I am currently in an IVA with Aperture (formerly Grant Thornton). The initial arrangement was that we pay 6 years of instalments plus a further year dependant on the equity value of our home (it had a value of approx. £180k against a mortgage value of £172).
According to Aperture, there are 22 payments of £300 left, plus a possible further 12 months if the equity in the house exceeds £5k
A family relative has offered to settle the IVA, and I'd welcome some advice as follows:
* I didn't actually understand the equity clause on the house. It was made to sound an awful lot more complicated than "if the equity value is higher than £5k at the end of the first 6 years, you must pay a further 12 monthly instalments". I was sure there was a condition about the value of the home increasing. Can anyone tell me if the above "£5k in equity clause" is common?
* Assuming it is correct, the house valuation given back in 2012 was approximate. Houses on our estate are difficult to sell, and prices have been stagnant at best since around 2010. The 'quick sale' valuation would probably be around £175k. If we secured 2 valuations from independent estate agents for a 'quick sale' basis, would the IVA supervisors accept this? Even if it meant there was no equity in the house?
* would we need to have a reason for the early settlement, other than "a family relative has offered to pay a full & final settlement"?
* The supplier of the F&F is looking at a figure of £5k - £6k. Would this be realistic? Obviously if there was no requirement to pay the additional 12 months instalments, the max amount would be £6,600 (22 x £300). With the additional 12 instalments, it's £10,200.
Any answers to the above, along with any general tips on F&F settlements, would be hugely appreciated.
A f&f offer is generally as near to the expected dividend as planned if the IVA ran its duration. Therefore you calculations seem a fair starting point.
If the IVA is causing you stress, pop that in the reason for your F&F offer.
A quick sale valuation is what I obtained and it was accepted (not F&F), the 5k clause is a pretty standard one to be fair.
Lots of posters have completed a F&F offer and I'm sure will be along later today to offer your their tips.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
As Lesley says, the £5k trigger is pretty much standard. If you can get equity below this they should forego the extension.
As long as the agents don't state "forced sale" on their valuation ( it is supposed to be at market value) but tell the agent to price it for a quick sale.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Weby72
I am currently in an IVA with Aperture (formerly Grant Thornton). The initial arrangement was that we pay 6 years of instalments plus a further year dependant on the equity value of our home (it had a value of approx. £180k against a mortgage value of £172).
According to Aperture, there are 22 payments of £300 left, plus a possible further 12 months if the equity in the house exceeds £5k
A family relative has offered to settle the IVA, and I'd welcome some advice as follows:
* I didn't actually understand the equity clause on the house. It was made to sound an awful lot more complicated than "if the equity value is higher than £5k at the end of the first 6 years, you must pay a further 12 monthly instalments". I was sure there was a condition about the value of the home increasing. Can anyone tell me if the above "£5k in equity clause" is common?
1. Yes this is a common clause.
* Assuming it is correct, the house valuation given back in 2012 was approximate. Houses on our estate are difficult to sell, and prices have been stagnant at best since around 2010. The 'quick sale' valuation would probably be around £175k. If we secured 2 valuations from independent estate agents for a 'quick sale' basis, would the IVA supervisors accept this? Even if it meant there was no equity in the house?
2. I believe the valuation is likely to be on an open market basis, not forced sale/quick sale.
* would we need to have a reason for the early settlement, other than "a family relative has offered to pay a full & final settlement"?
3. You don't necessarily need a reason, but you are entitled to closure so you can begin to move on with your life and if you are offering near to, or the same, as creditors would receive anyway it only simplifies things and I can see no reason why creditors would object.
* The supplier of the F&F is looking at a figure of £5k - £6k. Would this be realistic? Obviously if there was no requirement to pay the additional 12 months instalments, the max amount would be £6,600 (22 x £300). With the additional 12 instalments, it's £10,200.
4. Yes if no extension is required this is perfectly reasonable offer that I would hope creditors would find acceptable.
Any answers to the above, along with any general tips on F&F settlements, would be hugely appreciated.
5. Make sure your offer states that money only payable if offer accepted and that any contributions paid in the meantime whilst a decision is made will be reduced off the lump sum figure.
Thank you all for taking the time to reply - it's appreciated.
One final quick question, Aperture have asked for the relative to write a letter to them offering the F&F, and it's this letter that kicks-off the process. Is this normal?
I'd rather we (my wife & I) wrote the letter to Aperture, with the letter from the relative as an attachment. Would anyone agree? (and I note the advice re: the money only available as a F&F, and the contributions in the meantime)
PS - if anyone has any experience of dealing with Aperture/Grant Thornton over F&F's, I'd welcome any comments/tips!
It is normal for the letter from the relative as they need to know where the funds are coming from and definitely state that if the F&F is rejected then the offer will be withdrawn.
Check with Aperture as to whether or not they are ok with this.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
