EQUITY IN THE HOUSE

[Mark.B]

hi there does anyone know what the creditors want you to do with the equity in your house after having a IVA for 4 years what happens if you dont want to remortgage

[kallis3]

Hi Mark,

We have a remortgage clause with our IVA, I think it is pretty standard now.

We have to try and get a remortgage, but if we can't, or the repayments are too hgh, we have to carry on with the IVA for an extra 12 months.

[MelanieGiles]

This will be dictated by the terms of your specific IVA, and if this is already included in the proposal you have already agreed to re-mortgage. If you refuse to do so, the IVA will fail and you could find yourself bankrupt. Are you already in an IVA, os just considereing whether this is an option for you at present?

[Mark.B]

thank you , so if you cant afford the new mortgage payments you carry on with your IVA until finished

[kallis3]

With ours, the repayments have to be less than 50% of the IVA payments, if they are more, we just carry on for an extra 12 months.

[Mark.B]

Thank you Melanie, i am looking at going in to a IVA my interview with ip is on monday , the remortgage is scaring me a bit

[MelanieGiles]

Your IP should have already advised you that you will be required to have your property revalued in the final year of the IVA, and then you will be required to seek a remortgage subject to a maximum loan to value of 85%, which firstly pays off your existing mortgage and then introduces any spare money into the IVA - subject to a diminimus level of £5,000. Your increased mortgage payments are not to exceed more than 50% of your then IVA monthly payments. It will be nigh impossible to avoid this provision if you want creditors to accept an IVA.

[Mark.B]

thank you my current mortgage is 808.00 a month

if my iva was 400 a month and a remortgage was going to be say 1200 a month would it then not apply

sorry for being a pain

[MelanieGiles]

If your IVA was £400 per month, and new mortgage would be limited to £200 per month, and therefore you could not pay more than £1,008 using your figures.

Hope this helps - and I assume that you are having a face to face meeting with your IP tomorrow?

[Mark.B]

thank you , i am booked in for a hour long phone call, anything i should ask or expect

[MelanieGiles]

They need to meet you on a face to face basis as you are self employed and this is a statutory requirement under Statement of Insolvency Practice No 3. Has this not been discussed with you?

[Mark.B]

no. they did send a person around to my house but it wasnt the ip he basically came around and checked all my paperwork and my proofs and took them away

[MelanieGiles]

That is not the same as compliance with the SIP.

[Soulgrowth]

Hi Mark

I had my face to face meeting with my IP after the initial meetings by telephone had taken place and the IVA propsal was in process. Make sure that you write all the questions down that you want to ask prior to the telephone appointment so that you cover all the ground you need to.

I wouldn't worry about the release of equity (re-mortgage requirements) alot can happen in four years, I would certainly advise you not to let it put you off going for an IVA at this stage.

Good luck and let us know how you get on tomorrow.

Debbie