Have been informed that all the proceeds of house sale will go to IVA. Is this correct ?

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Diana.l

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Post by Diana.l » Wed Feb 10, 2016 1:45 pm
Hi I am selling my house and been in touch with my iva company who have informed me that all the proceeds from the sale will go to them and until they have paid out my creditors and their fees I will not be able to have the remainder of the money and it can take upto 6 months. Is this correct for I have quite a bit of equity in the house and quite happy to pay back all of what I owe but I am relocating and would be with out a job for a while
 
 

kallis3

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Post by kallis3 » Wed Feb 10, 2016 1:51 pm
Hi and welcome,

You should be able to keep some fees back to pay your solicitors bills and also to be able to fund the relocation.

Which company are you with?
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Diana.l

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Post by Diana.l » Wed Feb 10, 2016 3:34 pm
Hi i was with Gopher at the start over 2 years ago but Knightsbridge took them over
 
 

Lisa Thomas

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Post by Lisa Thomas » Thu Feb 11, 2016 9:08 am
Yes that's correct UNLESS you get a variaiton order FIRST before selling the house.

That way you can try and reach a deal with creditors to keep some of the proceeds and pay them a settlement.

Definitely worth doing if its not too late otherwise you will lose all of your share of equitable interest.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
 
 

Diana.l

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Post by Diana.l » Thu Feb 11, 2016 10:29 am
Hi i am confused now i owe around £18000 on my iva and have paid off £2600 so far.The fees i thought would be around £3000 to £4000 surely i wouldnt be paying anything else!
 
 

Lisa Thomas

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Post by Lisa Thomas » Thu Feb 11, 2016 10:31 am
I'm not quite sure what you mean.

You owe £18k plus costs plus presumed statutory interest.

You have only paid c£2.6k towards this debt and therefore excluding costs and interest have at least £15k left to pay (if you were able to pay off in full).

You hare expecting to sell off your house and presumably realise some equity from it - this should therefore be paid into the IVA to reduce the balance.
Last edited by Lisa Thomas on Thu Feb 11, 2016 10:32 am, edited 1 time in total.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
 
 

Lisa Thomas

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Post by Lisa Thomas » Thu Feb 11, 2016 10:34 am
The alternative is to not sell the house but to PROPOSE selling it in exchange for reaching a F&F settlement to finish the IVA early.

Therefore if they rejected the variation you would (normally) just continue your IVA in the normal way.

What you are saying is you are going to sell the asset and keep the money yourself, which will be in breach of your IVA terms - the equity in the house will be an asset of your IVA.

Happy to talk through if you are confused.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
 
 

Diana.l

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Post by Diana.l » Thu Feb 11, 2016 12:40 pm
Sorry i am confused do you mean that after i have paid the full amount that i owe they will also want more money from the equity in the house
 
 

Lisa Thomas

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Post by Lisa Thomas » Thu Feb 11, 2016 1:05 pm
No if you were able (somehow) to pay off your total debt plus statutory interest plus the costs no further monies would be required.

How much equity is there, how much are your contributions and when did your IVA start?
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
 
 

Foggy

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Post by Foggy » Thu Feb 11, 2016 1:18 pm
In essence what Lisa has suggested is that, as far as your creditors are concerned, you do not NEED to sell the house now. So, you go to the creditors, via your IP, and say something along the lines of: " I would like to finish my IVA early and, I am sure, you would like to get the monies owed to you sooner rather than later. So, IF you agree to accept £xx in full and final settlement I will put the house on the market. If you do not agree then the IVA shall run its course as originally agreed."

This way you can offer a figure between what they would get under the terms of the IVA and the total you owe, including fees and statutory interest. The more you offer, the sweeter the deal to them.

As a starting point I would forget statutory interest in the offer and work around the £15k Lisa mentions, which would still be a very generous offer.
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Lisa Thomas

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Post by Lisa Thomas » Thu Feb 11, 2016 1:27 pm
I think you explain it better than me Foggy!

But actually I would use the remaining term (plus an extra year for presumed extension for the equity) multiplied by the amount of monthly contributions as a starting point not the £15k...

This may well be lower than £15k but can't answer that question until my other questions have been answered:

"How much equity is there, how much are your contributions and when did your IVA start?"
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
 
 

Diana.l

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Post by Diana.l » Thu Feb 11, 2016 3:09 pm
Hi the house is up for sale for £220.000. I took out my iva nov 2013 which was for the sum of around £18.000 and pay £100 a month. The mortgage outstanding is £61.000 so i would have £155.000 left after paying the estate agents. I have been in touch with Knightsbridge and they say i will have to pay them around £25.000 to close the iva. I will be moving away and buying a boat to live on in the surrey area so will need funds around £100.000 i am happy to pay my creditors but i just thought this seemed quite alot and i have already paid in £2.600
 
 

lifenoteasy

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Post by lifenoteasy » Thu Feb 11, 2016 3:29 pm
The £18k that you went into the IVA with would only ever be written off at the end if nothing else had changed and you did not have access to other funds.

If you come into a windfall e.g. lottery, inheritance etc. then that would go to the IVA until such time as the initial amount plus IP fees, statutory interest is cleared.

The actual debt actually increases in the IVA until the end.

because you are releasing the equity in your property the first priority is to clear your current debts and that is a legal obligation.

To be fair in you could have been faced with a secured loan request in a few years time to release that equity so this is probably doing you a favour.
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luluj

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Post by luluj » Thu Feb 11, 2016 9:29 pm
I think the advice of Lisa and the explanation foggy gives is spot on ... if it were me I would look to offer around £15k and see what happens ... don't be forced into offering £25k first time around!
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Lisa Thomas

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Post by Lisa Thomas » Fri Feb 12, 2016 9:52 am
In a hypothetical scenario of you not selling the house and your IVA continuing in the normal way (and a years extension was added on due to the equity) then by my calculations you would pay c£6k over the remaining term.

Instead you have told your IP you are selling the house in which case you have to pay all of the equity in until all the debt, interest and costs have been paid.

They will require £15k plus interest (say £2.5 for 2 years at 8%) plus costs (say £2.5k based on 15%) so they would ask for c£20k to clear everything. Not sure where the difference of £5k comes from - maybe their fees are higher than 15% or there were some outstanding Nominee fees.

Unfortunately you have laid your cards on the table.

If you had said to creditors, I don't really want to sell my house but I want the IVA to finish so I am offering to sell it voluntarily and pay into the IVA the same amount of funds you would receive if the IVA continued in the normal way (say £6k) then they might have done a deal.

Instead you are already selling without a variation agreement so they get to take the full £25k needed to pay everything off in full.

The only way to potentially retract things is to tell them you don't actually want to sell the house and put forward a F&F variation offer instead to sell it in exchange for early completion of the IVA but I suspect this might get rejected as they now know you are desperate to sell it.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
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