I am in the 4th year of our IVA, when we took this out, we were informed that in the 4th year if there is equity in the property ( when we took it out we had £23k) they will look to release this, however this hasn't happened. Our original debt was about £58k and we should now owe about £11k, however they are saying its £34k beacuse of the quity in our property??? so they are pushing us down a secured loan route, through a broker, which by the way has an obscene interest rate, and they are saying the loan would be £11k. Please can someone explain that why they are taking in account OUR equity in the property if the balance through a loan company would be £11k
There are a number of threads about secured loans and equity release. Usually you do not have to agree but this can depend on your proposal and any modifications or minimum dividend requirements.
I assume that you still have £11k to pay into the IVA and your debt has not decreased to £11k otherwise you should be able to clear the debts in full before the end of the IVA and will not need any more borrowing.
The balance we owe is £11k, but DFD seem to be making us take out a secure loan, which as I have mentioned before has extortionate interest rate. However if we stay with DFD for the the last year they are saying we owe £34k as when we took this out we had approx £23k in equity, so really they are not getting us out of debt, my question is - can they do this as this was not what was told to us 4 years ago, not getting much joy from them tbh, so Im stuck between a rock and hard place
It depends entirely on what it says in your proposal.
Most say release equity by remortgage and if this fails then a 12 month extension applies ( at the usual monthly repayment rate). A secured loan is not the same as a remortgage and they cannot force you to take one.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Hi Deborahd7217
Please drop me an email (address is in my profile), with all your contact details and I will get in touch to discuss your issue further.
Look forward to speaking to you soon.
Regards
You may have misunderstood / been miss informed. My DFD agreement (i too am at the same stage) says that I have to attemp to release equity in my property at month 54 (or now as they have told me). The following conditions have to be met: -
- Value of remortgage is to be not greater that 85% LTV of property.
- If the amount is to be less that £5,000 then it is clasified as deminimus and does not count.
They have appointed select to handle the process and I have already spoken with the select people and it is really quite painless. You really just need to spend some time reading the terms. If not sure post them on here and get some independant advice from fellow forumers. Also DFD should be able to answer all your queries.
We're in exactly the same situation with DFD / Select. We were told by 2 DFD advisors before Christmas that our final payment would be March, we then received a letter from Select regarding equity release, when they contacted me I was told that whilst we were under no obligation to take the secured loan, if we didn't they would put this in a report to DFD and we would likely fail our IVA! I've literally just come off the phone with the guy from Select and the first questions he asked was have I been in contact with anyone from DFD since we last spoke, when I said no, he told me that from now on we would deal with Select and only Select. I can't understand how this can be the case. After paying into an IVA for 5-yrs we're now being told we have to get a secured loan to end the IVA (or risk failing) but will end up repaying further debt for the next 5+ years.
Keeno --- if your proposal states remortgage or extension then those are the options you have to take. They cannot force a secured loan on you (unless you signed up to agree to this in a variation)and cannot fail the IVA on grounds of non-compliance.
Further Select cannot dictate who you speak to.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
DFD have been pushing quite hard for people to accept the new protocol. I must have told them a dozen times that I am not interesed at the minute as it specificly changes the wording in my agreement form "remortgage" to secured loan. and a few other things that benefit them and not me. The only carrot is the PPI closure.
That said, I have today submitted my mortgage statement to DFD for them to forward on to Select. I have a had an itial chat with Select about the process and its all groovy.... Now the agonising wait for an answer.......
The main thing Imhotep is that they will always insert a from of equity clause - so you may agree to repay 11k of 25k but if the opportunity to eek a few more pounds put by getting a remortgage / extended term arises then thats only fair.
