DEBT ADVICE NEEDED - equity release

[quinnyluca]

Hi all - I am new to the site (well as far as contributing goes). I wondered if there was anyone who could give me some advice on my debt problems please. I have quite bad debt on credit cards and a loan and have taken advice from citizens advice and they advised me to enter into an IVA and not file for bankruptcy because I have equity in my house. I don't really want to move as my house is close to my daughters school so I think an IVA is probably the best solution. I had thought about equity release on my house - does anyone have any comments??

 

Thanks in advance!!

[rory32]

It is generally a very bad idea to turn unsecured debt into a secured one.

 

When were these credit cards and loan taken out and who are they with?

 

How much debt are we talking about roughly?

 

Are there any charges on the accounts e.g. late payment fees, overlimit fees?

 

How much disposable income do you have per month? IVA's are not suitable for the majority of people.

[shopgirlnyc]

Hi

 

Thanks very much for taking the time to reply.

 

My credit cards are balance transfers cards that have approximately £20k between them and are with Egg/Virgin and Marks and Spencer. All introductory rates have ended and I really don't want to transfer balances again because I'm just not reducing the balances - only the minimum payments. I have defaulted on my cards a couple of times until I set up standing orders. I also have a loan which is now approx £4k give or take.

I can't believe how much it all adds up to.

 

I pay all my bills and mortgage out of my salary but it isn't clearing my debts.

 

I have approximately £300 a month left after I pay everything which I use for food shopping and essentials. I don't qualify for any benefits.

 

I've read every book on debt management and reducing your outgoings but I really need professional help now.

 

I really want to get this sorted asap for mine and my daughters sake.

 

Maybe an IVA isn't my best option and I heard most banks are not offering equity release for obvious reasons...

[Lula]

You probably are not old enough for ER anyway and it was never really a good product, it is going to come and bite the providers in the backside just like Endowments did.

 

ok, you need to list all debts, amounts, any areas and, most importantly, when the card or loan was taken out.

[quinnyluca]

I am going to list them all tomorrow and see what people think. By Equity release I meant borrowing on my mortgage because I have equity in my house.

Till tomorrow then....

[rory32]

By Equity release I meant borrowing on my mortgage because I have equity in my house.

I realise that's what you meant. It's still a very bad idea though.

[samjayne]

I wanted to do this also I mean add to our v low mortgage cw the equity in our house but due to bloody barclays puttign a default on my file for a loan in dispute wuth fin ombudsman re a mis sold timeshare my mortgage co who ahve previously let us add 3 times to our mortgage have declined us for another top up, Im furious as I have always paid all my debts before now, borrowing on our house is so so cheap and would solve all our probs and we'd still have a v cheap mortgage we could afford and no debts.... now Im worried sick how we'll clear our debts I dont know... I did wonder if there are any mortgage lenders who we could move to and try elsewhere to remortgage but with the default I guess no one will and we're on a v cheap deal with our mortage..

[loobyloo85]

Hi there

 

My friend is in an IVA with Payplan Partnership, and it is helping her a lot with her debt problems. I do not know the ins and outs of the IVA but have heard nothing but positive reviews about her IVA. x

[rory32]

If you have mortgaged property I would strongly advise you to steer clear of an IVA.

more info here:

 

National Debtline England & Wales | Debt Advice | Factsheet 26 Individual Voluntary Arrangements

What about my home?

 

 

• If you are a home owner, your IP will normally want to include a special section within your IVA proposal called an 'equity clause'. This means that during the IVA (normally in year 4) you would be expected to apply for a secured loan or re-mortgage to pay back some of the debts. If you cannot do this, your IP may want you to sell your home instead.
  
• However if your IVA follows the IVA protocol, there is some protection. The protocol says that if you are unable to get a re-mortgage or secured loan, you should keep paying instalments under the IVA for an extra 12 months rather than selling your home.
  
• If you are able to re-mortgage or get a secured loan then the repayments should be affordable, and you should be left with at least 15% of the equity in your property.
  
• If you are unable to maintain the payments on your IVA there is a risk that you may be made bankrupt, which could result in you losing your home.
  

WARNING

You need to be careful when looking at taking out a new mortgage or secured loan. It may be difficult to find a loan from a reputable lender at a good rate of interest because your credit rating may not be good enough.

You must discuss this with your IP and get advice to make sure you can afford the new payments or you could be putting your house at risk.

[389shell]

Ooooh IVA's, bad bad IVA's!

 

You have come to the best place in the land for advise and support, welcome to you both.