I had my house valued yesterday as the final part of paperwork needing to be sent to my IP.
What a shock. I was expecting it to be about £240000 in this economic downturn. It was valued at £209000. My mortgage is for £196000 with early redemption penalties of £9000 just about putting me in negative equity, and have debts totalling £87000.
Would my IVA have been more likely to succeed with some equity or not? I'm getting very worried now.
This is certainly, given the current property market, a situation that I am sure your IP is well used to seeing at the moment. I doubt it will make too much difference at all, but best to speak to your provider directly to put your mind at rest.
Good luck and regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
Your IVA should not rely upon the release of equity, and if you have sufficient disposable income to fund a reasonable arrangement then the fact that you have no equity works to your advantage.
As you will be required to look at raising equity during the final year, it is the valuation at that time which is important, not the valuation now, and house prices are bound to increase in the five year period.
As Andy says this should improve your chances of having the IVA accepted. If creditors reject your proposal and you petitioned for bankruptcy, you would be able to buy your interest in the property for a nominal amount. Even if there were to be an Income Payments Order the return to creditors would almost certainly be zero.
However, if creditors accept your proposal they can benefit from any recovery in the housing market by way of an equity release in the fourth year in addition to what is being paid to them from your voluntary contributions.
Andy, It looks like about £300 or 20p in the pound over 6 years.From what I've been reading on this site I haven't seen any other IVA'S over six years but that's what my IP wants to propose. Is this that unusual?
Hi Stirling - I had a similar fright last week too when our house was valued for the IVA application. We only bought it last year and the value has dropped nearly 15k which leaves us with about as much equity as you - very scary and depressing. I too paniced that it would affect the IVA too and hurriedly spoke to Angela at MG who put my mind at rest - and like Melanie says house prices are bound to go up again in the next 5 years. I have heard about 6 year IVAs before and I wouldnt be surprised if that's what we end up doing - but early days for me to make any guesses like that. Anyway hon you are not alone in your panics! Good luck! xx
Still gathering info....but hope to be on the right path pronto!!
I'm so glad I have just read this post! The estate agent is coming round tomorrow to value my home for the IP. We only moved here 8 months ago, so I'm expecting a real big drop in price. We sold our other home to pay off a 62k secured loan to Barclaycard, thank God that we did. Otherwise it would have been BR, not hopefully an iva. I was worried that little equity would be bad, but I can now see how it strengthens our chances.
There are several posters on here with 6 year IVA's. Ours will run for 6 years if we can't remortgage in Year 4.
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
The IVA proposal we had drawn up was for 6 years, not sure why, the company just told us that it had to be over 6 years, but we did not go down the IVA route in the end
