Settlement

[alan71]

I have been paying into an IVA for 18 months now, and after looking at the positive responses to some of the questions posted, I feel confident that you can answer my queries.

What I would like to know is although I have a settlement clause in year 4 of the IVA, can I settle now - even after 18 months - by releasing equity in the property? If so how do I go about remortgaging, as many high street lenders won't touch me because of the IVA? Does the settlement figure have to match the amount repayable over the 5 year period?

Many Thanks
Alan

[iva experts]

Welcome to the Forum Alan,

Firstly, I would have a close look at your term & conditions of your IVA agreement as more regularly a clause is being introduced stating that no changes can be made in the first 24 months.

Secondly, speak to your I.P they will be able to discuss if this is possible. You are able to get a mortgage with lenders in the sub-prime market through specialist brokers, however you would need the permission of your I.P to go through with this.

Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

[MelanieGiles]

If you are not struggling with your payments, or there is no other reason for wanting to settle early rather than a desire to be released from the IVA early, then I cannot see creditors agreeing to this. But do discuss this with your own IP.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[alan71]

Melanie,

There is a reason for me asking if I can pay early. My IVA started in sept 06, my then partner left me in aug 07. We have three children which we have equal custody over. My fixed rate is coming to and end in feb 08 and I feel the mortgage company would be reluctant to remortgage me because of the IVA, I know this becuase I have tried to purchase my ex-parnters share of the property, and failed.

My IVA was for £62k of which I have to return £0.45 in the pound. My desire to pay off early was so I could move on to new pastures without the IVA creating any issues. I assume that I would be able to remortgage up to my share of the equity.

As other people that have asked this question of paying early, and none of them stated they were struggling with payments, I thought I could to the same.

Do you have a ball park figure of how much I would pay, or should I speak with my IP?

[MelanieGiles]

The key here will be to find out whether you could re-mortgage and at what cost. Also how much money do you think you would be able to raise? Even if your existing mortgage company will not help, there are other companies who will provide mortgages to people in IVAs.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[alan71]

Another problem i have is that I am on a 50:50 shared ownership scheme. Having said that, the house value is £190k, half going to the housing association leaving me with £95k. The balance on the mortgage is £63k, so that would leave £32k equity. However I believe that I could use only half of this figure again as my ex-partner would want her half, so realistically that only leaves me £16k. Is this enough? What other options would I have?

[MelanieGiles]

I think that you will struggle tremendously to re-mortgage a shared ownership property in today's financial climate.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[alan71]

If I were able to remortgage with a company that specializes in dealing with people with IVA's, would £16K be enough of an offer to my creditors?

[ianmillington]

I think the fact that you are in a shared ownership scheme will be a bigger obstacle than your IVA. Some housing associations will not consent to remortgages of such properties and without this you will struggle to find any mortgage lender who will let you have the money.

Check your shared ownership docs to see whether you are allowed to remortgage at all.

Ian

[MelanieGiles]

The only way you could re-mortgage under shared ownership, is if you were to be able to borrow enought to buy the co-owner's interest as well - and you would have to check if this was possible under your own particular scheme. This would mean much higher mortgage repayments, but it could be worth looking into.

[Adam Davies]

Hi
I think MikeB,who is a mortgage broker,has recently stated that there are no current mortgage products for shared equity remortgaging.
If this remains the case then you will not be required to remortgage in year 4.
Regards
Regards

[alan71]

I have already contacted the housing association and they have given me consent to borrow extra money to buy out my co-owner. Its whether I would be able to borrow enough to pay off the IVA as well. My current spend on the mortgage and the IVA is £871, I would hope i could get a £100k mortgage for less than that. I guess I will have to do some number cruching again!! Could I sell the home to pay these debts off?

[Adam Davies]

Hi
You could sell he home and release the equity into your IVA but you willneed to convince creditors that this is your bst offer as they may want ongoing monthly payments on top of this until the end of your five year IVA
Regards

[alan71]

Well I guess I won't be selling the house. To re-cap my IVA is £35k including fees, of which i have paid to date £9k (about 17 payments). If family were able to generate enough cash, how much would be a reasonable offer to my creditors, because I would really like to pay this off early.

[MelanieGiles]

You would need to get your IP to provide you with a settlement figure, which ought to be based upon the original dividend you offered - with some additional consideration towards the equity release, perhaps based upon a current valuation of your property.