IVA - case study
IT Professional - Surrey
I started obtaining credit from various sources over
the last 8 years for everyday spending. I was in
work at I was made redundant after 25 years of
service as an IT professional at 55 years of age; I
had a wife, children and a large mortgage. The
payout didn't last but unfortunately my 'very good'
credit rating kept things afloat for probably too
long, allowing credit card debts and associated
interest to build up to a massive level.
I searched the internet for companies that helped
people to manage debts (not debt consolidation
companies as I was not in a position to borrow
anymore).
At last I got help when I found The Debt Advisor. I can't remember how long I was on
the phone to The Debt Advisor for, but they listened to my situation and explained
possible option, which included keeping my house.
I managed to get a job, albeit low pay, but enough to enable me to put a proposal to
my creditors, to pay off a percentage of an agreed settlement figure for my debts over
a five year period.
From this point The Debt Advisor dealt with my creditors on my behalf and the
creditors continuous phone calls to my house day and night eased, until they ceased
completely.
DEALING WITH THE PROPERTY IN YEAR 5
A protocol has been agreed across the industry which clarifies how IVA proposals
should deal with their property. This provides:
The client obtains a professional valuation of their property after month 54 of the
arrangement for the purposes of a re-mortgage.
They obtain two mortgage quotations (this will go back to the broker who has
introduced the case)
The max they are obliged to remortgage to is 85% LTV less secured sums but subject
to affordability criteria.
If equity is less than £5,000 - property is excluded from the IVA
To protect the interests of creditors the Supervisor will register a restriction against the
property at HM Land Registry.
In terms of affordability the increase in the client's mortgage payment (for the new
mortgage) must not exceed 50% of the clients' monthly payment into the IVA.
The proposal specifically states that they client does not have to sell their property.
If a remortgage is not possible, the alternatives creditors will consider are:
Third party sum equivalent to the value of their share of the equity.
A maximum of twelve monthly contributions beyond the 60 month term at the same
level as paid in the fifth year of the Arrangement.
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