www.iva.co.uk

Hi,

I am 3 months away from my original 5 year end date on my IVA with Creditfix.

I have received a letter stating my equity in my property and my inability to obtain a mortgage mean I will have to extend by a year.

I have raised the clause below with my IP who are stating the "gross" figure of £5k is based on 100% LTV not the 85% as stated in the first clause.

"Where the debtor is unable to obtain a remortgage the IVA should instead be extended by up to 12 months"
"Where it is demonstrated that after month 54 the equitable share is less that £5000 (gross) the property is to be excluded from the arrangement without extending the term"

Could one of the professionals or someone who has experienced similar let me know if I have any choice but to extend ? My interpretation was the 5k clause was based on 85% LTV not 100% ?

IP was not happy I was questioning it, but when I did lo and behold my initial valuation they gave me dropped by 8k !

Figures related are :

Property Value : 121k
Mortgage redemption : 102.6k
Equity at 100% LTV : £18.3K
Equity at 85% LTV : £218

Thanks for reading and hopefully someone can help me clear it up.

Jimh

It should be based on 85% LTV plus £5k deminimis. In other words you should have 15% equity plus £5k.

103/121 = 85% so, on these figures you do not have sufficient equity given the £5 deminimis and the IVA should end. I have heard some I.P's are interpreting this differently but I can't see how as it's fairly straightforward that allowance is made as equity is negligible I.e £5k then it's considered too small to release.

Thanks for the reply, the IP is stating the "gross" element of the clause means they can extend.

They have contacted "a company they use to determine my eligibility for a remortgage" who have said I would not get one, therefore the second clause is based around 100% LTV and not the 85% LTV as stated in first clause.

IP was very abrupt and couldnt understand why I was even questioning it !

Which company Jim ?

Who valued the property?. Remember it should be on forced sale basis not market value.

I have never seen clause written as "gross" but the clause is the clause and it would appear you don't have the normal protocol compliant clause regarding equity release. Worse case scenario is another 12 month extension but frustrating file you I bet as you thought you were finishing!.

Mole its Creditfix - originally Simple Debt Solutions but they were taken over by Creditfix.

Winter_blues - my IP originally values at 129k when I contested this figure and gave them my figure of 121k based on latest properties sold in my area they then reduced it to the 121k valuation.

Thanks all.

Check the wording of your iva proposals.

Mine specifically requires an open market valuation, not a forced sale one, (which sucks). So clearly this provision may vary firm to firm.

Those clauses are woolly to say the least. In the first instance can you contact your IP to see if the IVA was proposed in accordance with the IVA Protocol - if so, then the £5,000 is based on the 85% figure and not the 100% figure.