4th Year Equity Clause

[northumbrian69]

Now that the economy is slowing down and house prices are falling[:D][:D][:D] what will happen to the 4th year equity release clause if the current trend continues and you find yourself in or very near to a 'negative equity' situation during the 4th year of an IVA.
Does the clause have to be invoked 'during the 4th year' as stated in the IVA or can the creditors change the IVA terms so that equity release happens at the end of the 5th year, thus guaranteeing the maximum return.
Or do the creditors just have to accept that there has been a downturn in the market in which case I assume the IVA would just run to 60 months and then be finalised.
Feedback from the experts would be appreciated [:)][:)]

[debbiw]

Would the creditors not ask you to continue paying for another 12months if this was the case[:)]

[jpj]

If theres nothing to release...theres nothing to release!.. As far as I viewed it the 60 months paying back as much as you can was it...and if there was extra funds from equity release that was merely a cherry on the top for creditors!
house prices may well pick up again in a couple of years time and rise by 5 or 10% ...who knows.

[ray_a]

I asked this when I went into my IVA and was told the IVA would be extended for a further 12 months!

[debbiw]

Ray_a, I thought I had read this too on previous posts. [:0]

[northumbrian69]

Mine just says if I am unable to arrange two offers of remortgage, the IP will call a variation meeting (this assumes there is equity available), it doesn't say anything about an extra 12 months if there is no equity available.
Is there a hard and fast rule relating to this subject [?][?][?]

[debbiw]

I think i have read on other posts that at the variations meeting, the creditors can ask for payments to run an additional 12 months, to make up for the equity release clause, but that may not be the case with every case. One of the experts will be able to advise better

[MelanieGiles]

There are many differing variations of the equity release clause, so all parties should study their own IVA proposals and Chairman's Reports to ensure they understnad the terms. Seek advice from your IP if you need to, but the bottom line is that if there is no equity then there is nothing to release. Sometimes this is negated by the need for a variation meeting or an additional 12 months payments.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[bluemoon]

We have an equity release in year 4 , obviously we'd rather pay another 12 months payments than higher mortgage payments for another 20 years.
Just have to wait & see what happens nearer the time.
Regarding the two valuations we would need, are the free estate agent valuations ok, or would we need to pay the hundreds of pounds for a 'valuer' to value our home ?

[cat 1]

i already have a 6 year IVA so what would happen then. Can it be extended to 7 years and so on and sao forth?

[Adam Davies]

Hi
If it's not written into your chairmans report then your creditors can only extend your IVA at a variation meeting.
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

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

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