www.iva.co.uk

We have just been sent a letter today from our IVA practitioner which has really knocked us for six and come like a bolt out of the blue.
We are in the 4th year of our IVA which we were looking forward to finishing in October this year.
I will write below what the letter says:
"In accordance with the terms of your IVA, you are required to seek to remortgage your property with a view to releasing equity into your IVA up to a maximum of 85% of the value of your property."
The letter goes on to ask me for wage slips, a mortgage redemption statement etc.
We can honestly say we knew nothing about this and assumed our IVA would be finished this October.
Please could you shine some light on this, we would be very grateful.
Kind Regards
Mr & Mrs D Love

You knew nothing of this??

Its one of the most fundamental parts of an IVA,
What does it state in your proposal?

Did you read said proposal?

This is quite normal, we had to apply for a remortgage with various companies in our 4th year, in the end it all came to nothing, but we did have to extend the IVA for an extra year.

Soul destroying and morale crushing springs to mind if this is the case it should have been made clear over the phone at the begining of the IVA. All my terms and conditions was done this way before I recieved any paperwork.

This must have been discussed and the clients would have signed an RX1 restriction on their property. I doubt that this is the first time it has come to light but the posters may not have taken it in.

Micheal, you may be surprised. I cannot recall ever being told about the equity release clause and feel it was largely brushed under the table at the outset. Luckily I had found this forum and was well aware of this obligation.

Similarly, the new protocol requirement (secured loan) is not headlined by the IP companies. I have checked all the leading IP companies and none seem to make any reference of it in their IVA headline claims.

Cynically speaking, I think some of the leas reputable IP companies dont tend to dwell on the downside of agreements. All companies are not the same.

I know how desperate people are to turn to an IVA so probably sign anything to see the end of their debt.

This just shows the importance of reading and re-reading everything. As Mike states, the client would have to sign form RX1 and it would also be wrote into the IVA proposal.

Equity release clauses are one of the most important things to be discussed with a client from the outset of an IVA, and are clearly detailed within the IVA proposals. I therefore really find it hard to believe that David could not have been aware of this requirement.

Perhaps some of the companies you have checked out mole, are no longer using the IVA Protocol because they don't believe in the secured loan provisions being reasonable? This would include my own firm.

I have to say that, with hindsight,the equity release clause was not very well explained to me, however i did have baliffs breathing down my throat and had about an hour before the bailiffs were coming down to take away machinery and close my business down.So if someone put anything in front of me that would have saved my business i would have asked "where do i sign". Now 5 years on if i was put in the same position i would like to think that i would take a more balanced decision, but in all honesty i doubt it becasue you are consumed by everything going on around you and it is at times like that you need proffesional people who will do their BEST for YOU not SELL a product to you.

It was only afer, that i realised what i had signed up to at the end of the iva but took the view that it was a sacrifice worth taking and my iva company and supervisor have been very good on the whole.

IVAs are quite complex documents and need explained in detail. However, some clients will only hear what they want to hear which is why we send numerous documents to the clients for signing so that they can take their time to read over everything. This is for the protection of ourselves and our clients alike.

I appreciate ( having been there myself) that many things do go in one ear and out the other and not all IP's take the trouble to ensure that it has been all understood.

It always makes me think of the surgeon discussing a "routine" op with a patient ... yes, it is "routine" for the medic, but usually a "one off" for the patient!

I always advise to take time out and read the documentation a couple of times, have a cup of tea, then read it again

I tend to agree with your comment Michael about only hearing what we want to hear, but it is part of the job of the IVA company, to make sure that it isnt which is what your company it seems does.

We do try and make sure everything is understood as we do not wish any misunderstandings later. Thankfully we have few complaints so we must be doing something right!

I could have been signing the Magna Carta at the time and I would still have been none the wiser. I have never sat in the same room as my IP or even spoken to him directly. My communication comprises of letters, emails and the odd phone call.

With respect, IPs do this for a living. You have qualifications to back this knowledge up. Most of us are quite vulnerable and scared when signing up to an IVA. I had never heard of the term before and it was quite daunting. I read the documents several times and with my untrained mind, I formed opinions as best I could. I remember a lot of phone calls to my insolvency firm at the beginning. The equity release was one if those questions and the answer was 'don't worry about that, it's years down the line and wont really affect you'.

'don't worry about that, it's years down the line and won’t really affect you'. - I'm amazed that someone at an IVA company would say that. It sounds like a line from The Simpsons when Homer buys a car and the salesman glosses over the balloon payment. At the end of the day, it doesn't matter who said what, but it's what's in writing that counts. I don't wish to appear patronising, but the equity release clause was as clear as day in my proposal. I appreciate that it’s a high pressure time, but to sign something that you’ve not read or understood properly is reckless. Having said that, would anyone not have signed if they did understand it? As adults, we’re responsible for our own actions. I was stupid and amassed a ridiculous amount of debt, which was my problem to sort out. I apologise if I come across unsympathetic, which is not my intention, as this is a great, well regulated site. It would be helpful if the OP would respond as per Desperate Bob’s request.