www.iva.co.uk

Morning!
I know I am jumping the gun (IVA not approved yet!) but we are offering to pay for an additional 12 months to compensate for the lack of equity in our property. If, during the course of the IVA house prices increased sufficiently for us to remortgage, (assuming we could afford to do this)are we able to offer a full and final settlement to creditors at this point?
Regards
Blue

Hello Blueshoes

Yes, you would be able to do this by varying the terms of the IVA - this means another meeting of creditors to decide whether to accept the proposed variation. Creditors would expect to receive a similar dividend to that offered under the existing terms of the IVA in order to accept the variation, although they would consider all the relevant circumstances at the time.

As your IVA has not been accepted yet it is likely that creditors will put forward modifications that instead of the 12 payments in lieu of equity you remortgage in the 4th or final year of the IVA - this should be explained to you at the creditors meeting if applicable.

Hope this helps

Jane Finch
Insolvency Practitioner

AccumaGroup - A large insolvency practitioner service based in Manchester.
www.accumagroup.com

Thanks Jane
Our IP has suggested the 6th year payments instead of the 4th year remortgage. Our preference is to go with the extra year's payments and gamble that this will cost us less (and certainly be less hassle) than the 4th year remortgage. At present we owe 98% of house value in mortgage and early redemption fees, so there is a chance that the 4th year clause may work better for us(ie no equity to release), as the house value would need to increase by a fair bit for us to be able to raise funds up to 85% LTV.
Thanks
Blue

Hello, it is fairly common to take this approach, however there is a risk that creditors will put forward modifications as outlined above.

Good luck with your meeting!

Jane



AccumaGroup - A large insolvency practitioner service based in Manchester.
www.accumagroup.com