will my parents qualify for an iva?

[rosie]

hi,my parents have a debt of unsecured loan for 135000 and a mortgage of 68000 and the house they are in is valued at 200000,do they qulify for iva?

[MelanieGiles]

Hi rosie

Do you really mean that your parents have one unsecured debt totalling £135k, or is this the total of a number of debts?

As your parents have equity in their property, which is more than the amount they owe, then an IVA will not be possible unless there are exceptional circumstances.

What I suggest they do is explore the cost of re-mortgaging the property - perhaps by taking an interest only loan for a while until they get back on their feet - and then using those monies to substantially reduce their debts.

With that sort of money (they ought to be able to borrow up to 95% of the property's value), they ought to be able to seek discounts on settlements, and perhaps reduce their balances to an affordable level if they do not clear them in full.

Hope this is useful, but post more if you want to.

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

[rosie]

hi,can they not go in for lump sum iva settlement?

[MelanieGiles]

They could try - but I could advise better if you give me a breakdown of that £135k between both of them, and let me know whether they have any joint debts.

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