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Important announcement regarding Varden Nuttall

Varden Nuttall Limited (‘the Company’) was placed into Administration on 24 March 2016.

The Joint Administrators, Paul Boyle of Harrisons Business Recovery and Insolvency Limited and Ben Woolrych & Phil Pierce of FRP Advisory LLP, act as agents of the Company and without personal liability. Paul Boyle, Ben Woolrych and Phil Pierce are licensed by the Institute of Chartered Accountants of England and Wales, all Joint Administrators are bound by the Insolvency Code of Ethics.

How will An IVA Affect My House?

If you take out an IVA (Individual Voluntary Arrangement), you need to consider what will happen if you are a homeowner. If you are a homeowner then your property could be at risk. If however you are currently renting your home then your property will not be affected or considered in any way if you do choose to take out an IVA (Individual Voluntary Arrangement).

An IVA will legally protect your home from action from your creditors because once you IVA solution has been set up and is underway, the creditors cannot use a charging order to secure debts against your house. The IVA solution also means that the creditors cannot campaign for you to go bankrupt too, as bankruptcy would mean that you would be forced to sell your property.

More often than not, when a person enters into an individual voluntary arrangement, they may be required to re-mortgage their property in order to release equity from their home. You will then use the equity that is released from the property to increase the amount money that gets paid back to the creditors.

Generally the creditors will want you to release as much equity as possible from your property, the amount that you raise will be dependent upon the re-mortgage deal that you will be eligible for. On average most people will not be eligible to release more than 80-85% of the equity within your property on a re-mortgage.

Upon occasion, some people may not be able to re-mortgage due to their credit history and their current financial situation. This can often be the case due to the current economic climate, and the banks being incredibly resistant to lending money. When this situation occurs, there is a clause in the IVA that states that you will increase the payment term by 12 months in order to compensate for the fact that you cannot release equity from your home.

If your circumstances change whilst you are in the IVA, and it becomes possible to release equity by re-mortgaging the property, you may be eligible to settle your IVA earlier than originally planned.

An IVA can be deemed as a very sensible option for a homeowner, as the risks are very different to a person that takes out a debt management plan or filing for bankruptcy. When a person files for bankruptcy, in the majority of cases, the person is forced to sell their property in order to pay off the creditors. When a person enters into a DMP (Debt Management Plan) there is no legal protection on the property, and creditors are still able to issue charging orders against the property.

Releasing equity from your property will mean that you pay a larger amount back to your creditors, however you will still be able to write off a considerable amount of unsecured debt. Most IVAs last an average of five or six years, meaning that you can write off the debt that you have incorporated in the IVA within the period of time that the IVA runs for.

If you are having problems with debts and are considering an IVA, you can get more information on IVAs and debt advice from Varden Nuttall. Visit the website today