www.iva.co.uk

I have been told today that our iva will be extended by another 12 months due to equity in our property.

Property value 120,000
Mortgage & secured loan 93,000 = 27,000 equity

But i have worked this out with the 85% LTV & there is only 8,500 equity left in interlocking iva's? Shouldn't the 5k diminis clause apply here?

In my opinion you are correct unless there was anything else in the proposal or modifications. Ask your IP for clarification in writing of where they get their reason for the extension as this may be a genuine error.

Hi Michael,

I have just checked our proposals & it says if our share of the equity is 5k or above then we will have to extend the term or try & remortgage. The 85% LTV IS also in there but nothing about the 5k being after the 85%. So i am thinking tha the 5k is at 100%?

Sounds like your iva firm have done their sums correctly.

I understand that the £5,000 clause is a trigger figure, not what you deduct from any releasable equity.

Chances are that you won't be able to secure further borrowing anyway, in which case your iva will typically be extended for another 12 months.