My IVA began in June 2007 and I have the 4th year equity clause in my Chairman’s Report.
According to my calculation, the 4th year starts from June 2010 as June 2007 to June 2008 is the first year, June 2008 to June 2009 is the second year, June 2009 to June 2010 is the third year and June 2010 to June 2011 is the 4th year. Today I have e-mailed my IP company, PayPlan, (all my contact with PayPlan is by e-mail so that I have a record of what I’ve asked and been told), to enquire about the equity release but they have told me that the 4th year starts from June 2011. Is that not the 5th year?
Also, my proposal states: “Anticipated asset realisation date March 2012”.
PayPlan have said that I should start looking to remortgage about 6 months prior to March 2012, i.e. September 2011 to give me enough time to arrange the remortgage. I’m happy with this, but I don’t want to do anything to jeopardise my IVA by not following the correct procedure. I appreciate that I might not be able to remortgage anyway and may have to pay an extra 12 payments, (my Chairman’s Report states this), but I want peace of mind and PayPlan’s answers seem a bit woolly to me as they don’t seem to be picking up the apparent contradiction between my Proposal and Chairman’s report.
At least they respond to my e-mails quickly!
Would I be right in thinking that I only get the valuation and redemption figures in the 4th year and try to remortgage that amount by March 2012?
I will be going back to PayPlan later but would appreciate anyone’s thoughts.
If you notice something that you think is genuinely wrong, it might be best to put it in writing to your IP directly, rather than try to discuss things with an employee within the Practice.
If the modification in the Chairman's Report was specific then you might wish to point this out. However, there were several of these modifications a few years ago that were not particularly well-worded, and your IP may be entitled to keep to your proposed schedule. Always best to check!
However, I think that Payplan will be sending someone out to value the house as they did before we started. That way we will know when we're due to try and remortgage (not that I expect to be able to!)
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Thanks for your replies. I'll be contacting PayPlan again tomorrow to get this cleared up. I know that protocol IVA’s require the equity to be paid in month 54 but my IVA is pre protocol. It may all be academic anyway if I can’t remortgage, but it’s been on my mind a lot recently, especially as I’m in the fourth year despite what PayPlan tell me.
I think ours stipulates month 48, but not sure about that. I'll have to check the paperwork.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
The fourth year does commence in June 2010 - and if the proposal is unspecific as to when this needs to happen during the fourth year, there is no reason why you should not start the ball rolling with the revaluation process now. After all property prices are slowly rising, so your house may be worth more at the end of the fourth year than at the beginning.
I have equity in my property and as I’m on a straight repayment mortgage the equity will increase as time goes on, subject to the value of the house remaining the same or even increasing. Therefore, from my perspective, it makes sense to me to get the valuation and remortgage applications done now.
What I can’t get PayPlan to confirm is that is the amount I remortgage based on the valuation now but not released until March 2012. My Chairman’s Report states” “An open market valuation of the property must be provided to the supervisor in the 4th year of the Arrangement together with a mortgage redemption figure. The debtor must remortgage to realise the maximum amount of his share of the equity in the property from a re-mortgage, up to a maximum of 85% loan to value based on affordability.
The debtor must forward details of the re-mortgage offer to the supervisor and written
confirmation from the mortgage broker of the best offer available.
Should the debtor be unable to realise his share of the equity in the property by way of a remortgage, 12 additional monthly contributions shall be made, providing that the supervisor has first written to creditors to ensure that there are no objections.”
But this doesn’t state when I should remortgage, only that I must get the valuation and redemption figures in the 4th year.
I’ll be contacting PayPlan again to get this cleared up, but I may have to contact my IP for a satisfactory explanation. From reading other people’s posts who are with PayPlan that sounds impossible, but I will e-mail him directly if necessary. Considering they are responsible for my future, I don’t have much confidence with someone who can’t differentiate between 4th and 5th years.
If it doesn't specify when - then you can choose when to do it. Simple! And as you say the sooner the better - but I predict you will struggle to get anyone to lend you any more money against your property sadly.
I will start to get the redemption figures, (I have a secured loan as well as a mortgage), and a valuation. As you say, it’s unlikely that I’ll get anyone to lend the money but I wonder if I’m unsuccessful PayPlan will ask me to try again, say in another 6 to 9 months? I will ask them this.
Do you only ask your clients to attempt a remortgage once?
I've contacted PayPlan and they've agreed that I'm in the 4th year and I can start the remortgage process now if I wish or leave it until later, even after the 4th year, (which is contrary to the Chairman's Report). If I’m not successful they have asked for 3 rejections, and then they will go to my creditors to see what they want to do, which would probably be 12 months additional payments. They said that I won’t be required to attempt the remortgage process more than once.
I’ll have a good think about things now – it’s the not knowing that’s really bugging me!
PayPlan also told me that I would have to pay for the house valuation out of my contingency fund if I couldn’t get a free of charge valuation. They said that I should say that I am considering selling my house so that I could get a free evaluation. I told them that I wasn't prepared to lie, so I’ll see how it goes. Also, I see that there are fees to apply for a remortgage, so there’s more expense!
If you cannot get a free valuation, then the costs of this valuation should be paid as an expense of the arrangement and not out of your contingency fund. This is a stipulation of creditors, and they should fund all of the costs.
