Retirement lump sum

[formidablelady]

Hi
I will have finished 4 years in my IVA in June this year. As far as I can remember the terms were 5 years initial with a sixth if no equity is released from our property. Mortgage has about 9 years left and there is around £150000 of equity. I have been very unwell with depression over the last couple of years and ideally I need to retire. I am 53 and can draw my NHS pension at 55 normally. I could just voluntarily retire before then with a reduced pension. My lump sum will be around £40000. My IVA payments are £310 a month. If I retire now will they take all of the £40000 or what I have left of payments approx £7500. I can’t remember my original debt and can’t face paperwork as it’s a mess. Will have to work up to looking at it. I guess it was about £30-40,000. I am desperate to retire, someone mentioned a loan for full and final by a firm that posts on here. Stuart something. Any advice gratefully received ...Mandy.

[Lisa Thomas]

If you have 2 years left (including the years extension) at £310 per month you have c£7.5k left to pay.

This is what your offer should be based on.

£5k might do it at a push but the more attractive the offer, the more likely it is to be accepted.

[formidablelady]

Thanks Lisa. Do you know anything about the lump sum. If I retire today for example would they take the full amount off me?

[Foggy]

If you just up and retire they will go for the lot. What you need to do is OFFER to retire so that you can give them the lump sum Lisa mentions. if they refuse the offer you refuse to retire (do not give them an inkling of your need or wish to retire asap --- you are doing it to help them).

[formidablelady]

So if I offer to retire how much will they take £40000 or the £7500 left in payments to IVA?

[Foggy]

So if I offer to retire how much will they take £40000 or the £7500 left in payments to IVA?

It is your offer to make ---- you offer, say, £6000 to end the arrangement. They say yes, you give them the £6k. They say no, you do not retire.

[Lisa Thomas]

You make an offer and if the variation is accepted then you retire and pay over the full and final lump sum figure that was accepted.

If you don't get a variation in place first and retire you could lose all of the lump sum...!

My short video on F&Fs is here:

https://youtu.be/h4dozq9aGak

[formidablelady]

Thanks Lisa and Foggy. I am also a bit worried about the equity of £150000 in the property. I am not sure if we could remortgage and even if we could as I plan to retire I will be on a much reduced income. When they ask you to release equity is it for the original sum you owed e.g. £30000 or for IVA payments you owe for last 12 months so in my case around £3600. To complicate matters my husband is also in an IVA but they are separate. I have tried to Google it but can’t understand wether remortgage is for original sum owed.

[Foggy]

Thanks Lisa and Foggy. I am also a bit worried about the equity of £150000 in the property. I am not sure if we could remortgage and even if we could as I plan to retire I will be on a much reduced income. When they ask you to release equity is it for the original sum you owed e.g. £30000 or for IVA payments you owe for last 12 months so in my case around £3600. To complicate matters my husband is also in an IVA but they are separate. I have tried to Google it but can’t understand wether remortgage is for original sum owed.

The amount of remortgage is limited by several "glass ceilings": The amount cannot bring your borrowings over 85% of the value of the house, it cannot increase your mortgage payment by more than half the IVA payment amount and it cannot extend the term of the original mortgage --- this is all assuming you have the usual clauses. Up to those ceilings they would be after as much as the whole amount of equity to cover the full original debt, plus fees and possible statutory interest.

[formidablelady]

Thanks Lisa and Foggy. I am also a bit worried about the equity of £150000 in the property. I am not sure if we could remortgage and even if we could as I plan to retire I will be on a much reduced income. When they ask you to release equity is it for the original sum you owed e.g. £30000 or for IVA payments you owe for last 12 months so in my case around £3600. To complicate matters my husband is also in an IVA but they are separate. I have tried to Google it but can’t understand wether remortgage is for original sum owed.

The amount of remortgage is limited by several "glass ceilings": The amount cannot bring your borrowings over 85% of the value of the house, it cannot increase your mortgage payment by more than half the IVA payment amount and it cannot extend the term of the original mortgage --- this is all assuming you have the usual clauses. Up to those ceilings they would be after as much as the whole amount of equity to cover the full original debt, plus fees and possible statutory interest.

As my IVA payment is £310 a month and the term remaining would be about 7 years, 7 x £155 is around £13000. What I don’t understand is say I get to the end of year 5 and offer a f&f payment of £3720 (the amount of the last 12 months payments) Will they expect this plus my extended mortgage of £155. I have also heard that some IVAs lasting 84 months.

I should probably wait and see what happens but it’s hard not to be anxious.

[Foggy]

Thanks Lisa and Foggy. I am also a bit worried about the equity of £150000 in the property. I am not sure if we could remortgage and even if we could as I plan to retire I will be on a much reduced income. When they ask you to release equity is it for the original sum you owed e.g. £30000 or for IVA payments you owe for last 12 months so in my case around £3600. To complicate matters my husband is also in an IVA but they are separate. I have tried to Google it but can’t understand wether remortgage is for original sum owed.

The amount of remortgage is limited by several "glass ceilings": The amount cannot bring your borrowings over 85% of the value of the house, it cannot increase your mortgage payment by more than half the IVA payment amount and it cannot extend the term of the original mortgage --- this is all assuming you have the usual clauses. Up to those ceilings they would be after as much as the whole amount of equity to cover the full original debt, plus fees and possible statutory interest.

As my IVA payment is £310 a month and the term remaining would be about 7 years, 7 x £155 is around £13000. What I don’t understand is say I get to the end of year 5 and offer a f&f payment of £3720 (the amount of the last 12 months payments) Will they expect this plus my extended mortgage of £155. I have also heard that some IVAs lasting 84 months.

I should probably wait and see what happens but it’s hard not to be anxious.

If you get the extension that will be their only bite at the equity cherry. The 12 months are at the same rate as your current payment levels. Be warned, though, that the nearer the end you get the less attractive it is to creditors to accept, especially considering that the offer will take a few months to go through and cost them more in fees.

[Lisa Thomas]

As my IVA payment is £310 a month and the term remaining would be about 7 years, 7 x £155 is around £13000. What I don’t understand is say I get to the end of year 5 and offer a f&f payment of £3720 (the amount of the last 12 months payments) Will they expect this plus my extended mortgage of £155. I have also heard that some IVAs lasting 84 months.

I should probably wait and see what happens but it’s hard not to be anxious.

Do you mean the remaining mortgage term is 7 years at 155?

Originally you said you had a year left of the IVA at £310 per month (plus an extra year for the extension). The IVA contributions in the 12 month extension period will be the same as you pay now (i.e £310), as long as there are no material changes in your I&E.

Your IVA is due to last for 6 years plus closure period (up to 6 months depending on your terms) if you continue to term satisfactorily (without an F&F).

[formidablelady]

Do you mean the remaining mortgage term is 7 years at 155?

Originally you said you had a year left of the IVA at £310 per month (plus an extra year for the extension). The IVA contributions in the 12 month extension period will be the same as you pay now (i.e £310), as long as there are no material changes in your I&E.

Your IVA is due to last for 6 years plus closure period (up to 6 months depending on your terms) if you continue to term satisfactorily (without an F&F).

I was trying to work out what foggy said that your increased mortgage payment if you could get one couldn’t be more than half your IVA payment and couldn’t last longer than the rest of your mortgage term so half my IVA payment is £155 times approx 84 months which is remaining mortgage term.

Yes in June I will have done 4 years so going into my 5th year. I won’t be in a position to offer a f&f until around December so would still have 18 months (with extension) I did not know about 6 months closure. Do you still pay monthly then?

If my f&f in December at around the 4 and a half year mark is accepted will they still chase house equity. Or once they have accepted full and final is that it my house equity and pension lump sum are safe. Obviously having to retire at 53/54 is early and hopefully I will live another 30 years or so, so I am trying to keep it if I can. Also have not been able to buy any major things for the last few years so need new boiler etc etc.

[Lisa Thomas]

[quote="

Do you mean the remaining mortgage term is 7 years at 155?

Originally you said you had a year left of the IVA at £310 per month (plus an extra year for the extension). The IVA contributions in the 12 month extension period will be the same as you pay now (i.e £310), as long as there are no material changes in your I&E.

Your IVA is due to last for 6 years plus closure period (up to 6 months depending on your terms) if you continue to term satisfactorily (without an F&F).

I was trying to work out what foggy said that your increased mortgage payment if you could get one couldn’t be more than half your IVA payment and couldn’t last longer than the rest of your mortgage term so half my IVA payment is £155 times approx 84 months which is remaining mortgage term.

That applies if you are getting a secured loan.

Yes in June I will have done 4 years so going into my 5th year. I won’t be in a position to offer a f&f until around December so would still have 18 months (with extension) I did not know about 6 months closure. Do you still pay monthly then?

The 6 months is purely the admin period for the IP to close your IVA - you do not pay contributions in that period - sorry if I have confused you.

If my f&f in December at around the 4 and a half year mark is accepted will they still chase house equity. Or once they have accepted full and final is that it my house equity and pension lump sum are safe. Obviously having to retire at 53/54 is early and hopefully I will live another 30 years or so, so I am trying to keep it if I can. Also have not been able to buy any major things for the last few years so need new boiler etc etc.[/quote]