I thought there was light at the end of the tunnel

[josu]

Hi,im new to the forum but have just completed the third year of my iva [:D]and i am really hoping i only have another two years to go. This extention of 12 months has always really confused me and there are peeple on here saying they have a six year iva with a possible extention period of twelve months which would make it seven years when i always thought ivas were five years????????????? Could someone help clear this up for me, my paperwork also says that if the equity in my house is less than £5000 then the iva will end but if there is more than £5000 but it cannot be released it will be extended by 12 months????????

[Daveyboi]

Your IVA lasts for 5 years unless you have any payment breaks and have to tack it onto the end, if in year 4 you get a valuation and the equity is below £5000 your IVA remains at 5 years and concludes. If there is more than £5000 at the valuation but due to current lending you are unable to remortgage then you pay an additional 12 months instead making it 6 years in total but the equity in the property stays which is good for you post IVA

[Tina Shortland]

Hi Josu welcome to the forum.

IVA proposals are based on 5 years however their is an equity release clause that stipulates if there is equity to be relased but can't (usually be remortgage) then the IVA can be extended by up to 12 months to make up for it. Also aside from this some proposals have a requirement to last for 6 years to give a higher dividend(Northern Rock used to want this as a norm for most proposals). Sometimes if someone has had to have a payment break or the change in payments has reduced the dividend the term is extended to make up for it. Hope that clears it up a bit more - if still in doubt speak to your own IP as its sometimes better explaining things verbally!

Well done anyway getting so far with your IVa hope you stay around on here to let us know how its going.

regards,

[kallis3]

IVA's are not necessarily just for five years these days.

Mine is the same as yours - if you cannot remortgage (which you unlikely to be able to do) then your IVA will continue on for 12 months in lieu of that equity.

Do you have any equity in the house?

Welcome to the forum by the way.

[Daveyboi]

Are Northern Rock still insisting on 6 years? Seems unfair they do this to people 5 years is long enough for a standard IVA

[Tina Shortland]

No they are not as a norm but it is always down to each individual case and want the creditors deem fair. If 5 years is only paying back 15% of the debt owed it would be fair for creditors to say 5 years is not that long. I know its a hard slog but if you were in the creditos shoes you might want the person who owes you to help a bit more towards minimising the debt being written off.

Case by case basis and how the creditors vote on the day.

Regards,

[Daveyboi]

They seemed to be wanting it initially with no care of the return in the pound but using it as a standard variation.

[kallis3]

I agree with Tina - it is all individual and NR vote differently for each one.

[mole]

That does seem unfair of us who NR did force a 6 year IVA on (all other creditors happy with 5 but they had the controlling vote).

If they are now accepting 5 years as the norm.

Its not as though many of us have a low divident. I think mine over 5 years would be over 70p/£.

Can I ask for a variation

[Daveyboi]

I can't see them accepting a variation unless you got made redundant or ill and couldn't work it's all been agreed for 6 years now unfortunately. Working on Tina's logic of a small return 70p in the pound return is very high over 5 years and I think in that situation 6 years is unfair.

[kallis3]

I can't see a variation being accepted either. I'm afraid yours will be a six year one.

As Tina says, it is not the norm but they can still insist on it if they want to.