www.iva.co.uk

Can anyone help with my query? As I have posted I am in the process of applying for an iva. I have just received my mortgage statement and in fact my secured loan in £114k with a property value of £120k max. I am aware that nearer the end of the iva it may be necessary to release the equity in my home. Now does this have to be raised by selling your home or remortgaging or would it be acceptable to pay by othr means i.e if a family member gave me the funds to cover the amount requested?

I am hoping that I can completely avoid the need to equity release as I was offered some great advice on here to try and have it made a stipulation of my contract that i will pay the iva for 5 and a half years instead of 5 to avoid the need for the equity release ( I will be paying approx £570 a month if the iva is approved)

thanks in advance

i am not sure you can avoid equity release, i hope i am wrong i would like to know myself. I ma not a porperty owner but all info is useful.

Hello,


The equity in a person's house is the excess of its value over the amount of any loan secured on it. For a house without a mortgage, or where it has already been paid off, it will be the total value of the property.


If you own a property, creditors would expect a proportion of any equity to be realised and paid into the IVA at the end, for the benefit of the creditors. Typically this would be up to 75% of your share of the equity.

If you have negative equity or zero equity at the beginning of an IVA, creditors may ask for a valuation of the property in the fourth year of the IVA with 75% of your share of any equity at that point, which will need to be realised and paid into the Arrangement at the end.

If the amount of equity you have in the property is more than the amount of your unsecured debts, you can't do an IVA, the creditors would simply expect you to remortgage your house to pay off the unsecured debts.

If the property is jointly owned with significant equity but only you are are subject to the IVA, then creditors will expect to see only your share of the equity go into the pot, so your partner's share remains untouched.

It would be accepted to offer a lump sum to your creditors by other means i.e family to finalise the IVA.

Kind regards,


Julia



For more information about IVAs, please visit my website:
www.supersonicsquirrel.net

IVA Squirrel is correct. I have to release the equity in my home after 72 months, but the amount is small compared to alot of peoples £6000. The IVA is 40p/£ the amount £73000. IVA monthly payment £500. By the way. Can anyone tell me how this compares to theirs? I am curious about these things. Seems they truly are *individual*.

All I have left is my humour.

My IVA returns 27p in the pound against a debt of c£65k, and I am paying £459 a month. I have no property, so no equity release.

Three down, fifty seven to go until freedom!

Equity release does not always mean re-mortgage or sale. It is perfectly acceptable to address this by making additional contributions (as I suggested earlier) or by monies raised by a third party. Remember it is the money your creditors want not the asset - and they don't really mind where it comes from!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk