thinking of iva

[sjw]

hi, i am thinking of entering into a iva but in a shared ownership mortgage 50% and 50% housing association. would i have to inform housing association and can they prevent us entering into iva.
also what informantion would we have to provide to get iva
also i have read about equity release would we have to do this as we only own a 50% share and pay rent ato housing acc for other half and there is no equity in house, if not would the creditors make us extend beyond 5 years to make up for not having equity.

[Oliver]

Hello

You will not have to inform the housing association as long as you are not planning on including any possible unsecured debt which you owe to them in the IVA.

If there is no equity in the property it is likely that the minimum dividend required will have to be made up purely from your monthly payments and not reliant upon any equity release. This should ensure that your IVA is still structured over 5 years. However, there may be a clause inserted stating that you may have to release equity at the end of the agreement if your property has gone up in value.


Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[Adam Davies]

Hi sjw
You can enter into an IVA with a shared ownership property and you may need to release some of your equity in the fourth year of the IVA.Although you do not have equity now the chances are that you may have in a few years.However you may be able to get a one year extension instead of the equity release.You need to talk it over with your propective IP.
If an equity release clause is part of your IVA then the housing association will find out but it will not affect your ownership/tenancy.
You will need to provide details of your outstanding debts and details of your income and expenditure.
Speak to several companies before committing.
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[catullus]

Most shared ownership mortgages have a clause in them which prohibits remortgaging other than to buy a greater share of the property.

To that extent its difficult to see how any extra value can be squeezed out of a shared ownership property within an IVA and its normal to build in an extra few months contributions to compensate for the theoretical equity in the property,

I've never seen a creditor insisting that a shared ownership property be sold to extract the value but, in theory, if the value of equity was large in the context of the debts it could happen, but I think that would be very rare.

[Oliver]

We have found similiar experiences to Catullus. Lots of Shared Ownership schemes seem to have a clause inserted stating that equity can not be released from the property for capital raising. As Catullus says this can usually be overcome by extra payments if needed or if there is no equity anyway no further action.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[Adam Davies]

Hi
I,ve pulled out a couple of recent posts that seem to show that creditors are indeed putting clauses in agreements asking for equity release in shared ownership propertys.
Is it that the creditors are unaware that the housing associations will not agree to a remortgage to raise capital ?
Surely the IP should be insisting that such clauses are withdrawn.


michael
Starting Member

1 Posts
Posted - 10 May 2007 : 16:39:54

Hi i have my creditors meeting on the 16th, i own about 95000 and my offer is 450, with eleven creditors i have no assets except 37.5% stake 25% sheard ownwership the rest between my partner and myself in our ,my question is what do you think they are looking for money wise,does my proposal stand a chance and if it fails what do i do next, i have already recived letters from bailliffs giving me 28 day to bay or else, can you help



michael
Junior Member

7 Posts
Posted - 16 May 2007 : 13:30

Hello all great newes i was accepted just about though had 76% i was so excited i never heard what my IP stated except a few modifcation and that instead of £450 it had gone up to £470 and that i will have to get a valuation of my property in three years time, boy what a lift off my shoulders, we can now all look forward to a dept free future, good luck to you all now that i'am a member of this exclusive club called an I.V.A
Michael


claire
Average Member

14 Posts
Posted - 22 March 2007 : 15:44:25

Further to my previous posting today, just heard from my IP and my IVA has been accepted just one modification to do with my property as my original proposal did not include an equity release as my property is a shared ownership house (1 own 50% accord housing own the rest) and i pay rent and mortgage, however they have stated that in year 4 i have to get a mortgage redemption penalty figure, 2 remortgage quotes to release 100% of the equity, if this is done it would end the IVA a year early..my problem is with shared ownership mortgages you can only release equity to purchase additional shares in the property not for any other reason so thats unlikely to happen. I know its years down the line but what would happen in that instance?

Andy Davie
IVA.co.uk Spokesperson

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

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

[sjw]

thanks for your quick replys still not sure what to do regarding entering into iva but debt getting out of control now have been getting debt to pay debt lately. we both work full time and pay out more than we earn at the moment so living off credit cards which are quickly running out/

[catullus]

Andy

I never cease to be surprised at the ignorance of some of the people charged with voting on behalf of creditors.

In my experience the restriction on remortgaging other than to buy a greater share of the property is almost universal and a good proposal should explain the circumstances and justify an alternative offer to buy out the equity.Many, I suspect don't and I have to say that I would not be surprised if certain IP's missed this point when drafting their proposals.

Even worse is the fact that, of the many people from whom we receive a vote, it is only too clear that on many occasions they have not read the proposal but have worked on the exec summary and possibly the history.

I'm not saying that there are not housing associations who do not forbid remortgaging for general purposes but a very great many do, and I fear that there will be certain IVA's that have been approved with equity buy out clauses on shared ownership property where the homeowner isn't aware of the restriction and the IP hasn't picked it up.

[sjw]

is a iva less likely to be accepted if we were unable to release equity due to housing acc not allowing it. x

[Oliver]

Not necessarily. The case will be judged instead on the monthly commitment you are offering. If you can show the creditors that they will be in a better position than if you were to go bankrupt the IVA proposal will still have a good chance of being accepted.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp