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| mandy123 |
Posted - 06 January 2010 : 16:32:34
Hi - I'm looking for some advice My partner is currently in a IVA Agreement - which we are about to fail, we can no longer keep up the payments. We have 3 children, For the past 2 years we have desperately been trying to keep our heads above water ( and have managed to with help from family) We own our own property (currently £30,000 negative equity) but can no longer afford to maintain - heat or even run the property (property is old and is high maintenance). Although we haven't defaulted on the mortgage yet but it's inevitable it's going to happen. I am really worried - we owe £24,000 in the IVA agreement. From speaking to the CAB it's looking very likely that Bankruptcy is our only option but I'm terrified of what it involves. Can anyone please offer any advice, I'm desperate for a full nights sleep and all the stress and worrying is seriously begining to affect my health, can anyone please advise?? :( |
| 5 L A T E S T R E P L I E S (Newest First) |
| mandy123 |
Posted - 06 January 2010 : 20:07:58
God thank you so much - just reading your reply makes me think we can actually put a plan in action rather than going round and round in circles. it's so daunting when you don't know anything about it but everything you have said makes perfect sense. I'm so glad I found this forum - I know I'll be using it a lot in the next few week, Thank you for your advice. :) |
| gettingoutofdebt |
Posted - 06 January 2010 : 18:28:39
From what you have said life sounds pretty miserable at the moment with no heating, ill health, reduced working days and arrears I am sure this was how you envisaged life when you entered the IVA.
I would say that BR is going to be the best/only option for you but you should still speak to your IP to advise them of your situation and you could also speak to one of the firms below:
Jones Giles - http://www.jonesgiles.co.uk/
Reviva UK: http://www.revivauk.com/
These are firms that post on this board and are very highly respected.
If you do declare BR it needs to be planned. Rather than looking at the fact that you are about miss your 2nd IVA payment, look at it the other way around and say that you have 2 (2nd and 3rd missed payments) months of extra money as you can use the IVA payment for other purposes.
You are going to need to:
- Save £1020 for the BR fee for both of you. If the mortgage is joint and there is no way you can afford it then you would both need to declare BR otherwise the debt would pass to the non-BR person.
- Look for somewhere else to live. Most rental agencies will run credit checks. You have little/no chance of passing these once you are BR; I am not too sure of the situation if you are in an IVA. I assume your credit rating isn't good when in an IVA either. You don't have to tell prospective landlords that you are planning to declare BR. Private landlords don't normally run credit checks so these may be the better option. Don't rule out the Council either as they may be able to find you somewhere especially as you have children.
- If you are going to give up the property then you may as well stop paying the mortgage as well and use this money for BR fees, rental deposit, etc.
- Once your IVA fails and you stop paying the mortgage the creditors will start to call you. You should be safe with the mortgage company for about 6 months as they will be fairly ok'ish for 2 missed payments and then probably start to get a bit more persistent once the 3rd payment is missed. Other creditors that you are currently paying in the IVA may not be so forgiving so you may get calls from them as soon as the 3rd IVA payment date has passed. If you still have access to your creditors then it may be worthwhile buying a cheap PAYG mobile, putting £10 on it and then updating your contact details with the creditors to this number. It saves them calling the landline all of the time and means you can switch the phone to silent (or off) and aren't cringing every time the phone rings. Once you are going to declare BR there is no point talking to the creditors. All they can do is threaten BR but very few (other than HMRC and the Counail) will actually do this as it costs them money.
- You should set a month to declare BR and then stick to it. If you are going to stop paying the mortgage next month (if this months payment has already gone) then you would probably need to be out of the property by about the end of July as this would be 6 missed payments. Have a look around the area at rental properties and see how long it will take to save up the deposit/1st months rent as well as the £1020 BR fee.
Finally try not to worry. You have tried your best to clear your debts with an IVA and have stuck with it for 2 years so this will be a big plus with the OR (Official Receiver). You will also be pleasantly surprised at how much less financially restraining being BR is compared to an IVA.
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| mandy123 |
Posted - 06 January 2010 : 17:03:47
Im not sure - the IVA is only in my partners name but once the mortgage fails (which it will inevitably do this month) then the mortgage is in both names. The property is what has dragged us into this really - our circumstances were very different when we brought it but I had to take a considerable drop in wages after having to change my job due to ill health and then my partner got put onto a 4 day week mid last year which has really affected us. we can't afford to heat it at the moment so am spending most the time without any heating on, we are currently in arrears with the fire insurance with the freeholder but the property is just too much now to keep up and we are just struggling to pay the mortgage let alone keep it in any kind of state of repair. We have already failed 1 IVA payment so this will be the 2nd. it's really scary. |
| gettingoutofdebt |
Posted - 06 January 2010 : 16:52:00
You should also take a look at Skippy's blog (http://skippy13.blogs.bankruptcyhelp.org.uk/) as she was in an IVA before declaring BR. |
| gettingoutofdebt |
Posted - 06 January 2010 : 16:49:48
Hi,
The first step should be to speak to your IP. If you have kept up with the IVA for the last 2 yrs then it is a shame to let it fail if the IVA payments can be reduced, etc. It is in the interest of everyone (you, creditors and the IP) to keep the IVA going to give them a call and see what they say.
If you decide that the IVA can't be rescued then you will need to let it fail (3 missed payments) before you can declare BR.
The procedure for BR varies from court to court; some require an appointment in advance and others allow you to turn up on the day. You can find your local court at http://www.hmcourts-service.gov.uk/HMCSCourtFinder/ You should also check with the court whether they will need a certificate from your IP showing that the IVA has failed or not as some do.
The BR fee is £510 unless you petition at the High Court where it is £522. You will need to complete forms 6.27 and 6.28 and they can be completed online at http://www.insolvency.gov.uk/doitonline/doitonlinemenu.htm
It 'may' be possible to keep the property in BR provided you keep up with the mortgage repayments. You would be entitled to have the mortgage amount and the amount you pay for gas/elec as an allowable expense when you are BR regardless of whether the costs are higher than normal or not. If you have the recent elec/gas bills to show you pay a certain amount then the OR would have to accept this. You could buy the Beneficial Interest (BI) in the property for £1 + £211 fee.
Are both of you intending to declare BR or just your partner?
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