do all iva's have an equity relase clause?

[anais743]

My mortgage balance currenlty equates to 95% of my mortgage balance and it is interest only. I cant see there being much if any equity in 5 years with current market conditions and lack of funds for home improvements. This being the case does it make my iva proposal weaker?

[pbeck]

You will only have to remortgage up to 85% of the property's value in the last year, if at that time the existing mortgage still stands at over 85% of the property's value, there will be no equity to release.

Your IVA is no weaker simply because you have almost no equity. AS long as the expected return is above the hurdle rate (mostly 25p in the £ after costs but 40p for HSBC), then creditors will accept it if it is your best offer, better than bankruptcy, and achievable.

[MelanieGiles]

Hurdle rates Philip - surely a thing of the past now following Tuesday's IVA Protocal meeting!!!

[anais743]

does that mean the lower limit has now gone?

[pbeck]

Really, so we can now propose IVAs offering only a few pence in the pound ? That'll be amazing if the hurdle rates really have gone.

[MelanieGiles]

Well the proof of the pudding will be in the eating, and I rather suspect the profession will set its own hurdle rates, but we were advised at the DTI/BBA meeting that providing we sign up to the new IVA protocol - which makes life a lot earier to be honest - then we can expect creditors to review IVAs more sensibly and sensitively.

[carlmcmullen]

I agree, although hurdle rates are hopefully a thing of the past - if IP's are propsing IVA's with silly, low return dividends then creditors are going to begin to take a dim view to this and will begin to fight back.

Just a question i want to ask Melanie, have MBNA signed up the protocol given they are an american bank that perhaps dont fall under the BBA ?

[MelanieGiles]

That was raised at the meeting Carl, and I have queried it with their main voting representative today and await a reply. I will let you know when I hear anything.