If this was the case then an IVA would not be suitable for me and i would not proceed (opting either for a DMP or Bankruptcy). I am assured that my IVA proposal will stipulate that in the event that i cannot obtain an equity release in the 4/5th year then i will continue to pay for an additional year. I assume that as long as this is the case it cannot be changed/challenged at a later date so long as i make all payments on time. Retaining my home is the main driver for me if this is not to be then why would I consider an IVA in the first place?
Agreed - I simply don't see why you should commit to paying an additional year up front, when a lot of circumstances could change over that period. I prefer my clients to tackle issues as and when they arise, and not commit to something which is unecessary from the outset. In either soluton your property is protected from sale, assuming that creditors agree to the proposals of course.
I guess what I am after is closure or being able to see the light at the end of the tunnel. A DMP would take me 10-12 years to repay so an IVA is obviously more appealing. I would also be happy to increase payments when possible, handover any windfalls and release equity if I am able. Adding the 6th year may not be the best solution and I appreciate your comments Melanie but I like the security of knowing what will happen in the event that I cannot release equity.
On another note I had a letter today from Halifax retail bank collections regarding my first missed payment (I have received many silent calls from the Halifax over the past week) so I called them on the number provided. I can't believe how professional they were! I explained my situation, they confirmed receipt of my letters, updated their records and asked me to call back when I knew who my IP was. They did not attempt to request more money or threaten me in any way in fact they stated that their calls will be put on hold for a while.
It does not matter what the proposal says if creditors modify it at the meeting. If there is a requirement to call a variation meeting should the equity not be realised there is a danger that creditors will seek a sale at this time. While this is not the current attitude of the majority of creditors and their agents there is no guarantee that this will remain the same.
A lot depends on who the creditors are and what the modifications are but the property is potentially at risk when a variation has to be called. To suggest otherwise is not completely true.
I understand your point of view Michael and thank you for your response. I assume that if such a modification was proposed (sale of house) or a variation then i would sill retain the right of not proceeding with the IVA.
Well if that's the case what really is the point of trying to do the best thing and pay back as much as you can only to have your home pulled out from under you feet and your world come crashing down again.
If there is sufficient equity in a property and it cannot be raised due to credit rating or lack of suitable mortgage products and creditors ask for it to be sold, you are basically stuffed and would have to go into rented accommodation.
I know it's all hypothetical but one may as well have gone bankrupt in the first place or could this be the creditors 'ace up the sleeve'.
I know what you are saying about certainty Mark and this topic for me has blown that out of the water a bit.
7 year IVA completed in December 2016 - there is light at the end of that tunnel
Absolutely Mark. I am not trying to scare you but to point out what you should be told. Some creditors do put the twelve month extension modification into the proposal and this is included in protocal IVAs. However, other creditors state that if the equity is not able to be reached it is to constitute a breach and another meeting of creditors is to be held to ascertain the way forward.
Ask your IP how your particular creditors normally vote and they should be able to tell you. Hopefully you are not self employed because if you are it is highly unlikely that you could propose a protocol IVA anyway and looking for IP firms who use protocol only would be a total waste of time.
Yes Cath. If your IVA was approved as a protocol IVA and there were no modifications then the proposal would not need varied after month 54. There would be twelve extra payments at the most and the IVA would then cease.
However, if creditors have requested a meeting to be called in the event of the equity not being raised there is a danger they could demand a sale at this point. You could have paid for 5 or even 6 years and still be obliged to sell your house.
Current mainstream creditor attitude would not mean the loss of your property but debt purchasers and new management in existing creditor companies may mean a switch in viewpoint in the future. Clients need to be made aware of this and not given rash promises that may not be kept.
Thanks, I get it now and have just re-read my proposal for clarity. So if the proposal were accepted without modification and the debt was then sold, the new owner of the debt would have to abide by the original proposal?
7 year IVA completed in December 2016 - there is light at the end of that tunnel
Good luck with your proposal Mark. I rarely, if ever, see creditors wanting properties sold as a specific requirement of the IVA (dwelling houses not investment properties though) - and do remember that you will only enter a sixth year if you have demonstrable equity after leaving 15% of the equity to you and subject to a deminimus limit of £5,000 of which I am sure you have been made aware.
