ending up paying more than the original debt

[deanno]

I have an IVA in place with a 4th year clause and we are now in the 3rd year.When the 4th year kicks in do you still have to make the normal monthly payments.I had debts of 30k and make monthly payments at the moment of £300.We are in a part ownership home and my share at the moment is worth about 50k with outstanding morgage of 18k.If i have done my math correctly i will end up paying more than the original debt.Is this right,i must of misheard at the IP meeting

[gavin]

Hi welcome to the forum. I am not an expert
an expert will be a long soo to help you

Empty pockets never held anyone back. Only empty heads and empty hearts can do that.

[deanno]

I have an IVA in place with a 4th year clause and we are now in the 3rd year.When the 4th year kicks in do you still have to make the normal monthly payments.I had debts of 30k and make monthly payments at the moment of £300.We are in a part ownership home and my share at the moment is worth about 50k with outstanding morgage of 18k.If i have done my math correctly i will end up paying more than the original debt.Is this right,i must of misheard at the IP meeting

Ok dug out the paperwork and i'm paying 70p in the pound and then 50% of the equity.My share at the start of this was 44K.Looking at other figures on here 70p seems alot

[Lisa2009]

Sorry, i was under the impression that in part ownership you cant release equity to pay debts?? I could be wrong but im positive thats whats been said on other posts on this forum.
I'm sure if i am wrong one of the experts will slap my wrists.

mrs skint

[Adam Davies]

Hi Deanno
Mrs Skint is correct
As you are in a shared ownership property I think that you will find it near impossible to raise money via a remortgage.
Have a chat with your IP and raise this point with them and then let this forum know what they have to say
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[deanno]

What would happen if i can't remorgage.Also would i have to still make 60 payments of £300 still even if i could remorgage.Would they have been talking about taking out a loan?. Perhaps i should have listened better,but it was offered as way of not loosing my home.That was all that mattered at the time.

Deanno

[Andrew Graveson]

Shared and part ownership schemes vary dramatically and this leads to remortgage confusion (amongst mortgage brokers as well as everyone else).

I have a case (for a user of this site) for which we have won the support of the other part owner and the remortgage will not fail for that reason.

It's a highly technical issue; my suggestion would be to contact one of the brokers that post on this site and have as much of the paperwork regarding the home purchase and mortgage to hand as possible. Brokers normally need to do a bit of research on these cases to establish the viability of a remortgage.

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

[MelanieGiles]

Andrew has advised brilliantly with regard to the remortgage side of your query. With regard to the IVA, regardless of the terms you agreed at the outset of the arrangement, if you were offering 70p in the £ before the proposed equity release, I do not think that creditors will want to see the case fail if you are unable to remortgage. This may involve a further meeting of your creditors, but so long as you can demonstrate that you have tried to find secured funding and failed to do so, this should not be a major issue. Obviously make sure that you keep up with your monthly repayments in the meantime.

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

[Cybus]

Ok dug out the paperwork and i'm paying 70p in the pound and then 50% of the equity.My share at the start of this was 44K.Looking at other figures on here 70p seems alot

70p may seem a lot to pay back, but if you look at it from the creditor's perspective. They are not lending money with a view to only getting 70% back, they are doing it with a view to getting it all back.
No one should look at an IVA with a view to seeing how big a write off they can achieve, they should look at it as a way of making the best offer of return to creditors who have loaned them money. (Whether the lender is irresponsible or not is another question!)

I personally think you should be feling quite pleased with yourself that you are able to offer 70p in the £. I suspect that you have become quite aware of your position and have chosen to do something about it early on as opposed to putting it off and putting it off. More often than not, the earlier someone acknowledges and deals with financial difficulty, the easier it can be dealt with with a more satisfactory outcome all round.

I too very much doubt the IVA will fail if you are unable to release any equity. You should however be prepared for the outside chance (And it is outside) of creditors asking for a further 12 months contributions to be made in lieu of equity.



Tell it like it is.

[deanno]

Thanks for the helpful replies.Just out of interest what sort of figure do you think they would accept as a F+F payment.

Deanno

[MelanieGiles]

Unless you are struggling to make the payments for any reason, I would have thought a sum equivalent to paying 70p in the £ would be a good starting point.

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