If you have no equity in your house

[denise.w]

If you have no equity in your house do you have to make payments for more than five years? Can creditors make you remortgage during the IVA as your house has increased in value? If so do you agree an amount that needs to be raised?

[Adam Davies]

Hi
It will depend on your creditors.It is likely that they will want an equity release in the final year of your IVA[presuming house prices increase],however your IP could suggest an extension to your IVA instead of the equity clause and at present the figure to be made available will not be known until the fourth year[usually]
sorry it,s a bit of a wooly answer but thats the nature of equity releases in IVAs at present.
regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[louiseh]

My proposal includes an extra 6 months payments at the end to cover the equity release, no equity in property at the moment. Hasn't been accepted yet so I'll have to wait and see. If the property does go up in value, that great as no equity release is required in the IVA, but if property goes down in value, then I assume I'm paying an extra 6 months for nothing! Will have to wait and see.

[MelanieGiles]

Current recommendations, are that equity should be released during the final year of an IVA, to enhance the return available for creditors - and based upon affordability and loan to value ratios, but leaving at least 15% equity within the property - and subject to a deminimis level of £5,000.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[RedDevil]

Hi Melanie,

Not meaning to sound ignorant but please clarify deminimis level? Do you mean minimum level?

Thanks RedDevil [?]

[MelanieGiles]

Yes - this is correct.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk