We are close to entering the final year of our IVA

[Chris.wnb]

We are close to entering the final year of our IVA. Voluntary monthly payments have been made, however under the terms of our IVA we have to make a final payment of £70k from the sale of our house and any equity gained. We are in negative equity and therefore unable to make the final payment.
The terms do allow for an extension of 6 months followed by a further 3 months if our creditors agree.

As we will be in default what will happen?
Are our creditors then able to bankrupt us?
Should we advise our IVA company now or wait until when they request a valuation of our house.?

[Adam Davies]

Hi
If you have no equity then you are not really in default. your creditors will almost certainly request an extension of your IVA.
Your creditors will not bankrupt you, in my opinion, and I would open up communication with your IP now
Good luk
Regards

[Chris.wnb]

many thanks Andy. Anorther nightmare is that one of our mortgages is due to be repaid £40,000 (interest only) next May. Due to business collapse and huge reduction in our earnings, have not been able to save for this. WE have 2 other repayment mortgages due to expire in 2014. We're afraid to go to the bank in case they start to re-possess the house, although we've never missed a mortgage payment and the other 2 are up to date. Not sure what the bank will suggest as they must know we're in an IVA. HELP!

[Adam Davies]

Hi
They may agree to extend the interest only period until the house is in positive equity. They wll not want to repossess if there is negative equity.
Your other two properties are on repayment mortgage ending in 3-4 years ? surely these must have equity in them ?
Regards

[Chris.wnb]

hi, no we only have one property, but 3 mortgages! When my husband was in business and struggling the bank suggested we took out this £40,000 interest only mortgage over 7 years (goodness knows why!).