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a_c
New Member

11 Posts

Posted - 24 June 2007 :  08:05:28  Show Profile  Reply with Quote
What are the rules behind equity release, or does it vary from case to case?

For example, I estimate that at the moment there is approx £40K equity in our property. However, if I go for an IVA it will only be for myself, not my wife, and the mortgage is joint so half of the equity belongs to my wife. Would it therefore be considered that I only had £20K equity to release and would I be expected to release all of it?

Also, if I am expected to release equity who would actually be willing to give me a secured loan while I am in an IVA?

Thanks,

Andy

iva_squirrel
IVA Journeyman

iva_squirrel

United Kingdom
909 Posts

Posted - 24 June 2007 :  08:44:02  Show Profile  Visit iva_squirrel's Homepage  Reply with Quote
Good morning Andy,

If you own your home it may be necessary to contribute ‘equity’ held in the home to the IVA. In practice this generally means a remortgage to release the equity. This might be at the start, during, or at the end of an IVA.

Where a significant equity contribution is made to the IVA it is possible that the arrangement might last only 12 months rather than 60 months.

You would only need to release your share of the equity if it is a single IVA. Depending on the size of your debt, you could release your share of the equity now and look into full and final iva.


If you owe money, you can ask your creditors to let you pay a lump sum which is less than the full amount of your debt. This is called a Full and Final Settlement. In return for this payment your creditors agree to write off the rest of what you owe.


Kind regards,



Julia Simavi

Shortlisted with special commendation for Debt Counsellor of the Year by Credit Today Awards 2007

View my profile:
http://www.supersonicsquirrel.net/julia_simavi_profile.asp

Visit my website:
http://www.supersonicsquirrel.net

Credit Today Awards 2007 http://www.credittoday.co.uk/awards/winners.htm
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MelanieGiles
IP

MelanieGiles

48264 Posts

Posted - 24 June 2007 :  20:46:33  Show Profile  Visit MelanieGiles's Homepage  Reply with Quote
Julia is correct, in that it is only your share of the equity which would be available to creditors under insolvency proceedings. Depending upon your other circumstances - creditors may be happy to accept a portion of the equity, but this would depend upon the level of the offer you were making to them.

The most usual equity release provision operated by creditors these days is for you to have the property revalued during the final year of the arrangement, and then to raise equity based upon a remortgage at 85% loan to value of the property. Your share only would then need to be introduced, leaving your partner's intact.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk
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a_c
New Member

11 Posts

Posted - 25 June 2007 :  12:09:29  Show Profile  Reply with Quote
Thanks for the replies.

I just have one more question on this subject. Who would actually be willing to lend someone money to someone who is currently in an IVA, and would the IVA affect the interest rate?

Andy
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MelanieGiles
IP

MelanieGiles

48264 Posts

Posted - 25 June 2007 :  12:21:25  Show Profile  Visit MelanieGiles's Homepage  Reply with Quote
There are many mortgage companies who will now lend to people in IVA's. Find a specialist broker who deals in the adverse credit marketplace, and they will be able to advise you properly.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk
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Adrian Ratcliffe
IVA Junior

Adrian Ratcliffe

United Kingdom
99 Posts

Posted - 25 June 2007 :  18:53:35  Show Profile  Click to see Adrian Ratcliffe's MSN Messenger address  Reply with Quote
Hi a_c,

The best adverse broker is Tom Owen from central mortgages he has over 15 years of adverse history in mortgages.
Central Mortgages, Central House, 55 Main Street, Billinge, Wigan, WN5 7HA

Tel : 01274 560006
Fax: 01274 560008
Email: enquiries@centralmortgages.com
http://www.centralmortgages.com/

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Welsh Boy
IVA Journeyman

Welsh Boy

United Kingdom
573 Posts

Posted - 25 June 2007 :  19:29:24  Show Profile  Visit Welsh Boy's Homepage  Reply with Quote
a_c

You asked who would lend to you, there are many companies/lenders who would look at the business you are offering them. They would review your case on it`s individual merits and after searching you (with your permission of course) they would then report the rates and lenders available to you. If you are going to use a broker I would advise you to look at no penalty overhang on whatever deal they are arranging for you, giving you the opportunity to shop around at the end of any preferential rate. The rates aren`t to penal and I think you may be pleasantly surprised. Hope this helps -Tony
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Skippy
IVA Artisan

Skippy

United Kingdom
21651 Posts

Posted - 25 June 2007 :  20:04:50  Show Profile  Visit Skippy's Homepage  Reply with Quote
I would recommend contacting Welshboy (aka Tony Parsons) from this forum a call.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/
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dezbroatch
New Member

4 Posts

Posted - 20 April 2009 :  10:21:57  Show Profile  Reply with Quote
***Please don't advertise***

image

Edited by - Skippy on 20 April 2009 10:42:39
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Kinborough Channing
New Member

1 Posts

Posted - 23 April 2009 :  22:54:38  Show Profile  Reply with Quote
A firm has a total book value of equity of $2,000,000, a market to book ratio of 2, and book value per share of $5.00. What is the total market value of the firm's equity?....

Cosmetic dentist in Southampton

Cosmetic dentist in Southampton
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Max
IVA Artisan

Max

2802 Posts

Posted - 23 April 2009 :  22:59:13  Show Profile  Reply with Quote
Try the Chelsea Building Society - they are known to lend to people in IVAs but they are pretty strict as to ascertaining the reasons an IVA came about - an IP on here awhile back confirmed that they do lend to IVA people.
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David Mond
Forum Expert

David Mond

United Kingdom
1941 Posts

Posted - 24 April 2009 :  04:58:16  Show Profile  Visit David Mond's Homepage  Reply with Quote
quote:
Originally posted by a_c

What are the rules behind equity release, or does it vary from case to case?

For example, I estimate that at the moment there is approx £40K equity in our property. However, if I go for an IVA it will only be for myself, not my wife, and the mortgage is joint so half of the equity belongs to my wife. Would it therefore be considered that I only had £20K equity to release and would I be expected to release all of it?

Also, if I am expected to release equity who would actually be willing to give me a secured loan while I am in an IVA?

Thanks,

Andy





In a protocol compliant IVA you would have to release 85% of your net quitable share in the property (as revalued) in month 54.

So from your example your share is £20,000 so it would be expected for you to re-mortgage to pay in £17,000 in and around month 54. This is subject to you being able to re-mortgage and currently banks are lending only say 70% LTV and in any event your re-mortgage payment cannot exceed 50% of the IVA contribution.

If you cannot meet that criteria you would continue with your IVA payments for another 12 months.

Regards, David Mond, Insolvency Practitioner for over 43 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine.



See my blogs: http://mondo69.blogs.iva.co.uk/
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ram
New Member

ram

United Kingdom
4 Posts

Posted - 11 November 2009 :  02:51:55  Show Profile  Reply with Quote
Hello
I am in year 4 of my IVA.I bought my flat for £123000. It has just been valued for £115 000. I have £ 89000 left on my mortgage to pay back. How much equity can I release from my property. I am supposed to release £12000. Is that feasable? What do I do now?
Thanks for your contributions
Ram
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Debtwitch
IVA Campaigner

Debtwitch

United Kingdom
382 Posts

Posted - 11 November 2009 :  05:51:25  Show Profile  Reply with Quote
Hi Ram

Based on the protocol you'd be looking at realising upto 85% of the equity and using this formula based on the the figures here, it would be £8750, however your IVA was approved before the protocol and the terms of your IVA are likely to be different.

Just speak to your IP to establish what the terms of your proposal and any modifications were. Ask them to point out where you can read this so that you can read and digest yourself.

Kind regards,

Angela Rosler
Insolvency Manager

Helping people with their debt problems for nearly 10 years.

Contact me directly for free, impartial, confidential help and guidance.
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ram
New Member

ram

United Kingdom
4 Posts

Posted - 11 November 2009 :  15:36:41  Show Profile  Reply with Quote
Thanks Angela,
Another problem is that my own bank does not want to remortgage to release any equity! Where can I find any firm who will be able to remortage my flat? At this instance, my IP seems to be going towards increasing my IVA period. It does not seem anymore that they are here to help as they seemed at the start of the IVA.
Ram
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MelanieGiles
IP

MelanieGiles

48264 Posts

Posted - 11 November 2009 :  22:31:13  Show Profile  Visit MelanieGiles's Homepage  Reply with Quote
I think you will struggle everywhere to try and raise money out of that property in the current climate. What does it say in your IVA document about not being able to remortgage?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years. Owner and Director of PJG Recovery.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp or my company website www.pjgrecovery.com

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ram
New Member

ram

United Kingdom
4 Posts

Posted - 13 November 2009 :  18:38:15  Show Profile  Reply with Quote
Thanks for your valuable inputs.
My IVA document says..''in the event we are unable to realise £12000, we will realise the maximum amount available to us''
this will mean that we will release the maximum equity £8750 in our case and thats it.
There is no clause about not being able to remortgage. There is no clause about extending the IVA period in the contract. So it is wrong for my IP to say they will talk to the creditors to accept an extension of my IVA!!!
Ram
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kallis3
Moderator

kallis3

IVA completed.

United Kingdom
66038 Posts

Posted - 13 November 2009 :  18:57:38  Show Profile  Visit kallis3's Homepage  Reply with Quote
You will find these days that a lot of IP's will be going to the creditors to ask for an extra 12 months.

http://kallis3.blogs.iva.co.uk/

The friend in my adversity I shall always cherish most. I can better trust those who helped to relieve the gloom of my dark hours than those who are so ready to enjoy with me the sunshine of my prosperity. – Ulysses S. Grant








An iva.co.uk mentor,is someone sharing from their experiences of dealing with debt





Jan
xx
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MelanieGiles
IP

MelanieGiles

48264 Posts

Posted - 13 November 2009 :  22:47:51  Show Profile  Visit MelanieGiles's Homepage  Reply with Quote
If the maximum amount available to you is £0, then presumably you will have complied with the terms of the IVA?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years. Owner and Director of PJG Recovery.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp or my company website www.pjgrecovery.com

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kallis3
Moderator

kallis3

IVA completed.

United Kingdom
66038 Posts

Posted - 13 November 2009 :  22:53:15  Show Profile  Visit kallis3's Homepage  Reply with Quote
I do find equity release so confusing!

http://kallis3.blogs.iva.co.uk/

The friend in my adversity I shall always cherish most. I can better trust those who helped to relieve the gloom of my dark hours than those who are so ready to enjoy with me the sunshine of my prosperity. – Ulysses S. Grant








An iva.co.uk mentor,is someone sharing from their experiences of dealing with debt





Jan
xx
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MelanieGiles
IP

MelanieGiles

48264 Posts

Posted - 13 November 2009 :  23:22:19  Show Profile  Visit MelanieGiles's Homepage  Reply with Quote
Most IPs do as well Jan! There are still so many conflicting modifications in older cases, that I for one am glad of the clarity provided within the IVA protocol - even if I don't agree with equity raising at all!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years. Owner and Director of PJG Recovery.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp or my company website www.pjgrecovery.com

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