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My wife entered into a IVA and is coming to the end of the 60 month period this month. The debt was incurred by herself and has no connection myself. She has been informed that she must provide proof of the equity in the mortgage is less than £5000. Is the equity value split between us?

Yes, if you own the property jointly -- any calculation should only be based upon her share of equity.

Yes the terms are usuaully worded that the debtors interest needs to be over £5k for the clause to kick in.

Get your own valuation if necessary and order a 'redemption' statement from the bank to maximise the amount of debt to deduct as this will include penalties and termination charges etc.

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Foggy

Yes, if you own the property jointly -- any calculation should only be based upon her share of equity.

Thanks for your reply

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Lisa Thomas

Yes the terms are usuaully worded that the debtors interest needs to be over £5k for the clause to kick in.

Get your own valuation if necessary and order a 'redemption' statement from the bank to maximise the amount of debt to deduct as this will include penalties and termination charges etc.

Thanks for the reply Lisa. I also have a secured loan against the property will that amount also be deducted from any equity on the property?

Yes, the secured loan is treated the same as a mortgage as both of those need to be paid as a priority.

It will be deducted from the value of the property.

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by kallis3

Yes, the secured loan is treated the same as a mortgage as both of those need to be paid as a priority.

It will be deducted from the value of the property.

Thanks Bob
If the split equity after the deduction of the outstanding loan amount is greater that £5000. Will it be the case that my wife simply have to pay for another 12 months or could they ask for the release of the equity?

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by aka_carrot

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Lisa Thomas

Yes the terms are usuaully worded that the debtors interest needs to be over £5k for the clause to kick in.

Get your own valuation if necessary and order a 'redemption' statement from the bank to maximise the amount of debt to deduct as this will include penalties and termination charges etc.

Thanks for the reply Lisa. I also have a secured loan against the property will that amount also be deducted from any equity on the property?

Yes all charges need to be deducted when calculating the equity.

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by aka_carrot

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by kallis3

Yes, the secured loan is treated the same as a mortgage as both of those need to be paid as a priority.

It will be deducted from the value of the property.

Thanks Bob
If the split equity after the deduction of the outstanding loan amount is greater that £5000. Will it be the case that my wife simply have to pay for another 12 months or could they ask for the release of the equity?

Yes the 12 month extension will apply.

No they cannot ask for the release - the terms will state you either have to remortgage and if that is not possible and a third party lump sum settlement is not possible then the extension applies instead.

thank again Lisa

She might have to jump through the attempting to remortgage hoops (not all IP's insist on this, but it is a term of the IVA) ... currently she would not succeed and a 12 month extension will be applied -- assuming you have the standard terms.

Some modern ( post 2014 ) IVA's will have the option of requiring a secured loan instead. Some IP's have been known to try to force pre 2014 Protocol IVA'ers down this route, but have no right to force the issue.