Do you need help with bankruptcy or an IVA?
If you are you are in bankruptcy or in an IVA and looking to raise funds to pay off your creditors?
We have lenders who will advance funding on a second charge secured loan basis against a persons property. Up to 75% loan to value including first charge mortgage to pay creditors. All loans subject to affordability.
The rates are higher than the normal mortgage rate, due to the higher risk factor, but it means that you can look at remortgaging your house at a later date onto a better mortgage rate, and it also means you can relax knowing you no longer have creditors breathing down your neck for their money.
How we can help
We receive requests from Insolvency Practitioner to help some of their clients who are being pressured into raising capital to pay off creditors - this we are able to do by using the second charge secured loan route.
Quite simply the secured loan is place behind the first charge mortgage and capital raised to pay off creditors – it works much the same way as their first mortgage. The maximum loan to value , including the mortgage is 75%, and if there is sufficient headroom we can raise the funds. The bankruptcy or IVA is paid off and they can then, at some point in the future, look at remortgaging the whole amount with a high street lender.
The rates are higher than usual but it removes the threat of the creditors. The loan can be paid off at any time, without penalty.
What are the pitfalls of an IVA?
An IVA (Individual Voluntary Arrangement) is a legal agreement between you and those you owe money (your creditors). You agree to pay off a percentage of your debt over a given period of time, by means of affordable repayments (normally 60 months).
An IVA can be expensive and comes with many risks:
- your savings and personal pension payments will usually be used to pay your creditors
- if you own a home, you may have to re-mortgage it
- it may affect your job, for example if you're an accountant or a solicitor
- if your circumstances change, you could struggle to keep up your IVA payments. If your creditors won't accept less, the IVA will fail and you could be made bankrupt.
These pitfalls may present serious problems for your future.
Who can enter into an IVA?
The main criteria that your creditors will use to evaluate your IVA proposal are:
- The return to your creditors in an IVA beats the return in Bankruptcy.
- The amount of money you're pledging to return to your creditors over the life of the IVA must achieve the minimum creditor dividend (this is amount of money the creditor receives as a percentage of the total amount of debt that is owed). As a general rule, this is around 15%, although it can vary depending on factors such as the size of debt, the return in Bankruptcy and how quickly the creditors will see their money.
- You must be a resident of England, Wales or Northern Ireland.