I have an IVA with Grant Thornton and finished payments last year, I am waiting on completion of the mopping up, been through PPI etc.
They asked for valuation of my mortgage and house and have now (after 6 months) have declared I have no suitable equity to make a full and final statement, they now say they need to do a variance.
What does this mean please and what kind of variance, I am going through a divorce and living in rented property, my ex wife is not on the IVA and refuses to be helpful where the house is concerned and I have no assets not even a car.
What will they be expecting from me and how do I get this moving faster with them, my wife has all the house now and the marriage settlement states she gets 100% of it. This is very stressful as I thought I was climbing out of my debt and am worried I will be dragged back down
Hi Paul. Without knowing what the equity provisions were in your proposal it is impossible to predict what variation GT are after. I imagine that it could be simply to ask the creditors to exclude the property from the IVA to allow completion. In modern proposals this is catered for automatically in a protocol compliant equity clause.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I had a 2008 variation when I joined GT, that stated they would value my house and look at equity, I thought that meant if I had no equity they would just close the IVA as a normal IVA , if I had equity but could not raise it then I would be extended, is this not so. The document was so legally written and no ne could explain it properly for meat he time but I felt pressured to accept it.
I expected all this to be done last year if they wanted more money or an detention but it was April when this started 6 months after finishing my payments.
Re-read that variation as it should detail all the options. The 2008 Protocol guidance reads:
"Home equity
9.1 Six months prior to the expiry of the IVA there should be an attempt to release home equity (this would normally be after month 54, unless the IVA has been extended for any reason). However, where the debtor is unable to obtain a re-mortgage, the IVA should instead be extended by up to 12 months.
9.2 The amount of the equity to be released will be based upon affordability from income and will leave the debtor with at least 15% of their equity in the property. Where it is appropriate to re-mortgage the property through a repayment mortgage (as opposed to interest only), the specific limits will be:
• Re-mortgages would be to a maximum of 85% LTV.
• The incremental cost of the re-mortgage will not exceed 50% of the monthly contribution.
• There will be a cap on the total equity release to not exceed 100% of the remaining outstanding debt.
This does not prevent the IVA Provider proposing a more suitable arrangement where the circumstances warrant it.
9.3 If the amount of equity available in the home at month 54 is under £5k, it is de minimis, and does not have to be released, and there would be no adjustment to the IVA term.
9.4 The costs of re-mortgaging to release equity should be deducted from the mortgage proceeds and the monthly payments deducted from the contribution. If the increased cost of the mortgage means that dividends to creditors fall below £50 per month after fees, monthly contributions are stopped, and the IVA is concluded."
If this was what your 2008 Variation introduced into the arrangement, there should be no need for a further variation --- however, as I said -- everything depends upon the terms of your proposal and that 2008 variation.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
One more thing, I am now coming up to 72 months after the start of my IVA, does this mean if I have paid all my 60 payments on time that they must consider my IVA as closed, it is 12 months since My last payment, can they start payments again after the 72 months if my contract states no more than 72 months to run?
Again, there should be a clause relating to the length of the arrangement ( which usually includes 6 months "admin" after the last payment). There should also be provisions in that clause for extending. If they do not give you notice of such extensions then the IVA should terminate ( but it might have to go to court to determine this).
Even though you say you have been through PPI etc, they might still be talking about a variation regarding this !!! Only GT can answer the original question with any certainty.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
