worried that IVA will be rejected

[indy]

Hi,

Due to a (past) gambling problem, I have debts of around 56k. I hada shared mortgage with my wife, house valued at 210k and mortgage balance of 146k. Debts are unsecured and are in my name. Was in a DMP with Payplan for 18 months but then lenders took me off the arrangement.

Anyway, due to the misery I had caused, we made the mistake of remortgaging borrowing another 30K and did some work on the house (we knew we would probably never be able to afford to move and have 2 children).

While we were stupid to borrow more money while in this situation, (to be honest after all the misery I caused I wanted to do something nice for my wife and kids), we are now finding the DMP unmanageble (especially as there is now interest and charges being applied). I wish to enter a five year IVA, but am worried that it will be rejected on the grounds that 6 months ago we took out equity in the property for our own benefit rather than to pay the creditors. In fact we had already remortgaged 60k (I blew 120K).

Is an IVA worth pursuing.

[MelanieGiles]

Hi indy and welcome to the forum

There is no reason why you cannot propose an IVA, but you have identified a potential problem area in the recent equity release. Why are you finding the DMP payments unmanageable - and do bear in mind that an IVA requires ongoing payments as well, so why not ask Payplan if the payments could be reduced?

Would it be possible to argue that the recent remortgage was effected over your wife's share of the property, and that your share is intact? If so, then I would be happy to propose an IVA on the basis of ongoing contributions plus an equity release at the end, so long as it fitted other criteria - and importantly that you are cured of your gambling habit.

I suggest that you consult an insolvency practitioner to explore these options further.

[indy]

Hi,

This would mean I would have to try and remortgage for 95-100% of the value of the house in 5 years time which seems impractical. Is there any way of getting the IVA through with the release of equity being shared. Are we best leaving it a year (is time a healer?) and trying to renegogiate a DMP in the meantime.

Or perhaps even letting them have an equity review in 5 years?

Regards

i

[MelanieGiles]

You would only be required to release equity to the best of your ability during the final year of the IVA. If there was insufficient equity available, then there would be no money to raise at that point.

[indy]

Hi,

So is the release of shared equity a barrier to approval, if we state it as a shared release?

[MelanieGiles]

Don't really understand the question?