www.iva.co.uk

My IP Supervisor is threatening to issue a Notice of Breach, 2 years into my IVA.
This is because I have not agreed to a modification on my IVA that allows the IP to put a charge on my property with the view to re-mortgaging at the end of year 4 to release any possible equity.
I have kept up my agreed monthly payments.
Furthermore, I have signed the property over to my husband because my poor credit rating was causing him problems.
What are the legal implications of my situation?

Hiya April, sorry I can't answer your question, I'm sure an expert will be along soon though,
xx

Was this condition not inserted when you started your IVA?

It is usual as a homeowner that the IP will put a restiction charge on your proprty (stopping you from selling it) and also expect that an equity release is made if possible within the IVA (often in the 4th year).

There was another post like this about the same subject when the debtor in an IVA said
he wasn't informed of the 4th year release clause on the property. The man was fired up with his posting been read over 300 times; he was incensed as he had 25K of EQ and he is coming near to the end of that IVA.....by remortgaging and loosing the Eq he said smacks of continuing for the IVA for another decade or more and he could be eventually be paying off as much as he had owned.No write offs

He alleged IVA misselling but the experts didn't quite concur with him.I am afraid unless your property have zero EQ, you will have to release a portion of the EQ as it is commonly stipulated.

One of the clauses in my IVA clearly states my property will be excluded and not form any part of the IVA

The modification was rushed through at the end. I guess it’s the concession the Supervisor had to make to the creditors to get the IVA approved.
The Supervisor was supposed to send me the relevant form for the charge but that never happened.
2 years down the line, they have realised their error and the potential implications hence the threat of a breach.

There was definitely an element of misselling in my case but I guess once you sign up for the IVA, they couldn't care less.

My monthly contributions over the life of the IVA would amount to more than 50% of my total debts. When I was 'sold' the IVA, I was told that I would not have to repay more than 50% of the total debt and even in some cases, the repayment could be as little as 25%! So where is the benefit here?

Bottom line is, I do not intend to sign off more money through equity release for an IP Supervisor who will be paying himself £2500 for doing very little.

If the IVA is terminated, what are my options?

The idea of an IVA is not to 'escape' paying one's debts but moreso to pay back as much as one possibly can under a 'controlled' method ... i.e the IVA gives one protection under the law from harassment by creditors.

When my debt was mounting I was always reassured by the fact that I knew I hade some equity in my house which would be able to offer as recompense.

I am not sure, but I think the option for you if you were to cease your IVA would likely be bankruptcy, which would mean that your house would likely be sold by the OR to release the equity as some return to your creditors.

Debbie

If your IVA is terminated, then you could either petition for your own bankruptcy or enter into an ongoing payment arrangement with your creditors.

Can you let us know whether you are required to raise any equity from the property as part of the IVA, because if the property was excluded then there is no need for the caution to be registered. If you did undertake to raise equity by creditors mofification, I wonder why you signed over your interest in the property to your partner?

I guess your options are DMP or BR but if you have signed over the house less than five years ago the OR would view this as disposing of an asset.

OOpps Melanie your post wasnt there when I started. Sorry.

Hi April
The equity release is part of your IVA
If you fail to raise the required equity your IVA will fail and most of the money that you have paid in will go in IP fees.
Bite the bullet and agree to the clause
Regards

Well said Soulgrowth - I think you are so right -

The idea of an IVA is indeed to repay as much as reasonably possible to our Creditors from whom we have knowingly borrowed money. I just cant comprehend the rationale behind the thinking that if you are not "writing off" a minimum percentage then you have been "mis-sold". Surely everyone should go into an IVA looking to pay back the max - not to pay back the minimum???

If I had the chance - and the resources - I would willingly repay 100% of my debts without question. I am in Year 2 of my IVA and there is no denying that the going is b***** tough and the end is a long way off. But I am in it for the duration - I hope - and am not going to look for "mis-selling" in something I knowingly and willingly signed up for as a brilliant solution to my debt problems.