I am in month 38 of my VA (in the 4th year). a modification was made to my VA which basically states that in the 4th year of the arrangement, the debtor must obtain 2 offers of remortgage on the property, at the same time as a mortgage redemtion figure. Which ever offer gives the greater amount of equity, the debtor must immediately pay in the amount. Monthly contributions may then cease in order to accomadate the increase in mortgage payments. The IVA can then be finalised. My question is am I bound by getting a remorgage or can I pay in third party funds so as not to go down the remortage route that would almost certainly involve costs.
The answer to this question will very much depend on your proposal. If your proposal has been prepared to the IVA protocol conditions, the remortgage clause should only be applicable if you are able to meet the criteria, i.e. you may not be offered a remortgage, you may not be able to manage the repayments of the remortgage, or the amount realisable for creditors may fall below the prescribed amount after fee's. In this scenario, your creditors would be able to request an extention to the arrangement of up to 12 months in lieu of the equity.
If you are applicable and able to obtain a remortgage, it is unlikely that your creditors would force this issue if 3rd party funds equal to the offered remortgage amount would be rejected by the creditors in lieu of the remotgage. As long as your creditors receive a payment that they feel you are able to obtain, they really couldn't care less where the money comes from!
Really, you need to read the property and home equity section of your proposal to see under what conditions you will be expected to remortgage. If it appears likely you will meet these conditions, your IP will be able to roughly calculate what kind of mortgage offers your are likely to get, and therefore will be able to advise you on the amount of equity your creditors expect to receive. From this, you should be able to liase with the third party and you IP to come up with an attractive alternative to your creditors. Once this has been decided, your IP will be able to approach your creditors.
Worst case scenario is they say no (very unlikely) in which case you have lost nothing by putting in the offer!
This IVA could not have possibly been presented using the IVA protocol, which has only been around since February 2008!
In answer to your question - if you have third party funds available to the extent that you would be required to re-mortgage, then this will be more than acceptable to your creditors.
IPs are not qualified to give mortgage or investment advice - and therefore should refrain from doing so. You should now consult a properly qualified IFA to see if re-mortgaging is a possibility.
