Sale of property and equity!!

[slt]

Hi there

My property is on the market and I have a clause added into my IVA that in the 4th year I will remortgage and give a lump sum. BUT....I cannot get hold of my IP to ask if this is all there is as I called a general helpline and the lady said under no circs will I be able to sell property and only pay the clause figure but pay every single penny left over from what little bit of equity will be left!! Very confused as contract I signed does say the £2k and thats all!!!!

HELP PLEASE

Sarah

[debbiw]

Hi Sarah, In my proposal it states that in year 4, i have to pay over £7k of my share of the equity (75%), but somewhere else I have read in my agreement, that I have to get two valuations in year 4, and go with the greatest, and pay over 100%, so I too am confused.

[slt]

They dont make it very easy for us do they!! I have found the paperwork very complicated to read through, lots of jargon and figures etc. Just need someone to tell it to me in black and white not multicoloured!!

Sarah

[MelanieGiles]

You are clearly with one of the larger firms of IPs's. I suggest that you locate an e-mail address for your IP - which you can find on the Insolvency Service's website under "Find and IP" and query this with them directly. I would find it very hard to believe that you are obliged to hand over 100% of the equity, and suspect that you have spoken to someone relatively low down the food chain in this company.

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

[ray_a]

Sorry a whole load of alarm bells are ringing here!!!!

Basically there is nothing stopping you from selling your house although your IP does need to be informed.

However, you have to be mindful about the full impact of this and I can vouch for this.

Firstly, there will most probably be a clause in your IVA dealing with windfalls and any share in your equity can be used to pay your creditors up to 100% of the amount owing and yes any statutory interest of the time that you entered into an IVA.

Basically what we need to do is to determine how much you owe in full to your creditors, how much you expect to get from the sale, the amounts owing on your mortgage, and then the share of equity. We will then need to see how much your IP will require in respoect of fees and then what is left for any potential statutory interest.

If you are on the floor then I am very sorry but you have to be aware of this dangerous position that you are faced with.

However, not wanting to be the doom and gloom merchant on here, there are ways of dealing with the statutory interest and even 100% payments and that is by variation of the IVA.

Sorry to warn you but I was in a similar postion 12 months ago and found this out before completing a sale that I was liable for statutory interest. Thanks to the help of this forum I was able to find a way to resolve this problem.

Anyway Good Luck and do let us have the details so that we can help because there is a lot that can be done!

[MelanieGiles]

Ray

With evidence of a fourth year revaluation, it is almost certain that the poster will have had to agree to an RX1 being placed on the property, so they may well be estopped from selling. And given that there is such provision, the poster does need to get the IP's express perimission to sell.

And as the property is included in the IVA proposal in any case, the sale proceeds cannot be deemed to be a windfall.

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

[jayne]

What is statutory interest? I have had my IVA modified and am now selling my house, giving all of the equity to my IVA and then it will end early. However I have never heard of statutory interest ??

[MelanieGiles]

Statutory interest runs at 8% per annum under bankruptcy proceedings, and is payable in the event that the debtor could afford to pay his/her creditors in full as a result of asset realisations.

Often, creditors will ask for the same provisions under IVA proceedings - but this is only payable if the debts can be repaid in full.

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

[jayne]

Thanks for that Melanie,
thats clear and it doesnt apply to me

[slt]

Thanks for the advice. My IP is back off leave next week and I will clarify this with him. I know that the rx1 form was lodged with the IR at the start of my IVA. I will only be left with around £3k if that after the sale and mortgage & 2nd charge have come out and the £2k IVA clause charge. Going to keep my fingers crossed on this one, desparately want a fresh start and will need financial back up to rent a house when sold.

[ray_a]

Sorry was away from a computer for a few days so just caught up on this one.

We were in the same position and the Solicitor had to request the permission apparently when the offer was made so I think you should be OK as longing as the creditors are going to get a fair return.

You mention renting you will need to budget for six months rental though and you need to realise enough funds to do so. I would also suugest that you will need some working capital to resume your life and worth putting this forward to your IP.

I suspect your IVA will require to be varied.