Hello I hope you can help / advise me.
Husband's iva due to finish end of July.There is the remortgage clause in his iva and the amount due would be £17300.00 We have tried to remortgage but failed. The IP tried for us and also put us in touch with two different people who they thought could help. The first one came back with a suggestion of a loan for only £9000 but with ridiculous interest rates which would mean paying back over £24k. The second one said he thought a year extension on the iva would be the best option. My husband wrote to his IP to say we would not be going with the loan as it was interest rates such as those which got him into financial difficulties in the first place and asked for them to consider the one year extension. He has just received a letter from IP saying that they understand our concerns for not going with the loan but that he should try and remortgage or get a loan with a lower / more acceptable interest rate. We really do not want to remortgage as our current mortgage has a good rate and we only have 12 years left to pay ( we will be 60 then) so we really do not want to add years onto that as we may struggle to pay for longer.Our current mortgage may allow us to remortgage up to £9k . . .Do you think we should offer that or is there a possibility of paying the iva for a further year ? ( which we would prefer). Also, if we really cannot remortgage do you think they will make him bankrupt after paying consistently for five years? We don't know what to do for the best . . we both work but are really struggling to eat / pay bills. The original debt was 55K and over the five years he has paid back almost 18k. Any advice would be greatly appreciated
I assume that the IVA is in your husband's sole name and you were advised of the remortgage conditions at the beginning. Therefore anything that is agreed must be done with your permission and in line with hat was agreed at the start. An extension may be appropriate as could a loan and if in doubt you could consider legal advice for yourself.
Whilst the IVA sits on your husbands CR (assuming you are both on the mortgage) your chance of getting a re-mortgage is about nil! If your proposal caters for the 12 month extension then push for that, from what you describe this will be the lowest cost to you. It’s unlikely but please check your old proposal will even mention secured loans or similar
This secured loans business whilst I’ve seen it work on a recent post, probably the exception rather than the rule. If all were as diligent as you Michael then it wouldn't be an issue of course, but I fear the more unscrupulous element of the IVA world will see it as cash cow and the new unsuspecting will get mullerd!
From a time and human perspective five/six years is long enough, you just about manage it, any longer and it could start to break people.
There's a huge irony with secured loans in as much as that often the higher the rate the better it can be. Under no other circumstances would you say that but, depending on the wording in your IVA, this may mean that you have to borrow less because the amount you have to borrow is limited by the monthly payment. I would suggest that you consider all options, possibly with the help of a specialist, before you make any final decision. If you take a loan to put your IVA to bed once and for all there's a good chance that you could remortgage in a year's time to settle it at a much better rate of interest overall.
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Insist that if your husband's IVA was not proposed in accordance with the IVA Protocol, that it be varied to accept the then, and not the current, protocol terms - which would have allowed you to pay a further year's contributions into the IVA in lieu of equity. In my experience, creditors always accept them, and why should you tie yourself into an expensive secured loan when you don't need to.
