paying any shorfall from colateral

[karen.m]

Hi there,
Just looking at the clause where you own a property and are expected in the 4th year to pay any shorfall from colateral in your poerty. Is this amount based on what the IVA started at? or based on the original debt that there was. i.e. of a debt of £120,000 it says this could reduce to £40,000. Would the colateral be taken based on the £40k or £120K - many thanks! Karen

[MelanieGiles]

Hi Karen and welcome to the forum

It will depend upon the terms of your specific IVA - so if you are in one now do read the proposals carefully. If you are not in an IVA yet, but contemplating proposing one, then the property will be revalued during the final year and this will form the basis of any equity release.

I don't really understand your post, so could you be more precise about your query plaease. And if you have sufficient equity to pay creditors in full, then this is what you will be required to do.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Karen
You would be asked to remortgage your property in year four and release your equity.You are generally able to remortgage upto 85% of your property value and your new mortgage payments would increase no more than 60% of your disposible income[IVA payments].
The maximum that you could have to raise will be equivelent to your original debt,plus IP fees less payments made each month,but this will be subject to the above LTV and 60% clause.
Once you have remortgaged your IVA will conclude or carry on for the remainder of the five year term at a reduced level[original IVA payment less cost of extra mortgage payments]
Make sure that if you enter into an IVA you fully understand the equity release.

Andy Davie
IVA.co.uk Spokesperson and Website Manager

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

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