One thing I have never seen notes on here about is :-
Can someone who is considering an IVA apply for a 2nd Mortgage based on the equity in there home to provide for a full and final IVA settlement Offer. This is obviously where the DI is poor but could be absorbed over a period longer than that under an IVA to repay a 2nd mortgage.Obvioulsy the person would need substantial equity for this to be practical
If there was substantial equity in the property creditors may seek the sale if debts could be cleared in full rather than accept a secured loan offering a much lower return. However, if the debts related to only one party and the property was jointly owned it may be acceptable if the insolvent partner was raising most [if not all] of their equitable interest.
Michael what would be the case where the amount of equity is less than the debt owed.
If a person were able to raise the equivalent of the divvy % for example.
It would depend on the creditors and the modifications. If it was the only way of raising equity and the maximum available other than through a sale creditors would likely accept it provided there was documentary evidence on file. The other thing creditors may take into account is the amount if the monthly payments to secured creditors. If these are excessive and the client could sell and rent a suitable property for less creditors may ask for a sale and ongoing contributions. Not all creditors take this view and your IP should be able to tell you if your major creditors have this attitude.
Thanks Michael. I had never seen any posts on this topic.It usually talks about monies from a 3rd party. I suppose this would almost be like debt concilliation with an IVA tool. The advantage really being to the creditors is that they would get the funds in a shorter space of time and the IP fee would be slightly less.
It used to be easier and quite common to do early settlements and one off IVAs from equity release. It is not so easy now given the credit crunch as the rates are so much higher and the loans to value drastically reduced.
