Property equity release

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Charlie.m

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Post by Charlie.m » Mon Aug 18, 2014 12:01 pm
Hi

My wife is currently in a DMP and has been advised by the company that she can now apply for an IVA. There is at the moment twice as much equity in her share of our property as the debts she owes to her creditors. Also her initial payments will be really small until after the mortgage is paid off 3 ½ years into the IVA when they will rise to over £300 per month. She has been advised that the standard clause regarding re-mortgaging at 54 months or adding a further 12 months to the IVA will be added. However at that time her share of the equity in our property will have risen to 3X the debts and there will be no mortgage left on the property. The Company are being very vague about the chances of re-mortgaging when the time comes but surely with all that equity available and only 57 years of age at month 54 there is a very high chance that she will qualify for a re-mortgage. Has anyone else found themselves in a similar position and did they find that they had to re-mortgage? Any advice or observations on the above will be greatly appreciated.
 
 

luluj

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Post by luluj » Tue Aug 19, 2014 4:39 am
I would suggest she speaks with two or three
IVA providers who post on the forum to gain specific advice on her situation. Entering into an iva is not a quick decision and professional advice is required. If your wife did enter into an iva your income would also be used to assess her affordable payment limit against her %share of the income and expenditure .... It maybe if the current equity level is as high as it is that a remortgage now is the better option to cover her debt level, rather than enter into a formal insolvency product which would place restrictions on her and your home for a minimum of six years .... Have a chat to a couple of providers ..look at the expert link on the left for some suggested IPs
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Michael Peoples

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Post by Michael Peoples » Tue Aug 19, 2014 11:55 am
It is certainly possible as creditors raraely demand a sale of the property. She could propose the IVA as a standard one and withdraw if creditors try and modify this and include conditions she does not like. Most firms will propose an IVA without up front fees so nothing to lose by giving it a try.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

Charlie.m

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Post by Charlie.m » Wed Aug 20, 2014 9:02 am
Hi

Thank you Michael and Luluj for taking the time to answer my post.

I should have explained that I am already in an IVA with the same Company as my wife’s DMP and so re-mortgaging now is not an option. I am aged 65 now and as there is little chance of having to re-mortgage at month 54, with the additional year my IVA should complete in 3 years time. With the mortgage paid off shortly afterwards the plan was to sell the house and downsize to pay off my wife’s DMP. We really didn’t want to do this as we are really happy where we are and would be devastated at having to move but with me then being 68 and time running out we would want to be debt free in order to enjoy my remaining years after the tough times we have been through. An IVA for my wife would be an ideal solution as there would then be no need to sell the house to pay off her debts. The only problem being if we had to re-mortgage at month 54 of my wife’s IVA instead of being debt free 18 months later we would still be in debt and relative poverty for many years to come. Her debts at the moment are around £36,000 and her share of the equity is about £70,000. We really don’t know what to do and so any advice would be most welcome. Sorry for not explaining things more fully in my original post.
 
 

Adam Davies

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Post by Adam Davies » Wed Aug 20, 2014 9:28 am
Hi

I think Michaels advice is spot on, propose an IVA but do not go ahead if she is not happy with any equity modification made by creditors

Regards
Andam Davies
 
 

Michael Peoples

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Post by Michael Peoples » Wed Aug 20, 2014 9:58 am
I definitely think it is worth a try and your wife does not even need to cancel her existing DMP agreement in the interim. If the IVA is accepted without any unacceptable modification she can then cancel it and move the payment to the IP. If the IVA is rejected or it has nasty surprises she justs withdraws the proposal and stays where she is. Nothing to lose in my opinion.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

Charlie.m

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Post by Charlie.m » Wed Aug 20, 2014 1:48 pm
Thank you very much Michael and Andy for your advice. We have now decided to go for the IVA with confidence but with an eagle eye on the look out for the financial clauses. I can’t believe that it took me 3 years to find this site! Many sleepless nights in that time but no more so thanks to everyone who posts on here with their excellent advice.
 
 

Michael Peoples

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Post by Michael Peoples » Wed Aug 20, 2014 2:57 pm
Good luck with the proposal and let us know how it goes.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
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