thinking of a re-mortgage to end IVA early

[Sith]

Hi, I'm 8 months into an IVA. Payments are £215 pcm with £9k lump sum in final year the proposed div is 0.40p/£

Fees are £2700+Vat for nominees & £4450+Vat (Pro rata) for Supervisors fees

Total original debt was £33k.

I thinking of a re-mortgage to end IVA early and would be interested in your thoughts on amount and timing of offer etc.

Thanks,

[hara]

ii may be early in the iva to propose that. and creditors may not be happy to end it soon after setting up an iva.

also was not the equity in the house taken in to consideration while considering a proposal with remortagage in 4th year to release equity for the benifit of creditors?

hara.

[jpj]

I just looked into it after 14 months into an IVA and was told i would be expected to wait till year 3 ...the thing is house prices are rising so much at present that creditors know that in a few years time there is a great possibility your house will be worth lots more so they will get more money back!

[MelanieGiles]

Hi stemcall and welcome to the forum

I also feel that it is too early for you to make this offer attractive to creditors. Your creditors have agreed to a relatively long payment plan, coupled with the gamble of equity at the end in a market where prices are still rising. I would certainly wait another year before considering this - and do check the terms of your proposal, as some creditors submit modifications preventing variations during the first year.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[lynchmeistress]

Hi
I have been thinking of doing the same, we are almost at the end of our 2nd year and there is a possibility that my other half will be retired on ill health, if we go all the way including the equity release in year 4 we have £51,000 left to pay under the terms of our proposal (59p/£). I rang my supervisor and asked if I offered £35,000 in F & F would it be considered - he nearly laughed me off the phone! He said he wouldn't approach my creditors for any less than the sum outstanding, which is the £51,000. He said creditors are thinking people are entering into IVA's as a way of writing off debt, getting an agreement and then offering a reduced amount only a short way in! Very synical in my opinion as it's a last ditch solution to the vast majority. Anyway, the bottom line is only a realistic offer will be considered.

[hara]

I am surprised that ou IP almost laughed.

People do not barrow and seek iva for fun.Things happen,life is like that.

Seeking an IVA itself involes producing vast amount of documents and supporting evidence and throughing yourself at the mercy of creditors with uncertainity and constraints applied for the next few years.

Hara.

[lynchmeistress]

I agree, we were at rock bottom when we got to the IVA point and then there's all the worry of whether your proposal is accepted - probably one of the most stressfull things I've been through. He knew he'd upset me by not taking my offer seriously especially as there is a real possibilty of early retirement for my other half and then the creditors will have to think again about our current level of contributions, I thought I'd made a genuine and realistic offer.But he still wouldn't back down.
But I'm not finished yet!

[hara]

Why does not he make a proposal and ask for creditors meeting.

hara

[lynchmeistress]

I'm wondering the same but I need to collect myself and write down a few questions before I ring him again on Monday, I'm wondering whether it has anything to do with Northern Rock and HSBC being my largest creditors and he knows they won't go for anything less than the full amount.

[MelanieGiles]

I am sure that the IP in question here did not mean to make a joke of your situation, but he is correct in saying that a lot of creditors feel that IVAs are being used as a quick fix with debtors looking for an early exit route - and as a result of this view they are turning down variations. As IPs we can only report on what is happening in the marketplace generally - and do remember it is not us who makes the rules.

If there is a change of circumstances, which is going to affect the ongoing viability of the IVA, your IP should certainly be putting a variation forward to allow creditors the opportunity to relook at your case and take a commercial decision as to what is the best way forward for them. This does not necessarily mean that you have to raise the full value of your outstanding contributions - but as I have no detailed knowledge of your case it is difficult to advise further.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Adam Davies]

Hi
If you do not have the fourth year equity release clause then a full and final settlement returning the original dividend or a few pence more is still a good offer to creditors.However if you have this fourth year equity clause then I fear that only an offer of the full original debt will be acceptable unless there are mitigating circumstances.
regards


Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[hara]

Dear MR Davie,
Can you give a few examples of mitigateing circumstances please.
Hara.

[Adam Davies]

Hi
Yes,loss of job,reduced income,ill health etc etc
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp