www.iva.co.uk

Can someone tell me what the following sentence means. 12 additional monthly contributions (with the aggregate sum paid to the supervisor being limited to 85% of my
interest in the property).
I have just had letter saying pay 12 months extra.Not quite sure what the wording means (in brackets).Thanks

It's to do with equity in your property,if you have more than £5000 equity in your property after the valuation

Example
Property value £100000
Mortgage £75000
LTV@85% £85000
equity £10000

Hope I've done it right but someone with more knowledge will be along later to explain it a bit better

85% of your interest is definitely not the same as 85% ltv.

85% of your interest in the figures given as an example would be 85% of £25,000 if mortgage is solely yours or in proportion to your share e.g. £12,500 if it's a joint mortgage and just you in an iva.

That's the most you will have to pay. Check the equity you have, calculate your monthly payment times 12 and you will pay the lesser amount.

Hi Phil it sounds to me like the letter is confirming that:

a) as you have more than £5k equitable interest in your property and
b) you can't remortgage

then you have to extend your IVA by 12 months and pay 12 months more of contributions (capped at the level of equitable interest).

Effectively you have one more year to go in lieu of being able to pay in your equity.

It means you get to keep your home as the IVA intended.

If you think this is wrong the starting point will be to challenge the valuations used and argue that your interest is less than £5k.

Best of luck.

The words in brackets mean that the sum of the 12 months payments should not exceed 87% of the amount of equity available.

So, if you paid, say, £200 per month, over 12 months that would be £2400 .......

IGNORING ANY DE MINIMIS CLAUSES:-

If the equity (at 85%) worked out to be, say, £5000, you would pay the full 12 months. If the equity came in at £2000, you would only pay for 10 months.