Hi, I have got an iva and im a little confused about the equity release in year four...I have read on here that you have to try to remortage to 85% of the value of the property minus outstanding mortgage and this will be the amount that i will pay into my IVA. I can only see in my terms that i have to re-mortgage and it says i should pay the creditors in full.. im worried that i could end up paying more than i owed in the first place ..can anybody put my mind at ease ? i did phone my iva compnay but they didn't give me clear guidelines at all...
That proposal clause that you refer to seems a little odd, but you cannot end up paying over more than you actually started out owing plus the IPs costs to run the arrangement.
Could you post the exact wording of your equity release clause onto the forum, so that I or one of the other experts could comment further. It would also be helpful if you would tell us how much your creditors are and how much you are paying back each month.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Usually you have a figure which you have to try and get a remortgage for, in our case it's £28,000 at the moment (£14,000 each).
It would be interesting to read exactly what the clause says.
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Good Evening and sorry for the delay in repling.. Firstly thankyou for your replies...On my proposal summary in the offer of payment part it shows my voluntary contributions as £28,740 and my equity in property as £11,196... im hoping that this means this is all i need to raise in year four for the equity relise ?..Also in the proposal its states if i can get a remortage "I will Authorise the lender to pay my supervisors the lower of the amount required to effect full repayment to creditors bound by the arrangement(less statutory interest) or 100% of any net proceeds due to me from a successful mortgage application"...Kind regards...my total debt was £54,000 and my monthly payment is £515....
Again - oddly worded and rather ambiguious, but it suggests to me that you are required to remortgage and then pay in all of the mortgage monies available to you.
How long have you been in your IVA to date, and how much is the property worth less the value of your current mortgage?
I have only been in my IVA since December 08 ..My property is worth about £109000 and my outstanding mortgage is £92,000..
Melanie is Giles wrote:
Again - oddly worded and rather ambiguious, but it suggests to me that you are required to remortgage and then pay in all of the mortgage monies available to you.
How long have you been in your IVA to date, and how much is the property worth less the value of your current mortgage?
OK - assume that those figures stay the same for the next four years, you may well only be able to raise 85% loan to value of your property - ie £92,650, so it is unlikely that you will be introducing anything further into the IVA.
Best to chat this through with your own IP to be sure that you understand this important provision - which I am quite suprised you do not seem to be too familiar with. Did you have a meeting with your IP at which this was explained?
Thankyou for your swift reply..No i didn't have a meeting with my IP everything was explained over the phone and have always been a little foggy around the four year equity realease part.
I have however found my modifications proposed at the meeting of creditors contract and im assuming this is the binding wording for all parties and would replace any proposel and standard conditions that i als0 have copies of ? If this is the case then the 54 month equity release part is worded a lot clearer (laymans terms) so i can understand it...
MelanieGiles wrote:
OK - assume that those figures stay the same for the next four years, you may well only be able to raise 85% loan to value of your property - ie £92,650, so it is unlikely that you will be introducing anything further into the IVA.
Best to chat this through with your own IP to be sure that you understand this important provision - which I am quite suprised you do not seem to be too familiar with. Did you have a meeting with your IP at which this was explained?
I definately think that an open and frank discussion with your IP is essential for you to fully understand the implications of how the equity in your property is to be treated.
Looks to me as a very ambiguous clause. Get your IP to write to you to explain this modification.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
