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I am in a well paid (and relatively) secure job with a monthly income of around 2500 per month.

I have personal unsecured debts of 67500.

My wife normally earns approx. 1500 per month and contributes 400 to the household bills with myself picking up the rest. We have a joint mortgage of 175000 on a house that is currently valued at 216000.

We have a 3 month year old baby and my wife is currently on Maternity leave being paid only Statutary Maternity Pay so a significant drop in our household income, and I am picking up the 400 shortfall.

My wife knows I have debts but no idea of the true level, I am of course scared to come clean with her.

I have done a rough expenses calculation and worked out that I need 1970 per month to pay for all household bills, mortgage, living expenses etc. Against this I have (or will have once my wife returns to work) an income of 2900 per month (2500 + 400). So the surplus disposable income is approx. 930 per month.

I don't want to lose my house, and my wife whose father went bankrupt a few years ago has very strong feelings about equity release to clear debts so I know she would not be happy with the house being part of a potential IVA. I guess my question is (and I recognise that with the detail I have provided a categoric answer is not possible) would an IVA paying 900 per month clearing debt of 49500 (assuming 75 pcm fees) against a debt of 67500 seem reasonable? And therefore is it possible to reach an agreement that does not involve remortgaging/selling the house for equity release?

I am new to all this so excuse any naivety!

Hello barbervi and welcome

I am not an expert just another person dealing with debts, there will be an expert along shortly to answer you in more detail, just wanted to take the time to tell you that youre not alone.

I realise and appreciate that you do not want to release equity to clear your debts but youre only just insolvent with the amount you have, and F and F IVA would be a good way forward. A 5 year IVA would almost certainly involve equity release at some stage.

I also understand the position that youre in with your wife but she would find out if an IVA is the solution and it looks like the very best option for you. I feel that if someone you love is suffering in silence, I would want to know, however distrubing the truth might be. I know its a mountain of money to you but not that bad in terms of a solution.

With your level of income I would think you've every chance of suceessfully ending this nightmare.

I hope that an expert will be along shortly to offer better advice than I could.

Good luck

lily

Lily, I couldn't agree more with your post.

Barbervi, until you can come to terms with the issues that Lily raises and address them, an IVA would not be right for you.

Hi
Great post from Lily
An IVA will,in all probability,take a bite of your equity so there is no way round that one I,m afraid.
A DMP will not affect your equity and with a high disposible income it may be an option that you could look into.
Maybe if you confided in your wife she may contribute more to the household bills,giving you enough income to service your debts in full.
I,m sure that your wife will totally suport you and will be glad that you told her of your worries.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

You will definately not avoid an equity release clause, and no IP will take a case on these days without a willingness to agree to such provision - again this has been stipulated by creditors and not the insolvency profession.

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

Hello Barbervi and welcome to the forum.

If you are looking for an IVA firm to represent you, you might find www.IVA.com useful. We maintain a list of IVA firms and IPs and publish reviews of their services that have been posted by their clients.

Good luck with finding the right solution for you and please let us know how it goes.

Kind regards,
Terry Balfour
IVA.com

IVA.com - Comparing IVA firms by using consumer feedback.

Please rate your IVA firm or Insolvency Practitioner by reviewing them here: http://www.iva.com/submit_iva_review.asp

thanks for your helpful responses. I will address the issue with my wife but wanted to do so from a position of knowledge rather than a position of panic!

I accept equity release is inevitable. From reading through the forum it seems generally is expected in year 4 of a 5 year IVA and if it is jointly owned only my share would be available to my creditors, can anyone advise how the equty is calculated or is it simply a provision that in year 4 I would have to remortgage to release my share of the house's equity (however much that is by then)?

Hi
Generally it will be 85% of your equity but you will also only have to raise a maximum that will cost you no more than 60% of your disposible income.
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Have spoken to a few IVA companies. I am (it appears) technically insolvent in that I could not repay if asked my debt, (75K a bit higher than my original 67.5K estimate).

However, a third of the debt (33%) is a loan and thus is being paid off. 10% is overdrafts and therefore no 'contractual' payment is required, so the remaining 57% is on credit and store cards and therein the problem.

I am currently meeting all my payments. I am not in arrears, not in default. I am not suffering annoying letters and calls from creditors clamouring for their money.

I am therefore very lucky in that regard.

Interestingly it seems because I have thus far met my payments and considering I am guaranteed a pay increase of 3.6% next July plus my wife's return to work at the end of October (thus vastly improving my financial situation in terms of disposable income) I would not in fact qualify for a DMP. Creditor's it seems would not entertain any entraties along these lines as it seems as far as they're concerned there is no problem because there have been no missed payments. So I am insolvent but do not require a Debt Management Plan.

At present then, an IVA is not for me. My debts are my fault. I have lived beyond my means, spent money that was not mine to spend and given little thought as to the consequences. I have had a great time, but been a naughty boy.

In 5 years my loan is paid off. My debt will be reduced by 33%. I have calculated that by sticking to a budget (not disimilar in scale to the type of budget an IVA would impose) I can claear an additional
23% of my debt - a total of 56% total debt. A divident of 56p in the £ without an IVA or DMP.

Therefore I would not consider it moral for me to attempt to get the reminaing 44% written off as I would be in a better positon to clear the remainder of the following few years than I am now. Still insolvent but living within my means.

Lofty goals, and I may well fall off the wagon and end up where I started (or worse) but I have to try. My circumstances may change and I may find in 6 months I do need an IVA, but for now I'm going to do my best to repay in full what I borrowed. Its my responsibility after all. Wish me luck and lets hope I don't come back hat in hand and tail between the legs anytime soon... its scary!

Hi barbervi
You should be applauded for your post above.
I wish you luck and think that you have taken the correct path,you are probably just on the edge of being able to cope or not
As you say if it becomes impossible then you can look at a solution in the future.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Andy, when you say 60% of your disposable income, does that mean 60% of your IVA payment at that time?
e.g. If you were paying £500 per month, the equity release payment would be £300 and you would continue to pay £200 till the end of the IVA period?

Hi
Yes that is how I understand it,I wonder if Melanie/Catullus can confirm this ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Just to let everyone know I still monitor this site and devour all the posts... I am still planning on living on an IVA-esque budget and clearing where possible as much debt as I can over the next 5 years although it is going to be difficult and I may well need to re-assess my plans.

The good news however is that I came clean with my wife, and was so pleased at how she too it. She has been so supportive and even amazed at how well I have been coping with the stress and difficulty without showing. she had no idea about the level of debt I had built up but said "its only money, and you'll never lose me or our son over it!" I just thought I'd share this for anyone only just coming to terms with their situation who, like me, was frightened of how their partners/family/friends might take it.

Whilst my debt problem remains, I can't tell you how much more confident I am at being able to resolve it now my wife knows and supports me!

Hi barbervi

That's good news - glad to see you are still on track, wish you all the best for the next few years

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Excellent news!!!
I’m so glad you gave this step forward!
I wish you all the best.


Regards,
Michelle P.