Topic: Can any one help am confussed and need some answers please?

[alig]

Hello All
I have come across this forum today and found it helpful but still have a few question in relation to my own personal circumstances that someone may be able to help me answer I hope?
Currently my husband and I have a joint IVA, which started in Feb 2009 (after being advised by the IVA company not to go bankrupt – we have unsecured debts of £63,000). We have not missed any payment but have just undertaken our annual review and been informed we are in breach of the IVA. This is due to me declaring that we have two credit cards with debt of £5,500, which we had at the time of the IVA being organised that we did not declare. I declared these as I was trying to stop our monthly payments from increasing as we have been living every month in our overdraft facility.
The company has now arranged a meeting with our creditors for the 27th May 09 in which they vote to either allow the IVA to remain with an extension of a year totalling another 5 years of payments or declare us as bankrupt.
My question is am I better to wait for the outcome of this meeting or seek now to declare ourselves bankrupt? We have made the decision already that bankruptcy is the only way forward for us but need to undertake the process the right way to ensure it works for us.
Also due to being scared of not making the IVA payments when I got a car bill I couldn’t pay (£800) I went to my mortgage company in order to use this money to cover the bill. I have since not made mortgage payments for the last 3 months now due to also trying to clear out overdraft (I know this is wrong but I have got myself into such a mess am not thinking clearly now about our finances). I have however made nominal payments to the mortgage company. We have decided now as part of going bankrupt we do not want the house, however the house is currently in negative equity.
Can anyone advise us what do we need to do in order to get rid of the house but not be held responsible for any short fall in the mortgage?
Additionally our income would be deemed as quite high after our debts had been cleared  by the bankruptcy so do I need to instruct a solicitor? As I am worried, I will swop the IVA payments for a bankruptcy payment order leaving us no better off in the long term.
I would be grateful for any advice received many thanks Ali G 

[AshleyPark]

Hi Alig
 
I would say you are best to await the outcome of the meeting later this month as this may save you incurring unnecessary costs.
 
Unfortunately there is no way to avoid being held responsible for the shortfall on your mortgage against the value of your house.  If you were to hand your keys back then the property would be auctioned off and any shortfall will be left for you to pay back.
 
Lee

[Sovereign]

Hello Alig,


I read your post with some interest and would like to start by asking you why you entered into an IVA in the first place and how much per month does it cost you?


As you have said, you have breached the terms of your agreement by not declaring two credit cards. Technically, your IVA will fail as a result of this omission. Additionally, you still have an overdraft facility so that the upshot of your IVA is that you struggle to make the monthly payments and, regrettably, still carry unsecured debt. The meeting with creditors on the 27th may extend your IVA by a year, subject to the creditors agreeing, and this means that your first years payments will effectively been a waste of time and money, the fees will increase and in reality, you will start the process again.


You indicate that you are behind with your mortgage payments trying to clear your overdraft and you are really struggling.


Your house in in negative equity and in bankruptcy, the likelihood is that you will be offered the chance to buy it back from the Receiver.

Post again with more information and I will try and help you as much as I can. I do specialise in assisted bankruptcy. Best wishes.


Steve

[alig]

Thanks for your replies here are some answers to the questions you have posed to me.
 
Initially this process of debt crisis started about 3 years ago. Myself and my now husband met with separate debts that became unmanageable when we got together as we were struggling alone. We were advised by a financial advisor to go bankrupt 3 years ago but my father helped me out and paid of some debts. However not enough and we sold my house to wimpy and got a deal to move house in order to clear some more debts. Along with our separate debts then being put together with loans and a high mortgage.
 
We took out the IVA due not being able to make payments for our mortgage and unsecured debts as explained above. We are paying £657 per month but the IVA company are hoping to put this up. Although I have tried to show them we have struggled on this amount they are already asking from us.
 
Yes you are right after the creditors meeting we have been told if they accept we would have to pay an additional year of payments. I feel like we have got no were over the last year now. I am really upset as I was hanging onto just having another 4 years to go and the extra year makes it now feel never ending.
 
Yes, we are behind with the mortgage payments but do not want to keep the house after bankruptcy. We want to move into rented accommodation, as we do not intend to buy another house we want all debt gone. However, I don’t want to have to be held responsible for any shortfall in the mortgage so how can we avoid this?
 
Oh my head is spinning with all this I don’t know where or what to do for the best any more ideas for me please would be helpful many thanks again Ali G
 

[Sovereign]

Hi Ali,

That is a very sad tale and it is abundently clear to anyone that you have tried to repay your debts only to be effectively 'kicked in the teeth' after a year of making inordinately high repayments.

Going bankrupt is an option for you both. With regard to the house, you can if you both declare yourself BR, hand over possession to the mortgage company and walk away. The shortfall after resale would form part of your bankruptcy estate and would effectively be written off.

You will, in all probability, need to enter into an income payment arrangement with the receivers office whereby you will be asked to contribute towards your debts for a period of three years. This arrangement is flexible in that it allows for reductions in the payments should your circumstances change. The big difference with this arrangement howwever is that the receiver will only ask for up to 70% of your disposable income, not 100% as it is in the IVA, and, should you take the correct advice, you can include items in your list of expenditure that dela with car maintenance and even an annual holiday.

Before you take the plunge, you must take some advice. The voluntary handing over of your property has to be dealt with correctly to avoid you being chased for the eventual deficit.

You will also need advice as to how to rent a property, the time scale for all financial matters and how you can get all of your ducks in a line before you go to Court.

Hope that this helps.

Steve

[alig]

Oh thank you so much you have answered my questionswhich has now made these clear for me amny thanks again. I just need to find someone who will help me through this process without it costing to much money given the current lack of finances any ideas? thanks again Alison

[Sovereign]

Hi Alison,

You need to simply find the appropriate expert and email or give them a call.

Steve

[alig]

Thanks for your advice
 
I have another couple of questions should I start the bankrupcy process now so we are in control or wait for the outcome of the creditors meeintg?
 
Also how long will it take to get to Court?
 
Thanks Alison

[Sovereign]

Hi Alison,

I would advise that you take control and start the process asap. The amount of time that it takes depends on the workings of the court that is appropriate to you. It will be the same court as issued your IVA. Ring them and find out if they have an appointments system or a 'turn up on the day' system. If you let me know which court, I will do it for you and then advise the next step. The court fee is £600.00 per person unless you are on qualifying benefits.

Steve

[AshleyPark]

Oh thank you so much you have answered my questionswhich has now made these clear for me amny thanks again. I just need to find someone who will help me through this process without it costing to much money given the current lack of finances any ideas? thanks again Alison

Hi Alison,
 
A quick search of the internet will not only provide you with a list of companys that can help but also some feedback from people who have been in similar situation to you.  I think there may be an expert on this forum who might be worth contacting also. Any ideas Steve?!
 
Lee

[Sovereign]

Hi Lee,

My last post was removed for some reason! 

Thank you for your input though. I hope Alison can find the right person quickly, as she is clearly running out of time.

Steve

[Steven Jackson]

Hi Alison
 
I agree with the other posters that it sounds as though the IVA was not the right solution for you or your husband. You should certainly not start an IVA and still be left struggling to make the agreed payment and your mortgage.
 
Given your home is in negative equity, bankrutpcy could well resolve your problems. I suggest you do have a discussion with an expert independant to your IVA company who will be able to help you make your decision.
 
If you do decide it is the right soluton for you, you can then start to take steps to put bankruptcy in place straight away.   

[Sovereign]

Hi Alison,

What was the outcome of your problem?

Steve