I have about 20k equity in my house at the moment

[vxxx44]

I have about 20k equity in my house at the moment but total debts of around 26k . Are there any circumstances when I would have to release that equity to pay the iva .

[Fox84]

Hi,

I believe that any equity would need to be released in the 4th year of an IVA but as your equity is very close to your overall debt i would have thought that a remortgage would possibly be a better answer, hopefully an expert will be on to confirm or help further.

[MelanieGiles]

A remortgage will be difficult, given the levels of unsecured debt you are carrying, and if you propose an IVA, depending upon the level of your disposable income, creditors may well feel that you are not really insolvent or a suitable candidate for an IVA - on the basis that if your property were to be sold you could probably pay all of your creditors in full.

If an IVA were to be acceptable, you would most certainly be required to raise equity during the final year of the IVA, subject to a maximum borrowing of 85% loan to value and affordability based upon 50% of your then disposable income.

A chat with an insolvency professional would be able to explain the ramifications of this in greater detail, along with other options you may feel are more worthy of consideration such as debt management.

[Adam Davies]

Hi
Do you have 100% share of the equity or is it split with your spouse/partner ?
Regards

[james.c]

if i were in your situation, sell the house, pay of 20k of debts, then only 6k to deal with, more quicker than anything, then you can save up and start again

[kallis3]

That's provided it sells - nothing is moving round by me at the moment - not even houses to let.

[Viki.W]

That's right Jan, same round here. Also don't forget legal fees, moving expenses and the cost of a new home will need to be deducted.

[james.c]

yes, good point my girlfriend as had her house up forsale since march, since then she dropped it 20k on the price and not even 1 viewing

[liberta]

I agree, it is very difficult to sell a property at the moment. It is all very well saying that there is £20k equity in a property but if the property cannot be sold then that equity is not realisable.

Melanie's point about the requirement to re-mortgage in the final year of the IVA is correct but again it would depend on vxxx44 being able to find a mortgage company to agree to lend the money. If no re-mortgage could be found then under the protocol it would be possible to extend the term of the IVA by a further 12 months to compensate the creditors for the retained equity in the property.