paying off my IVA

[jones.d]

I have an IVA and I am currently with my husband paying £379 per month and have been making these payments for about a year and a half. We have in the mean time got a mortgage on our home. I am wondering if I would be able to raise the money on the mortgage to pay off the IVA. I am not sure how to go about this though. My mortgage is for around £63000 the property is worth around £85000. Do you think I would be able to raise enough money to pay off the IVA? Do you know how I work out how much money I need to pay off the IVA? Any information would be greatly appreciated. Thanks

[MelanieGiles]

Hi jonesd and welcome to the forum

I assume that you already had the mortgage on the property when you entered into your IVA? Please confirm, and what provisions there are in your IVA for releasing equity (if any) at the end of the arrangement.

A client of mine recently got a 95% loan to value offer whilst in an IVA, so it might be worth speaking to a mortgage broker to see what could be raised.

We can only tell you whether you offer is viable, if you tell us how much you owe to creditors and what dividend was originally offered. Glad to help if you can give more information.

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

[jones.d]

Hi thanks for the reply. In answer to your question, my husband and I did NOT have the mortgage when we entered into the IVA. We were renting the house from our local authority. We then obtained a mortgage, using a financial advisor after we had had the IVA for about a year.

I am looking at the figures and will post them once I have them.

Does it make any difference that we got the mortgage after the IVA. There was no agreement with the supervisor about the house, s we did not own it then.

thanks again

[MelanieGiles]

Hi there - this raising an interesting issue in that this property is after acquired and could be treated as a windfall if it has now generated equity. I also assume that you are out of the three year claw-back which the Council will have stipulated.

Best thing to do is to contact your IP to see what his view is. Whilst I believe that the acquisition of the property is technically a windfall (Catallus - what think you???), I also feel that if offered a sensible deal creditors will take the money and run. To guarantee success, I would be trying to tempt them with a higher offer than your original dividend provided, and hope for the best.

The reality is, most of your claims have probably now been sold on, and the debt purchasers are likely to accept any commercial settlement available within reason.

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

[catullus]

Technically I think that it could only be regarded as a windfall if it was sold and a gain was realised during the course of the IVA.

If the property was remortgaged during the IVA I think that the defence to a claim that it was a windfall was that jones.d was no better off. OK, we've got the extra cash but we've also got the extra debt so how have we been enriched during the IVA?

I'm not sure creditors would be amused by such a technical argument but I suspect that it is correct.It will be interesting to see how the supervisor sees it.

[MelanieGiles]

Mmmmmm - Not so sure on that one. If you follow the same rules as S307 - which certain creditor representatives are seeking to modify into IVA proposals - then I feel that technically it would be caught, but then if the option of re-mortgaging is going to be taken up in any case to produce money - perhaps the argument is that the windfall is actually being addressed - albeit creditors may technically be worse off due to the higher mortgage payments causing reduced or no disposable income.

If faced with this from our own clients, I am sure that notwithstanding technical arguments - which probably only amuse the likes of us! - we would put if forward on grounds of money in the hand is better than money being drip fed.

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

[catullus]

We're allowed a techie argument occasionally!!

Granted, if a s307 type clause was in the proposal then my argument wouldn't fly, but it's quite rare I think.

If not, then it would give the Supervisor a stronger argument that a F&F remortgage settlement was a good offer, if he /she was prepared to run the argument, but I might be concerned how the creditors would react.

Bottom line for you jones.d is ask your supervisor and let us know what they say.