How is the equity calculated

[coco]

Hi,

I seriouly considering the BR route as i am finding hard to maintain the IVA payments,

Mortgage 72500
Redemption charge £3500 approx
Valuation £84000

If i was to go BR would the OR force a sale

Thanks



51 payments to go
(I apologise for my keyboards poor spelling and grammar)

[MelanieGiles]

Hi coco - so sorry to hear that your IVA is failing.

Is your property in joint names or just yours. I will assume just yours. The calculation of equity is based upon the house value, less the mortgage and redemptions charges. Therefore in your case £8,000. I would argue that there are notional costs of sale of £3,000, so find someone to offer £5,000 to acquire your interest. If the property is jointly owned, then you have halve that figure

On the basis of those figures, I do not believe a trustee would be successful in obtaining a possession order, but they could wait for three years to see if the property went up in value, or put a charge over it until it does increase. My best advice is to to a deal to release the equity as early as you can, and get it over and done with.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[coco]

Hi Melanie,

The house is in my name only but the IVA is joint, if i was to sell the equity (£5000)say to a family member or get a family member to pay the equity to the OR would this enable us to keep our home

51 payments to go
(I apologise for my keyboards poor spelling and grammar)
http://coco.blogs.iva.co.uk

[MelanieGiles]

Absolutley - and bargain as hard as you can with the OR Coco, because none of that money will go to your creditors it will be lost in govenment levies and OR costs!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk