious illness, has now become active again and they are demanding money which I simply do not have.
Also, my estimate that there is about £40,000 equity in my flat was, according to a property developer friend, a bit generous. He estimates that if I was sell my property at market value, I would realistically achieve £185,000, £190,000 at the most. The mortgage is £157,500.
Bearing this information in mind, do you now think an IVA is something I should consider?
Thank you for taking the time to consider my situation,

Best wishes,

Claire.

Hi again Claire

Yes the numbers are making an IVA look more attractive.

You could do this by either selling the property and using the equity released to effect a full and final offer of settlement, or propose a five year based IVA based upon affordably monthly contributions, with an equity release at the end.

I suggest that you now seek more specialist advice on this matter - which any of the experts on the forum would be delighted to provide.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk