Very confused

[dand]

Hi all,

I am very new to all this, and am wondering if someone can briefly explain what this equity release clause/thing is?

Im looking to get an IVA, have 40k debts, with a 96k mortgage on a 100k house. (probably less to be fair)

how will this affect me?

Thanks,

[MelanieGiles]

In the final year of the IVA your creditors will expect you to have your property revalued, and based on the then value look to raising additional finance against the property based upon a maximum lending of 85% of that value. If you were able to do this, the money raised would firstly need to cover your existing mortgage and any secured loans, and if there was any money remaining this would be paid over to your creditors.

There is a deminimis level of £5,000 under which no further borrowings would be required, and the new mortgage payments are to be set at no more than 50% of your then current IVA contributions.

Was this discussed with you at the initial meeting held with the IP you have chosen to act for you?

[dand]

Melanie,

Yes it was discussed my Melanie from your office, but it was something i was going to ask about a little bit more in depth about when the case had been reviewed by yourself, and the IVA looked as though it would go forward.

From what she said, as i have very little equity in my house, the chances are that this could not be rasied, therefore worst case is an extension of 12 months on the IVA, is this correct? If it isnt its my own fault for listening properly and not Melanies at all. This is why i have said i was going to chat more in depth about this with her hopefully early next week when i get a go ahead on the IVA proposal by yourself.

Regards

Dan

[David Mond]

Well, on your current figures and if in year 5 of your IVA there is no value to your 85% interest in the property or such works out at 5,000 pounds or less - it will not affect you.

Visit

http://www.insolvency.gov.uk/insolvency ... gislation/ policychange/foum2007/The Simple Consumer IVA Protocol.doc

and you can read in clauses 9.1 onwards all about this.

[dand]

Crikey!

I cant believe how much help and support you experts are willing to give! At the weekend non the less. I cant even get hold of my bank at wekends! (saying that, its probably a good point!)

The reason this got me thinking David is because i have been going back through the "Equity release" forums, and quite a few people have been confused. I have noticed however, that most of these were people who hs IVA's pre Feb 2008, is this when the new legislation came in?

Thanks a million.

[David Mond]

It was not new legislation but an agreed protocol accross the board. Good luck

[dand]

sorry, cant get that link working

[David Mond]

I know - note you need to add the missing part of it into your browser

[David Mond]

policychange/foum2007/The Simple Consumer IVA Protocol.doc

[MelanieGiles]

I shall look forward to talking you through this in person next week.

[dand]

Cant wait Melanie!

Point 9.1 states that if the debtor cannot obtain a remortgage, the term will increase by 12 months. Does this mean that the valuation will have to go ahead again after these 12 months, or is the IVA then concluded? and also is this only for cases in which there is no chance of having any equity? i ask because in point 9.3, (Sorry to keep bothering you) it states that if there is less than 5k equity during this last phase, the IVA concludes at 5 years. is this correct?

[David Mond]

If there was no equity at the start and non at end then no extra 12 months of payments.

[dand]

Thats me getting carried away!

Ill let you discuss with me next week Melanie. (early in the week hopefully as im on hols next week and would like to use as much time as poss concentrating on this and getting paperwork etc sorted)

Kindest regards

Dan

[dand]

David and Melanie,

Thank you both very much for your valuable time.

Hugely appreciated.

Dan

[ivas4us]

Dan,
I don't know what we would do without David and Melanie on this site. They certainly make you feel much better every time they reply