Hello,
When you enter an IVA assurances can be agreed to protect the family home.
Near the end of the IVA it may be necessary to remortgage your property in order to release some of equity to your creditors.
Creditors would expect a proportion of any equity to be realised and paid into the IVA at the end, for the benefit of the creditors. Typically this would be up to 75% of your share of the equity.
If you have negative equity or zero equity at the beginning of an IVA, creditors may ask for a valuation of the property in the fourth year of the IVA with 75% of your share of any equity at that point, which will need to be realised and paid into the Arrangement at the end.
The alternative is to release equity in the beginning to offer a Full and Final settlement IVA.
This is a legally binding arrangement with your creditors which allows you to repay a proportion of your debt in a one off lump sum payment. Normally the lump sum is raised by remortgaging your property or introducing a lump sum from relatives. Creditors are likely to accept your full and final settlement if we can demonstrate that this offers a better return than bankruptcy.
Kind regards,
Julia
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