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If you are a home owner in financial difficulty then it is likely that your home is at risk.
In Bankruptcy your beneficial interest in the property (your share of the equity) would be realised by the Trustee. If you (or your spouse) cannot buy back your interest then the Trustee may seek to sell the property on the open market for the benefit of creditors.
An IVA will also take into consideration your equity in the property but there is an agreed protocol that guarantees that you will not be forced to sell the property if you can maintain the mortgage repayments.
You will be required to try to release your interest in the property by remortgaging or refinancing in the final year of the IVA but the agreed protocol provides protection for you because:
- The maximum amount you have to introduce is 85% of your share of the equity in the property
- The additional cost of the remortgage cannot exceed 50% of any monthly payment you make into the IVA
- You do not have to extend the mortgage term
- If you cannot remortgage or refinance you can extend the term of the IVA for a further 12 months