What courses of action are open to me to appeal

[Steve.t1]

I am currentlty coming towards the end of my 5 year IVA but am now being asked to release equity from my home. I believed that I was mislead by the company who arranged my IVA into thinking this would not be required, and that specifically it would happen in the fourth year if at all. All the literature that I received at the time made great play on being debt free after 5 years and that there would be no requrement to remortgage. I have this in black and white.What courses of action are open to me to appeal this request?

[Viki.W]

Hey Steve,

An expert, I'm sure will answer your question shortly. Are you absolutely sure that there is nothing to do with equity release in your documents?

[pm5]

Hi Steve im no expert on this one but im sure that in most IVA's you have to release equity in your home in the 4th year.

[MelanieGiles]

It will either say the fourth or the final year, and if you can reproduce the exact wording we can assist further. Also check your Chairman's Report to make sure there were no creditors modifications which could override the proposal - but you would have had to agree to all of these so I am suprised you feel that this was not something you agreed to.

[Steve.t1]

Thanks for all your replies. I just spent about 45 minutes typing out a reply including the exact wording of the fourth year clause and I hoped also a convincing case for feeling aggrieved, it has now all disapeared. I think it has something to do with me not logging in at the time.............


Basically the clause refers specifically to "in the fourth year" Making no mention of the fifth year. I am now nearing the end of the fifth having never received advice or instruction from my supervisor. I now know I could have taken out this equity at the beginning of the fourth year, stopped making the huge monthly payments and ended the IVA early. I feel very agrieved that this will cost me so much more money now that my house has gone up in value whilst mortgages are far more expensive and punative. Whats more house prices are being tipped to fall rapidly very soon... Just after i have remortgaged by the looks of things. This doesn't seem reasonable or properly handled to me.

The literature that accompanied my original proposal goes to great lenghts to staTe that there will be no requirement to remortgae or take out further borrowing. I still have it in black and white. Surely that is misleading to be mild?

[MelanieGiles]

I can understand your frustration, and wonder why your Supervisor has not been chasing you to get this done.

It is, however, your responsibility to sort this out under the terms of the IVA (assuming that the wording of the clause is one I am familiar with) and I suggest you discuss the current position with your IP.

As a consolation, it is far harder to find mortgage funding now that this time last year, so you could find that this has worked to your advantage after all as, so long as you demonstrate you have made best efforts to secure funding you may not have to raise anything.

It might be worthwhile getting a lawyer or another IP to have a look over the paperwork to advise you whether you are doing the right thing, and whether you have grounds for a complaint against your IP.

[Steve.t1]

Thanks for replying Melanie.... You are up late!! I am at the end of my tether to be honest. i'm trying hard to be honest with myself and not just be a Mr angry for the sake of it.


My own lender Halifax has declined to lend me extra and I expect regular high street lenders to do the same. A broker called 'whos lending?' have indicated that they will but at an interst of 7% which seems high to me.

My main concern is that I feel 'mis sold' to.

If I did have a case,and I accept I may not.

Who would I complain to?

[MelanieGiles]

If you feel that you have a genuine complaint against your IP, your ultimate route is to their own regulatory body - but I suggest you fully explore matters directly with the IP first - as at some stage you must have accepted these modifications and therefore if you have left it until the 11th hour to deal with there is perhaps blame on both sides.

These days, people are not expected to take on additional lending which is going to cost them any more than half of their current IVA payment, and I will certainly be using that as a marker for my own clients if faced with circumstances similar to yours.

Which IP firm are you with?

[Steve.t1]

I am now with payplan solutions, up until february I was with debtmatters, who have sold it on as part of job lot. They in turn, as you are no doubt aware started life as Ratcliffe and Co.

[Steve.t1]

I did accept the modifications,(or so I believe and presume, I honestly cant remember how aware I was at the time about what exactly I was signing at the time, i was just so grateful to be sorting things out) but only beacause I was given the impression it was a matter of routine and wouldn't actually happen. It was explained to me along those terms.

I was hoping that now the fourth year has passed, that I would not be liable to release equity as it makes no mention of beyond the fourth year. Is this wishful thinking?

[Lisa2009]

As Melanie states, if you remortgage, the payments have to be at an affordable level.
The extra you would pay to your mortgage would not be expected to be higher than half of what you already pay into your IVA each month, leaving you that bit better off than you are now.

Personally i would just do it and get it over with. In the current climate, you may not be able to raise a lot anyhow which, as Melanie said could work to your advantage.

At least you would then be free from the IVA and you can start looking towards your debt free future.

Congrats on coming so far.

[MelanieGiles]

I am afraid so, Steve, but I would take the advice of Payplan here because clearly your previous IP were not chasing this along in good time.

[jpj]

I would post your current house value and your current mortgage value if you can?
do you ACTUALLY know that there is money you have to release yet?

Remember in most cases you only have to mortgage up to 85% loan to value.

Valuers are giving lower valuations now due to the state of the market, so your house may not value as high as you think!

I would concentrate on getting the best outcome for your remortgage for now.
If I was coming to the end of my 5th year I would just be happy the whole thing was over and not want to start a long battle over "mis selling" ,which would probably be hard to win!

[Steve.t1]

Good morning everyone, once again thanks for your repiles. I cant honestly say they are the answers I was hoping for but I know you gave them honestly and in good faith and no doubt from a postion of experience and knowledge.

I cant take heart from the suggestion that I mayt not be able to raise a mortgage, as although a high street lender wont touch me with a barge pole, my IP has very conveniently put me in contact with a broker who has already found a lender to lend me up to £25,000 at a none too competetive 7% rate. Secondly I am due to remortgage right now, and as far as I can see house prices have not yet fallen to the level of nearly two years ago (the time when under the clause I could have first released equity). THE CURENT MOOD IS THAT THEY WILL FALL RAPIDLY, BUT THEY HAVENT YET AS FAR AS I CAN SEE.

My biggest frustration is in the suggestion that the IVA is nearly over. I dont see this at all. The truth is that my payments of £529 that i have struggled to make for almost 5 years will soon be halved to around £265 for the next 19 years, that sounds like a 24 year repayment plan to me.

I could have stopped paying the £529 a month as early as July 2006 according to the clause, will i get that money back?

All said and done there seems something manifestly not right about being compelled to borrow a large sum of money to pay off an IVA, it seems completely at odds with the five years and done ethos.

The truth is that In all likelihood, I would have paid nearly £33,000 back in payments followed by another 25,000 grand in equity release which i will spend the next 20 years paying back.

I am being thrust into a large debt by both my creditors and my IP

I entered the IVA fully in the belief that five years of pain would be rewarded with a clean slate. If you are a homeowner, then I feel that an IVA doesn't do what it says on the tin.

[MelanieGiles]

Sorry Steve - I am going to have to disagree with you here. When you borrow money there is an inherant wish to want to pay it back - and when you run into trouble your creditors are prepared to take a commercial decision to allow you to pay some, but not all, of it back.

It is a common requirement (now standard term) that you agree to raise equity against your property at the end of the IVA. If you were not prepared to do this then the IVA was not the right solution for you in the first place.

How much equity was there in your property when you entered the IVA and how much is there now?