F&F Advice / Pension

[nervousperson]

Exactly...I was thinking it could be treated like an asset with cash value...although *I* can't access it, I could sign it over to the creditors and they could appropriate the funds...obviously a non-starter...

[plasticdaft]

Talk to your IP,most cases just now are struggling on the equity release front and you may find an extension in payments is preferable anyway to either messing up your pension plan or remortgaging(which would cost you more in the long run).

Good luck and let us know how you get on.

Paul

ps by 66% do you mean 66p/£ or 66% of the equity in the house must be realised. You will most likely find that no-one wants to go down the BR route so dont panic about it,but do speak to your "factory" IP!!!

[nervousperson]

66p/£

[plasticdaft]

Does your paperwork say what happens if you cannot release equity?? Does it mention an extension to the agreement?

Paul

[nervousperson]

There's a number of independent clauses

Clause 1 states that a minimum dividend of 66p/£ must be achieved. If not, the supervisor must petition for bankruptcy

Clause 2 states that if I cannot obtain a remortgage, the arrangement may be externed by 12 months in order to allow contributions in lieu of equity. Should I fail to "introduce funds in respect of equity" this will constitue a breach and a meeting of creditors must be convened to agree a course of action.

It's the first clause that's got me worried - in that, even should I pay an extra 12 months, I can still be forced into bankruptcy as I won't reach 66p/£

[nervousperson]

Equity release originally expected is approx £50k, far more than the sum of my monthly payments. At current market values, and 85% mortgage, I estimate there's may be 10k that can be released...leaving a £40k shortfall to hit the 66p/£ mark...

[MelanieGiles]

Minimum dividend clauses are very dangerous as they can be difficult to achieve. The only creditor who now insist on these are HMRC, and in my opinion this will just give rise to a lot of variations where they are an influencing creditor.

[nervousperson]

HMRC are not a creditor...guess I should be talking to my IP about the possibility of a variation to remove that clause?

[MelanieGiles]

If this was set on an expectation of you releasing equity from your property, then a variation may be sensible - but only when you have some firm offer to make to creditors as an alternative.

[plasticdaft]

Surely the chances of releasing equity are slim these days and without the 50k equity release a 66p/£ dividend is going to be missed by a country mile. Definately time for a long chat with your IP about likely outcomes.

Paul

[plasticdaft]

Meant to ask how far into your IVA are you and what firm have you used?

Paul

[nervousperson]

Just over 3 years. Not talked to the IP about it yet so don't feel it's right to give any names out.

[nervousperson]

If this was set on an expectation of you releasing equity from your property, then a variation may be sensible - but only when you have some firm offer to make to creditors as an alternative.

Melanie,

What sort of firm offer? There's already clauses about remortgage to 85% LTV in Year 4 etc so, IMHO, the final value clause is redundant other than to put me through 5/6 years of payments then make me bankrupt anyhow.

[plasticdaft]

I dont see that theres an offer to make other than offering to extend the IVA. If you cannot get at the equity then you cannot get at the equity.

Given whats happened recession wise and the fact that you are unlikely to be able to get to any equity never mind enough to return 66p in the pound I wouldnt want to think an IP would enjoy reaping the rewards of 5 or 6 years worth of fees to then make you BR!!!

You must talk to your IP soonest about this minimum 66p/£ clause and get in writing what will happen if its not achieved. How much are you paying into the IVA a month??

Paul

[nervousperson]

£700+ ... so a fair whack...