www.iva.co.uk

We're due to finish our IVA in November, but when we had the house valued, there isn't enough equity in the property to raise the additional £4000 needed to pay the 44p in the pound, we agreed at the start of the IVA (as we expected house prices to go up at some point). Are the IVA company / creditors legally allowed to extend the period of the IVA or make us bankrupt, as it's seen as a default on the agreement? I thought the point was that it had to be affordable and anything left at the end of the term was written off.

Jane.66 wrote:

We're due to finish our IVA in November, but when we had the house valued, there isn't enough equity in the property to raise the additional £4000 needed to pay the 44p in the pound, we agreed at the start of the IVA (as we expected house prices to go up at some point). Are the IVA company / creditors legally allowed to extend the period of the IVA or make us bankrupt, as it's seen as a default on the agreement? I thought the point was that it had to be affordable and anything left at the end of the term was written off.

We were unable to re-mortgage too, but we did have the equity... we were asked to extend for 12 months. I believe this is the normal procedure if money is not available through your property, however I am sure a person in the profession will be on here soon to give you a more accurate response. I am sure your I/P will be able to advise.

Jane.66 - have look at your proposals - it should mention about equity release - and the protocols if this is not forthcoming. It may mean extending the period of the IVA. What has your own IVA company/IP said ?

Hi ginger3232 - thanks for your reply. Our IVA company have said that we can ask the creditors to extend the agreement for 6 months and continue to make payments at the same monthly amount, but they said they couldn't guarantee that this would be accepted. As te shortfall is classed a default on the original agreement we could be made bankrupt. Seems rather unfair considering it's not our fault house prices have stayed the same!

You won't default an iva because you can't free up equity or expected equity isn't there. A reasonable solution is a 6 or 12 month extension but check the detail of your own paperwork as it should clearly state what will happen.

Paul

It looks like you have a minimum dividend requirement so the IVA will need to be varied to remove that. I would not expect you to need to extend the IVA at all