www.iva.co.uk

I have been an observer for quite a while and thank all for your advice. I have decided to go into an iva offering around 45p to £1, thats inclusive of fees. My equity currently stands at 15%, therefore no equity to be considered, but still my ip insists on offering equity release at year 4. IP insists that this will make the creditors view my proposal favourably. I do not feel there is a need for clause. Please correct me if i am wrong. I am waiting for the proposal to arrive any time now.

Power to change is within me

Hi Sorted
Although you have limited equity now the chances are that in year 4 you will have quite a bit.Your creditors will almost certainly request this as a modification if your IP does not propose it.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Thanks Dave
I will wait for the papers and to see the actual clause.
thanks again

Power to change is within me

As Andy says it is likely that the creditors will want this clause included as they will feel that the chances of your property increasing in value over the next 4 years is high.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

Agreed - proposals for property owners these days will not be accepted without the equity release clause, so you might as well put it forward in the first place.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thank you all for your prompt response. Just a another matter, if in the 4th year there is no equity or you are unable to remortgage, what happens? Who and when is the 6th year proposed?

Power to change is within me

If there is no equity, then there is nothing to raise. I feel that it would be very unlikely that you would not be able to re-mortgage at that time, but if this was the case your Supervisor could call a meeting of creditors to determine the way forward - which might involve offering an additional year's contributions.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

What happens if you have a 4th year equity release clause and in year 4 you have equity but the property is worth more than 3.5 times your annual income. From what I remember when I bought my house most of the mortgage lenders I looked at would only lend 3.5 times annual income.

Using my situation as an example -

Earn 20k per annum and own an 80k property.
When I bought the house it was worth 70k and I got the maximum 70k mortgage I could on it.

If on year 4 my property value has risen to say 120k but my income remains the same, how do I release any of this equity for my creditors?

Lenders will now look mainly at the affordability of the mortgage proposition rather than an income mulitple.

If you can not afford to remortgage then you may have to continue making monthly payments to your creditors for another year.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp