Just a separate question to the other thread that I am commenting on.
Month 54, house is valued, redemption statement received. Equity in house is say £7000. IP says we have to try and realise £2k to the IVA.
This then means remortgaging the property. When this happens doesn't the mortgage company then also charge fees to set up the re-mortgage.
How is this paid for. Is it taken off the original equity figure first £7k to mean that the realisation is lower, or does it mean you are actually getting more than the £2k realisation just so you can pay over that amount.
You will not get a mortgage anyway so the question is moot. However, if you can raise £2k from a third party there is no reason why you cannot close the IVA down after five years. If this is not possible then your extension should only run until the £2,000 has been paid in [plus any reasonable costs] and may not run the full twelve months. This does depend on your exact proposal but would be a normal case.
LOL that's true re the mortgage, but I was wondering because of the wording on my other post about cost of realisation. I'm assuming that for the calculations on the original sheet, they put in what it would cost to get the remortgage and therefore that reduced the amount of equity that would be available.
If there was five thousand available in a remortgage but the costs were three thousand you would only be expected to pay in the difference. Any remortgage would be net of costs.
So if there is £7000 total equity, less the £5000 de min so £2000 to pay into IVA but it costs £2500 to set it up, surely that would actually reduce the amount of equity that's available, therefore it takes it under the £5k dm. thanks Michael, sorry for questions, I'm one of those people that has to see it in figures to understand properly.
Leaky -- you don't get the £5 de minimis taken off --- if equity is over £5k you release. based on the whole equity figure, depending upon the way your clause was drafted, or extend. If it is under £5k the property is excluded.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Eh??? So if its over £5000 say £8000 you end up paying over the full £8k....In all these years I've never know it to be that. I always understood it to be anything over the £5k...that's totally thrown me
It is the same as the windfall clause: £499 and it is all yours, £501 and it all goes to the IVA.
For equity, it depends upon how your clause was constructed, as we have recently seen --- but the usual intention is to release 85% of the equity, subject to the ceilings imposed. i.e repayment must be no more than 50% of the IVA payment and the term cannot go beyond the existing mortgage. These conditions usually limit the amount well below the actual available equity.
In recent years, of course, this has always been a moot point as remortgaging is currently impossible and the extension usually kicks in.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I'm going to send a covering letter with my paperwork, laying out my calculations based on the information given me five yeas ago. Then if they decide its different they can explain back to me in the same way.
That's what I did Lea. My I.P initially argued their calculations were right but it's now with their solicitor for clarification. My IVA firm is inot accepting 85% LTV and ignoring the Protocol guidance. I'm getting tired of arguing and may need to go to Insolvency Service complaint route. A creditor added a modification to my propsal which was a straight lift of protocol guidelines. The spirit of the protocol is being ignored and interpreted another way. They may go back to creditor for verification but this equity clause should not be subject to interpretation or opinion. It's the one big downside of an IVA and needs to be addressed by Insolvency Service. I will make a complaint to them if I don't get anywhere. An in house solicitor in my IVA firm is not independent quality advice in my opinion.
Last edited by winter_blues on Thu Jun 25, 2015 9:52 pm, edited 1 time in total.
A solicitor or barrister can argue the letter of the law -- it needs a Judge to determine the spirit of the law. As you say, the spirit of these agreements is now being subverted by greedy firms, generally those that are creditor led.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Gawd winter, it never seems to end does it. We all know we are responsible for these debts and never wanted to take the route we had to, but to be led down the path and then sent on a different route when we are so close to the end of the journey is horrendous and scary all over again. Who is your IP Winter x
If the conditions were badly written the IP has to protect his or herself. A creditor could come after the IP if they did not extend when they should have so I think going back to creditors for direction is a good idea if the legal advice says that Protocol was not clearly worded.
