Do you actually have debt written off?

[kah]

When my IVA end in February 2011(should I get there) - I will be due to retire in May of the same year. It's likely that at that point I will have a possible equity release of 100.000. My proposal says a 70% equity release will be looked for. At that point i will have payed back c.50,000 of a 110,000 initial debt.
The problem is that once I retire - i won't be in a position to pay the mortgage. I will have a work pension (not vast as I have had time off for childcare and my state pension will not be avialble until 3 years after my work retirement age.
When I talked about this with my IP I was told that I would not be expected to take out a mortgage I wouldn't be able to afford to complete my IVA. Nothing about this in my proposal - but phone reassurances were given.Reading all these postings - this doesn't seem to be the case.
Any thooughts?

[Andrew Graveson]

Hi kah,

There's another thing to think about on this subject. A mortgage lender is not going to want to lend you money that you cannot afford to repay.

Equity release simply isn't going to happen if a lender will not lend. You may consider this to be a good or a bad thing in light of the circumstances.

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[kah]

Well I will have payed back the percentage originally agreed and some more - so will it be written off?

[Andrew Graveson]

I think that's going to be a question for one of our IP's.....

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[catullus]

Hello kah

You need to have a very close read of the clause that deals with remortgaging.

Good clauses (of a year or two ago) should state that the debtor will use their best endeavours to remortgage (or something like that) and that the debtor will agree to provided the supervisor with evidence of the mortgage offers that you receive.

They should be worded in such a way that if no such mortage offers can be obtained (two or three declines should be sufficient evidence) then you will be deemed to have fulfilled your commitment to the IVA and that will be bthe end of it, at the end of the 5 years.

Some Supervisors may take the view that a variation to the proposal would be required and it really does depend upon the precise wording of the clause under consideration.

It's worth noting that current clauses anticipate an inability to remortgage and, in that event, state that a further 12 months contributions will have to be paid to buy out the beneficial interest.

You should also note that , if you can remortgage, then in all liklihood that is what you will have to do even if this takes you over the 100% because, in that event, creditors would be entitled to interest on their debts at 8% simple for each year of the IVA.

[MelanieGiles]

I find it strange that you were asked to remortgage and you agreed to this at a time when you will be due to retire and your income is likely to be reduced. What thought process did you and your IP go through when considering this at the time of your creditors meeting?

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

[kah]

This clause concerned me greatly. I phoned the firm (Freeman Jones) and they said that I would not be expected to remortgage at a cost beyond my means (retirement). I believed them. My mistke it would appear ....

[MelanieGiles]

Not your mistake - if they told you something you were right to believe them, as they are the professionals. Now is the time, however, to get them to confirm that advice in writing, so that you have something to rely on when the need arises to address this issue.

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

[kah]

Thanks Melanie. I have just emailed them and expect a reply. I will let you all know what I get back.