equity release in year 4

[MelanieGiles]

Olympic - you will need to check the terms of your IVA to see what provision there is for this. The new protocol only affects IVAs with effect from 1 February 2008, and then only if the IP has embraced the policy as it is not compulsory.

[olympic_torch]

Melanie
Definitely in my small print.
If i cannot raise equity they MAY increase
IVA to 72 months.
I could be in for the long haul.

[WPD08]

Hi there, I have been in my IVA (JOINT) for 2 years now and have been approached by an Independent company with an option to make a full and final settlement to end our IVA early but we are not sure whether it would be worth doing financially. The thing that is really concerning me is this 4 year equity release clause that I have been hearing about but cannot seem to find any reference to it in our IVA proposal can you tell me where I am likely to find it and is it in ALL IVA proposals as ours does not include our mortgage.
[?]

[Adam Davies]

Hi
The equity release clause is not in all IVA agreements but it would be unusual to not have one if you are a property owner.Mortgages are secured loans and are not included in IVAs.Check your chairmans report following our creditors meeting and better still contact your IP to confirm.
If your property is required to be remortgaged in the fourth year it will make a full and final selement more difficult so be sure to confirm this point
Regards

[WPD08]

Many thanks. I contacted my IP and they confirmed that we do not have the equity release clause in our IVA so therefore we think it would be more beneficial for us finanically to stay in the IVA for now or at least until November of this year when our fixed rate on our mortgage expires.

[kat66]

Hi there,
I,m new here.

Can I ask a question if possible.

What happens if there is insufficient equity in your property in the fourth year? Does the IVA payment each month continue until the creditors receive their full dividend. Ie if you have paid 30p in the pound at that point and then need to pay anothr 20p in the pound to them does it just go on and on?

This looks like a really helpful forum, I am learning lots

Kat66

[Viki.W]

Hey kat66, welcome to the forum. You would need to have a look at your terms and conditions or just give your IP a call. If you can't release equity then sometimes your payments will just conclude after the 60 months or sometimes you would have to make another 12 months payments, best checking with your IP. Keep posting.[:)] X

[Fiddlesticks55]

Not 100% sure if you could do this, but wouldn't an equity release mortgage help in some cases. It may help some people to get out of debt by gaining a lump sum of cash. I've added a useful website with a handy equity release calculator, hope this helps...
http://www.agepartnership.co.uk/

[David Mond]

It would depend on (a) what the property was currently worth (b) what was currently owing (c) what equity release could be raised etc etc to see whether the amount needed to settle the IVA can be obtained.

Some of these equity release houses are very expensive so watch them.

[gord]

Surely it is going to be difficult for any person in an IVA to get a mainstream lender even be prepared to remortgage - unless you have a big loan / equity balance .and if that was the case you would have used that balance earlier to end the IVA I have an unsecured loan with my mortgage provider so come the day I cant exactly see them rushing to to lend me more - but who knows .

To my layperson logic it does seem a bit crazy to take on more debt in order to pay of existing debt ? - Isnt that how we all ended up in stook in the first place ?

I realise that creditors need to be paid back the maximum affordable amount - but I just feel a bit uneasy about anyone taking on more secured debt to do this

[David Mond]

Well it goes something like this. If there is equity the person can either sell the property to release it to their crediors or re-mortgage. The re-mortgage amount cannot exceed 50% of what they were initially paying into the IVA - so overall whilst taking on "new debt" it should be affordable and the debtor should have a new monthly surplus!

[mrshubbard1933]

***Post deleted, please don't advertise on the forum***

[MrsPurple]

Hi We are in our 4 year and have an equity release due in a few months, however our mortgage is tied for another 2 years with a redemption penalty payable. What will happen in this current environment regarding getting as new mortgage? and also as house prices have gone down.

I just want to be out of IVA asap. Also our payments increased last year due to mme getting a job, does the increase get knocked of the debt? and also the 50% of IVA payment increase of mortgage is it the initial payment or the most current?

CHeers

[Shining]

Hi Mrs Purple have you spoke directly to your IP? it may be that you will pay another 12 months contributions into it. If you don't have a specified amount of equity within the property (check your proposal) then the IVA will conclude after 60 months I believe.

In respect of the additional payments, it will create a bigger dividend to the creditors.

I'm sure a professional will be along soon to advise and wish you well x

[MelanieGiles]

Unless you end up paying your creditors in full, the increased payments you are now making - presumably based upon your revised actual income and expenditure will not reduce the IVA term.

The nature of the redemption penalty will not necessarily affect your ability to remortgage, in fact it is probably quite helpful to you as it serves to reduce the equity available for you to raise.