Equity release.The following is an abstract from my IVA agreement papers.If the value of my house has gone down, and the 85% equity leaves less than 5k, does that mean that I do not have to re-mortgage, or indeed make any further payments into my IVA with regards to my property? That's the way I read it..
In month 54 of my arrangement, a valuation will be carried out on the property.
If that valuation shows that 85% of my interest in the value of the property (after deducting the amount of the
loans referred to above) is less than £5,000 then I need contribute no more to the arrangement in respect of the
property.
If that valuation shows that 85% of my interest in the value of the property (after deducting the amount of the
loans referred to above) is £5,000 or more, I will seek to re-mortgage my share of the property subject to the
following conditions:
· The re-mortgage will be at a maximum of 85% of the value of the property.
· The costs of the re-mortgage will be deducted from the mortgage proceeds.
· The increased amount that I have to pay because of the re-mortgage will be deducted from the monthly
contribution in the arrangement.
· The increased amount that I have to pay because of the re-mortgage will not exceed 50% of the monthly
contribution in the arrangement.
· The amount of the total equity release does not exceed 100% of the remaining outstanding debt (and
statutory interest does not apply).
· If the increased amount that I have to pay because of the re-mortgage means that dividends to creditors
fall below £50 per month after fees,monthly contributions are stopped, and the IVA is concluded.
My understanding is that you will not have to re-mortgage if the equity is less than 5k, and the property will no longer form part of your arrangemnt. Are there any other clauses, in respect of reaching minimum dividend that may force you to extend the arrangement for a further 12 months?
I think you are reading that right menorca - it's the way I would read it. We do have a payplan rep that you could email your query to for peace of mind.
Hi Menorca
To echo what has already been said, the best thing to do is speak to your IP first and foremost. Each case is different and whilst the principles are normally the same, the way it affects you is something best discussed with your supervisor.
Yes, do get in touch with Payplan. My reading of this is slightly different and is influenced by this sentence:
'I need contribute no more to the arrangement in respect of the
property'.
The words 'in respect of the property' seem to leave open the possibility that you might be asked to make additional cotributions, only NOT 'in respect of the property' - i.e. additional monthly contributions or something.
Check it out with your IP. As has been said, all IVAs are different / individual, and a lot of people are discovering this right now in respect of the Equity clause.
Last monthly payment made 3 June 2013 after 6 long years. CC issued 21 August 2013, but, er, lost in the post. Finally got it 17 September.
Hi menorca, if your equity is less than £5,000 and there are no other clauses in your proposals to state otherwise, you would not be required to make any additional payments into your IVA. I would always double check your proposals and contact me and I can check for you.
Regards
Nick
Hi, my name is Nick Payne and I am an Insolvency Practitioner with Payplan.
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