Clarification Please.Long post sorry.

[olympic_torch]

I think i may have been working under a misconception
regarding my IVA, and i am no longer sure what my
arrangements are.
We accumulated so much documentation i am not sure what my
liabilities will be.
We have a "Summary Sheet for IVA's", which shows the figures
i have been quoting on this forum of 60 x £220, then funds from remortgage in Fifth Year of 20k.
We also have our Proposal document which states "We have agreed to finance the re-mortgage of our home at the end of the fifth year..in order to realise the maximum amount of our equity for the benefit of creditors. Based on our current financial position the maximum we would be able to raise would be £20,000 following deduction of fees and associated costs"
Then we have our Chairmans report which differs in that it states we will remortgage in year 4, not 5.
Also that we must obtain a minimum of 2 quotes, and accept the quote which provides the maximum return, and 100% of the debtors share must be paid into the arrangement.
I have a horrible feeling i have got a shock coming.


Aucto Splendore Resurgo.
(3 down, 57 to go)

[jpj]

At the end of the day you can only remortgage up to what mortgage companies will allow ! and i doubt many will let you go over 90% ! I know I have to remortgage up to 85% which seems about average.
JPJ

[MelanieGiles]

Hi Olympic

I do not want to be the bearer of doom, but the Chairman's report takes precedence over your IVA proposal. Was this not discussed with you on the day of the meeting?

The modification you refers to requires you to get two re-mortgage quotes, based upon your ability to lend at the time - ie in year 4. You have to accept the quote which brings in the most money, and pay all of that over to your creditors. As it is likely that you will only be able to re-mortgage to 85% loan to value, the equity sum eventually to be raised will be dictated by your property value at this time.

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

[olympic_torch]

Thanks Melanie.
It may well have been discussed, i could not stand up in a court of law and swear it wasn't, but, in common with many others on here the whole thing is so stressful, you would sell your granny if it meant getting the IVA through.
The report also mentions that monthly payments may stop in order to accomodate the increase in mortgage payments, or the IVA may be extended by 12 months. Based on todays rates, there is no way on earth i would be able to afford the increased payments.

Aucto Splendore Resurgo.
(3 down, 57 to go)

[olympic_torch]

PS.
Presumably, if house prices go up to an average of 300k by 2012 as mentioned on todays news and i end up with a shed load of equity, would i or could i end up paying back more than my original debt?.

Aucto Splendore Resurgo.
(3 down, 57 to go)

[MelanieGiles]

You only need to pay back the original debt plus the costs of the IP administering the arrangement at the time that you settle.

I would personally put this to one side now as something to be faced in the future. By the time you get to the end of the second year, things may seem a little clearer, and at the end of the day no-one is going to take your house from you if you cannot raise the sum required. I do wish that IPs would take more time to explain these matters to clients, however, at the time that it does matter - ie on the date of the creditors meeting.

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

[Adam Davies]

Hi OT
I must admit that I thought that you had been lucky,in a previous post,having your IVA accepted with a fixed equity release.
As Melanie states put it to one side now and face it in a few years.Things may hav changed,house prices may not have rocketed and you may be restricted to remortgaging for no more than 60% of your disposible income.
Sit tight because there is nothibg that you can do at this stage but your situation does add weight to my argument that Solicitors should get involved pre IVA to ensure that this contentious issue is fully explained.
I also agree that at the time of your creditors meeting most people will agree to just about anything to secure acceptance.
Maybe an automatic cool off period is needed ?
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

[olympic_torch]

In the words of Edmund Blackadder, "It rhymes with Clucking Bell".
What a dumb schmuck, its only taken me 4 months to read through my paperwork properly.
Still, nobody to blame but me.
As mentioned previously, once i heard the words "your IVA has gone through ok", the reliief you feel outweighs anything else, and, even if i had
heard the equity release amendment i probably wouldnt
have questioned it anyway for fear of jeopardising the decision.
There we are, it is what it is. I cant change anything now, no use beating myself up about it, or, even worse, letting Mrs Torch beat me up.
Trouble is, although the sage-like double act of
Melanie and Andy say to let it be for a couple of years, i now have a million questions whizzing round in my head.
I would be grateful for any help or advice from anyone else with the 100% equity release clause.

Aucto Splendore Resurgo.
(3 down, 57 to go)

[Skippy]

Hi OT, I'm sorry I can't offer you any advice about the equity clause as I don't have any property. I just wanted to say don't beat yourself up, or let Mrs Torch beat you up (unless you enjoy it of course!!!) - there are so many people who don't read the paperwork properly, or don't understand what they are agreeing to as they are so pleased that something is being done about their debts. I didn't read the figures in my I & E properly (there's a lesson to anyone considering an IVA - write up your own I & E, don't let anyone else do it) and I ended up not being able to afford the contributions as I was £200 short each month!

Good luck OT, I won't say try not to worry as I can understand what you are going through - Dave reckons I worry if I have nothing to worry about!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[MelanieGiles]

The "sages" are here to help you OT - so you ask as many questions as you like, and as you know we work long into the night for our forum members. You can bet your life that other silent forum members will benefit from the points you raise as well, and you always manage to make me smile!

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

[Skippy]

I agree with the last point Melanie - OT's posts always make me smile as well. I can still remember his comment on the weight loss thread about a net of sprouts, although I wish I didn't...

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[hara]

It is standard proposal that the house is remortgaged in4th year.

Then The IVA may end to take in to account the increased mortgage payment.

Which I Think is a good thing.

I have a feeling your IP my IP may be one and the same.

Who is your IP?

hara.

[MelanieGiles]

It is now pretty standard to see the equity release clause effected in the final year, limited to borrowings of 85% loan to value and increased mortgage payments of no more than 60% of the disposable income being paid into the IVA.

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

[olympic_torch]

Hara.
My IP is Grant Thornton.
Melanie and Skippy.
Many thanks for your kind words.
If i can help raise a smile amongst my fellow
IVA'ers, then thats a bonus,(about the only b*gger
i don't have to declare!)
I guess i will just keeep paying the monthly dues
for the next 2 years then see how things are.
My original dividend was 38p, based on 60 x £220 then the much hyped 20k equity release.
It says on my chairmans report that if i drop below this 38p my IVA will fail, so, if i was able to re-mortgage after 2 years, as long as i was offering
a 38p dividend could i complete early without having to cough up 100% equity?.


Aucto Splendore Resurgo.
(3 down, 57 to go)

[MelanieGiles]

I fear probably not. Creditors are unlikely to agreeable to an early settlement when they could get your ongoing payments and then perhaps a larger settlement at the end. But I always say that anything is possible in the world of IVAs - so keep the ideas in mind and review this with your IP at the time. And don't forget you are not paying 100% of your equity, but 100% of the monies raised from your equity release - which is expected to be based upon 85% loan to value leaving you with 15% of your equity intact.

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