I didn't say it was unfair for creditors to want as much of my debt back as possible, I'm well aware that's what they want, I'm suffering that pain with most of the other Forum members [xx(][xx(][xx(]
What is grossly unfair is, the financial downturn was mainly caused by the banks in the first place and releasing equity has become impossible mainly because of them, so instead of just accepting the situation that no equity is available and allowing the IVA to end at 60 months they look for new ways to squeeze a little bit more by changing the rules.
It's strange this extra 12 payments began to regularly manifest itself when the housing market and mortgages went 'belly up', when I first started posting on the Forum this subject was hardly ever mentioned, now it just seems to be the norm.
Broke of London wrote:
The downturn couldn't have been factored in when your proposal was drafted so it is unfortunate this has come as a surprise but i wouldn't say it is unfair for the creditors to want back as much of your debt as possible.
IVA COMPLETED ON THE 17th MARCH, FINAL I&E COMPLETED 26th APRIL, COMPLETION CERTIFICATE ARRIVED 2nd AUGUST
The downturn was caused in part by people like us who borrowed more than we should have. When we defaulted on our debts, the banks' loan books went t*ts up and banks had to reprice their risk when lending to other banks. The banks can't afford to lend at current LIBOR rate and here we are with no-one getting mortgages. The question of who is at fault is all a bit chicken and egg; them for lending too much or us for borrowing too much.
I agree BOL, ok the banks threw money at us, but we didn't have to accept it. I was just greedy and wanted everything then and there without a thought to the consequences.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
My understanding though is that if there is NO equity then there is no money to release and that IVA would finish at 60 months. If there IS equity but can't be released thats when the extra year is added on.
You might find they ask for 72 months at the outset anyway. Some creditors are doing that now.
With mine there has to be less than £5k equity for it to finish at 60 months. Unless house prices totally collapse then we will always have more than that, especially as we are on a repayment mortgage so the capital owed is always going down.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Have a look at 'willowstar29' post re '6 years because we can't remortgage'.
This just goes to show that it is now custom and practice to add on an extra 12 payments irrespective of the circumstances.
To make matters worse 'willowstar29' is with one of the biggest and most respected companies, if they are allowing this to happen what chance have the rest of us got.
IVA COMPLETED ON THE 17th MARCH, FINAL I&E COMPLETED 26th APRIL, COMPLETION CERTIFICATE ARRIVED 2nd AUGUST
I'm not sure. I know we were told how much equity we had to try and release and if we couldn't then it would continue for the further twelve months.
This was from the outset.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
When I first took out my IVA there was no mention of an extra 12 payments, I wasn't even aware that creditors could do this, I thought it was 60 months and a 4th year equity release, end of!!.
Now it seems to be readilly accepted that an extra 12 payments is the norm and we should just roll over and let it happen, even if this clause isn't written into the arrangement.
The way things are going we will soon have 72 month IVA's as standard with equity release clauses, then I guess if you cant remortgage the term will go up to 84 months.
It seems IVA's are rapidly turning into high cost DMP's, or am I just being cynical??
IVA COMPLETED ON THE 17th MARCH, FINAL I&E COMPLETED 26th APRIL, COMPLETION CERTIFICATE ARRIVED 2nd AUGUST
I've been reading this thread with great interest. I too am a homeowner and when I first took out my IVA, around six months ago, there was little equity in my property. At the time of arranging the IVA, my IP advised me that because there is very little equity we could presume no equity would have to be released in year 5 and therefore the IVA would run for 60 months, not 72.
So yesterday I re-read the proposal and yes, it does state equity to be released in year five. So really what is going on here?
I am wondering about selling the house and going back to renting, especially as my fixed rate is ending soon and I've just learnt that I cant keep any of the money I am saving, as my IP has advised that I should arrange a new fixed rate, for five years.
Who knows what is going to happen in five years. I know one thing, you will have made five years of mortgage repayments. That 'should' free something up.
You would really rather sell up than try to re-mortgage?
If so, you need to read your IVA agreement as there may be a caution against your property.
Last edited by Imhotep on Wed Oct 27, 2010 4:46 pm, edited 1 time in total.
northumbrian69 wrote:
When I first took out my IVA there was no mention of an extra 12 payments, I wasn't even aware that creditors could do this, I thought it was 60 months and a 4th year equity release, end of!!.
Now it seems to be readilly accepted that an extra 12 payments is the norm and we should just roll over and let it happen, even if this clause isn't written into the arrangement.
The way things are going we will soon have 72 month IVA's as standard with equity release clauses, then I guess if you cant remortgage the term will go up to 84 months.
It seems IVA's are rapidly turning into high cost DMP's, or am I just being cynical??
When you consider the options an additional 12 payments sounds pretty painless to me. I'd much rather that than higher mortgage repayments for the remainder of the mortgage, around 12 years in my case.
I must be honest, I wasnt aware that there were any conditions if selling the house. I think I will need to re-read the proposal.
In reality I dont think I would ever sell the house, as the IVA route was the route we decided to take instead of anything else as we wanted to keep the house.
I guess I am feeling like a number of homeowners in the fact we seem to get penalised by having to extend the IVA for a further 12 months because we own our houses.
