is this how it usually works?

[andyg]

can someone explain if you owe 50000 and agree an iva for 70p in the pound over 5 years i would pay about 570 amonth. that would pay back 35000.if i have 30000 equity in my house is it usual to have to remortgage it in year 4 or 5. and pay back the outstanding 15000. is this how it usually works.

[Adam Davies]

Hi
Your payment of £570 per month will be £34200,however you have to allow IP fees of about 8k,so you will be repaying about 26k to your creditors[52%].You will have to remortgage in year 4 for a maximum of 85% of your equity share[should be no more than 60% of your disposible income].
The maximum that you can pay into our IVA is your original debt,plus IP fees and possibly statutory interest.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[kpw]

HI
Debt level of £50,000 with a return of 70p to creditors would go something like this;

£570 x 60 = 34,200
less 8,000(approx IP fees)
------
26,200 to creditors from monthly contriutions

26,200 divided by 50,000(debt level)

=52.4p dividend

You would need to find remaining shortfall through 4th year equity release;

70 - 52.4 =17.6

17.6 x 50,000 = £8,800

Total into fund (excluding IP fees) would be
8,800
+26,200
------
35,000


therefore 35,000 to creditors

35,000 divided by 50,000

= 70p dividend

Thats roughly how it works but it is the minimum dividend and may be subject to the creditors asking for more if possible.