Hi, our IVA was extended to 6 years at the start. We owed £32k, and have paid £10k, but only half has been paid to creditors. We have 6 months left, and they are proposing a remortgage. Our current mortgage has 12 years left, and from what I can work out, they are suggesting the remaining £27k goes on our mortgage for the remaining 12 years. It's been getting me down the last few days, since I found this out. I don't want it hanging over me for another 12 years!!!! I'm sure they said I can just extend the IVA by another year, in leau of equity. But could they extend it again? Could I offer a lump sum, to end it now? If so, what do you think it would be? My parents may be able to help me out.
You are usually required to try and remortgage your property, using a 85% loan to value calculation, less your existing mortgage/secured loan. The reality is that you will be unable to secure a remortgage due to the IVA on your credit file so a 12 month extension would then be the norm. You could offer a lump sum equal to your remaining payments plus the extra twelve month extension.
In the VERY unlikely event that you could remortgage then any new mortgage can't extend beyond your existing term [12 years] and the new monthly payment can't increase by more than 50% of your existing IVA payment so this will the lump sum released
In answer to your question: Yes, they can extend the IVA by another 12 months in lieu of equity, on top of the "extra" year agreed at the outset -- which is a separate issue.
As Andy says, a remortgage is extremely unlikely at the moment and is subject to the caps he referred to.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thank you very much for the replies. You have put my mind at ease a lot! I thought they extended the mortgage by 50% of the current mortgage, which for us would be around £270, so to extend it by 50% of the IVA payment is only £110, so that's a lot more manageable if it happens, and also makes sense.They have asked for mortgage statements within 4 weeks, but could I just jump straight in with a full and final payment offer????
Go through the remortgage exercise if requested, once they are happy that you can't remortgage then a twelve month extension will be requested, at this point go in with the full and final offer
Well its taken them a while! But I have some news I could do with some guidance on.....
select partnership can apparently offer a loan which can either last the term of the mortgage (12 years) or the term does not extend beyond the later of the debtors state retirement age, which is 30+ years. They then told me not to worry, because it can't be longer than 25 years.
So their proposal is an arrangement of £110 a month over 25 years, which gets £9196 for our creditors. By paying an extra £10 a month could shorten it by 10 years!
Are our creditors likely to accept a full and final settlement offer now, less than £9196, so it all gets finished with no requirement for further loans?
What does it state in your original paperwork? If nothing was mentioned about a secured loan then I would question it.
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
The issue is you are coming out of the iva with another debt when you went into it being told that everything would end after year 6.
Check your paperwork and make sure you are absolutely comfortable with this.
Ask specifically whether your iva could be extended for 12 months if you could not obtain a mortgage or whether a full and final offer is possible given that a loan is considered to be an option.
This is a really Gray area with the possibility of a misspelling scandal and you need to ensure that all advice and guidance is pointed back to your ip.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
Should add that £110 per month over 25 years is £33000.
15% at least will go to your IVA company (just under £5k) and a similar amount will go to the company arranging this (and fair dues they need to be paid).
So if just under £10k is going to creditors is the remaining £10k interest?
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
I would think few of these secured loans go the distance anyway. Within a couple of years your credit file will be back to normal and you can remortgage the lot down the High Street so if you are happy to get the IVA closed down I am sure it will be accepted.
We have had a few of our clients propose settlements having obtained loans from Select and the offers have never been refused. Best of luck with the variation meeting.
To save repeating what has been posted elsewhere here is a section on my blog about do I have to take a secure loan, hopefully it covers your scenario.
Last edited by longslog101 on Wed Sep 23, 2015 11:16 am, edited 1 time in total.
My Blog details, the route I took before IVA, how I choose my firm, equity release advice (year 4-5), challenging the CRA's keeping IVA on credit file once gone from insolvency register
IVA ended August 2015. Would recommend McCambridge Duffy
Thanks for the replies.
Because the insolvency company took their wedge, we still owe something like £27k. The secured loan would pay them an extra £9160, but cost me £33k, but i would obviously try my best to shrink that quickly. In my slight upset last night, i sent the following email, which i think is very fair/generous:
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>I have had a chat with ken at select partnership today, which didn't
go too bad. However, I was a bit shocked when he advised me that he could offer us a secured loan which would be based on us paying £110 a month for 25 years, to repay £9160. I was under the impression that the extra payments would not exceed the balance of the current mortgage term, which I think is 12 years.
You may say, we will then be set free from the IVA, but surely he is wrong? That works out to be a 31 year debt plan, which is a bit excessive, and very
expensive! I do not want another loan hanging over us for 25 years, I need to
move on from this. A lot can happen in 25 years, i could be forced to take a
lower paid job, and be back at square one again, because i cant afford the
repayments! Can you look into this, and advise me what my options are please. I
really would like to try and agree a full and final settlement figure. No loans,
no mortgage extensions, just wipe the slate clean, as a family member may be
able to help.
My initial thought is 24 months payment, 24x £220=£5280.
I'm sure if we can agree something, we could settle this within a matter of weeks.
I think you need to check the wording about equity as longslog has advised, mine does not mention srcured loan just remortgage totally different things! Try and fight your corner look st the link longslog posted
