Could we be forced into selling our house?

[valf]

My husband and I entered into an IVA in March 2007. In retrospect i think we panicked after my husband lost his job. My question is regarding the remortgage clause in year four. When we reach this point in Our IVA my husband will be sixty and I will be fifty five. At the moment I am the main wage earner, realistacly my husband will never reach the earning petential he had in his last employment, and is currently earning less than half his previos income. What will happen if we are refused a remortgage, either because of age or lack of income? Could we be forced into selling our house?

Thanks

Val

[catullus]

Hello Valf

You need to read the clause in your proposal carefully that deals with the remortgage requirement.Many of the clauses go on to say what happens if, for whatever reason, you cannot secure an offer but, very rarely, would they state that you would be required to sell.

I suggest that you have a look at the proposal and post back if you are in any doubt.

[ray_a]

Another alternative would be for you to extend the IVA for a further year. I believe this happens quite often!

[MelanieGiles]

It really will depend upon the amount of equity you have available at the time. I cannot see creditors wishing the arrangement to fail at that time, if you have paid over five years worth of contributions, or expecting you to sell your property as you near retirement, but again this highlights how important it is to consider the implications of these provisions and modifications before agreeing to them. What advice did your IP give you regarding this issue at the time?

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

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http://www.melaniegiles.com/ivaEnquiry.asp

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[iva experts]

Welcome to the Forum Val,

I would think that if you have little or no equity in your house in year 4 of the IVA that your creditors would just ask for another year of payments from you.

Double check your report to see if it says anything specific about this.

Best Regards. IVA Experts

[iva_squirrel]

I agree i think your creditors would extend the IVA for another year.
Have you spoken to Your IP already?


Regards,
Michelle P.

[valf]

Thankyou very miuch for your replies.
The clause in our proposal just states the remortgage requirement and the percentage of equity. I spoke to our IP and explained my concern about the possibility of being unable to remortgage, and in this circumstance would the creditors accept an extension of twelve months to the IVA. The reply was, that this would be a change to the original proposal, and would have to be put forward at another creditors meeting for approval. And could of course be refused. Also the new proposal could only be put forward on the completion of our fourth year. If the request was refused our IP advised it was indeed a possibility that we may be forced to sell our home to prevent the failure of the IVA. At present we do not have enough equity to remortgage, and if we had we would certainly fail on income to cover it.
Regards
Val

[Adam Davies]

Hi
I,m getting concerned at the threats that people may have to sell their house if an equity release is not possible.The IVA is marketed in such a way that the debtor is made to feel that their property is safe under an IVA,compared to bankruptcy,and yet we have instances recently of debtors having to possibly sell their house in order to comply with the IVA.
I am aware that they can,t be made to sell,unlike bankruptcy,but the consequence of not doing so may be the failure of the IVA leading to bankruptcy.
Again something is not quite right with the system and it,s the debtor that will suffer even though they have contributed as per the original proposal.
It will be interesting to see the outcome of a test case.
Regards


Andy Davie
IVA.co.uk Spokesperson

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