Equity payment to IVA

[uselessmick]

Hi Guys,

I am currently in my third year of my IVA and boy do I wish I had come across this site before, what a fantastic source of info for people considering an IVA. I would have really found some comfort in all this support & info when going through the process, so my hat off to those responsible and all the contributors.

I have been looking at all the various topics on her, but have not found one covering my query, so hence my question...

As part of my IVA, I have agreed to make an equity payment from my property of £25,000, which is half the total equity in the property as it is joint owned with my wife...My IP was quite open to me relaesing this equity early on in my IVA, but I did not feel this was possible as to remortgage would take me way above my agreed monthly expenditure, so I have leaving it until nearer the end. This is also because for reasons that can only be put down to insanity, I entered into a Bank of Scotland Shared Appreciation Mortgage some years ago, when I needed capital to start my own business. The nett result is that the BoS will always own 75% of the equity in my home, so to mortgage that out would be devilishly expensive...

Anyway, I keep getting these news letters sent through the post and one this week has warned that no matter what you agreed at the inception of your IVA, you IP will attempt to get whatever they can from your property equity payment in the fourth year i.e. they will attempt to get much more than was agreed...Is this actually correct?

If it helps my total debt at inception was £81k with repayment being £44k returning 39p/£

Thanks in advance
Mick

[catullus]

I have to admit that I'm not familiar with the BoS mortgage that you refer to but, at the end of the day, they "own" 3/4 of the equity in your home and presumably will get that first out of the proceeds of any remortgage.
Your IP can only (and must) do what the IVA proposal says. If the property clause in the proposal says that you will remortgage in year 4 based on the valuation AT THAT TIME then that is what you will have to do, regardless of what indicative valuations may have been included in the proposal at the start. Of course this works both ways, if there was a fall in property values and the creditors got back less than what the statement of affairs showed that is not your fault and you will have complied with the terms of the IVA.
If your IP will let you remortgage now (and presumably allow the increased mortgage repayments as an allowable expense in the IVA), and you judge that you can afford this, then you might want to do it if you think that property values will increase over the next 1to 2 years. If you think that they will fall, you should hold off because it would cost you less ultimately.
So, to recap have a good read of the property clause in your proposal and when you know which way property prices will go please let me know because I haven't got a clue!!

[uselessmick]

Thanks Catullus, I will indeed go through the equity clause with a fine toothed comb..

As for the property prices, I have lost my shirt by making bad decisions over the years, so I'll tell you what I think, then you should do the exact opposite![:D]