Hi everyone,
I have just completed my 60th monthly payment and, in accordance with the equity release clause in my agreement, have been seeking (unsuccessfully) to get a remortgage in order to make the required release of equity. (c £15k)
My agreement makes no mention of of extending my payments for an additional 12months and, as things stand, I have not reached the agreed minimum dividend.
I have also been searching desperately to see whether I can get a secured loan for the required amount and, whilst I have found somebody, through a broker, who is willing to lend me the money, the APR of 20.5%, the broker fee (£2500) and the administration fee (£1000) do not make the loan particularly attractive.
12months more payments will still not make the required dividend.
What can I do?
First -- speak to your IP As I understand it, the 12 months extension is not designed to make up the sum of "unrealisable" equity, so a shortfall should not be an unresolvable issue.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
As your IVA is the older variety, I am not suprised there is no provision for you to extend the term to deal with the equity. If you have a minimum dividend criteria to meet, then your IP will have to call a variation meeting to allow creditors to consider a revised offer - which could include an extension for a further 12 months payments in line with the current IVA protocol.
Just to clarify some standard wording around IVA's and completion of them - "Once you have met all the terms of your IVA including making all necessary monthly payments (normally over 5 years) and releasing any equity from your property as required, you will then have settled your debt in full. Any outstanding debt will be written off under the law and you will be left debt free".
My question is when the IVA is setup, am I correct in saying the debtors will agree on a minimum recovery of that debt (say 60%) - i.e they have agreed from the start to write off 40% ?
If over the 5 yrs you have only managed to pay back say 40% of the debt, there might be a clause for equity release to come up with the remaining 20% of that now agreed 60% of debt ?
Or before the quity release they might offer another 12 months on the IVA and that's it or another 12 months AND equity release ?
Sorry if I have confused anyone !
Hi - I am a bit confused by the questions so I'll do my best. The estimated dividend (say 60p/£ or in your words 60%) is what the creditors agree at the start of the iva. You will always owe the full amount of your debts plus the ip fees now until the end of the iva. This means you may end up repaying more than was proposed - overtime, bonuses, windfall etc all help improve the dividend. It is all based on what is affordable so 60p/£ is not set in stone, its just an estimate. Remortgaging or 12 months in lieu of equity is only dependent on whether you have any equity in yur property to release...it is not about making up a shortfall in the amount repaid through monthly payments. Now, while most ivas are based on an estimated dividend a few have a required minimum dividend - where there is a requirement to meet a certain dividend, ivas can either be extended to allow the debtor to fulfil the terms of their proposal or the ip can call a creditors meeting to ask them to accept a lower dividend. Gosh - what an essay! I hope this hasn't made things worse. I always find it difficult explaining ivas because there are so many variables!
As rightly said, it is individual so what may be right for one isn't necessarily right for another. We don't have a minimum dividend but I do know of posters who have.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
BOL,
Thanks for taking the time to explain.
One final Q then. If I owe the amount of debt right to the end and I have managed to pay off say 40% of my original total debt, then come the time of completing the IVA, I assume the only thing I might liable for is the remaining 60% of what is owed to debtors (obvisouly less the IP fees).......what I mean is the 40% I have paid to date is wiped off the total debt owed.
Once you reach the end then anything remaining after your creditors have received their dividend is written off and you are totally debt free.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Jan,
Thank you and sorry for my constant stupid Q's (all of you), but as you can imagine, this is a worrying time and this forum, whilst at the beginning of this journey for me, I am sure is going to be invaluable.
Thanks again.
That's right. Once you have made your 60 payments, paid in any other monies due (windfalls etc) and dealt with any equity (remortgage or an additional 12 months) the remaining debt and IP fees will be written off. IP fees are not deducted from your debt - they are in addition. For example, my debt was approx £26000. Over the five years I will repay about £25800. Because fees are in addition to the debt, I will achieve a dividend of approx 70p/£ Fees are mostly a moot point but when people have a high dividend it is possible they will start to repay ip fees themselves so it is important to know. In my case any windfalls, payrise or bonus payments will be paying the fees and this means the creditors don't have to so they get a better return.
As I understand it, the 12 months extension is not designed to make up the sum of "unrealisable" equity, so a shortfall should not be an unresolvable issue.
