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what if i get an iva agreement and then a couple of years down the line the equity in my home significantly increases and i sell the property. Does the the money made on the sale go to my creditors ?

Hi Sam
I think you will need the epress permission from your IP to sell your home and i believe the money then will be deemed as a windfall and go to your creditors with the exeption of maybe moving costs and relocation fees.

Hi Skint thanks for that info. Just a further question on that if I may? - do the creditors take up to the agreement amount of the IVA or if there is now more equity do they take up to the original debt amount?

I think if that was the case , they would want as close to the original debt as possible.

Hi

I have done this one so I can give you the answer!

Basically you need to check the wording of your IVA!

If there is a clause where it states that in the opinion of your IP that there are sufficient funds to pay off your creditors in full plus (this is the nasty one!) and statutory interest then your IP must recover the funds from you.

Basically you need to find how much you will have when you sell your property and see how much you have to pay your creditors. Then you will need to obtain the statutory interest figure.

Basically I would suggest that you ask your IP for a settlement figure. I would be interested to see what figure he comes back and then take it from there!

I have a vested interest in this area!

Perhaps you could proviuide us with some more info as to how much you expect to raise from your sale and the amount you owed when you went into the IVA.

I managed to vary the statutory interest as it would have left us with little funds and Melanie was brillant in advising me over this sad unfortunate experience!

Please do come back!

Good Luck

Welcome to the Forum Sam,

In an IVA the individual must pay back to the creditors as much as possible. For some people this 100p/£ plus I.P fees.

Check your terms and conditions because if you have a house, you will more than likely have a 4th year clause which states that in this year a valuation will be done to see how much equity is in your house, then you may have to re-mortgage.

Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

Obviously it would be preferable to remortgage and given that the housing market might deteriorate over the next few years it might be a better option!

Once you are in an IVA are you allowed to remortgage - to swap more of a fixed loan to interest only for instance? This would help with morgage rate increses for people I'm sure.What I don't understand is why you would be allowed to do this as surely it would interfere with the amount of money available for equity release in year 4? Confused - but then I usually am by all of this!

It's fairly commonplace for remortgages to take place during IVA's. This might result, for example, from the end of a fixed/discounted period and the increased cost involved in going onto the lenders Standard Variable Rate.

It might also present an opportunity to switch from a repayment basis to interest only and potentially reduce the monthly cost (though of course the balance of the mortgage would not reduce if this were done).

Another reason might be that a better deal is available due to credit status. If someone had taken out a mortgage prior to entering an IVA (and during serious credit difficulties) it's possible that the rate would be higher than that available for an individual who has conducted their IVA well for a year or two since that difficulty.

It would be wise to speak to your IP first and then find an independent mortgage broker who specialises in mortgages where credit difficulties do or have existed.

The impact on the Year 4 remortgage would only be for any associated remortgaging fees (so long as the new mortgage is for no more than the old one).

Andrew Graveson
Bright Oak
andrew@brightoak.co.uk
www.brightoak.co.uk

Kah

With permission of your IP / creditors you will be able to remortgage anytime during your IVA (including day one). You will only be eligible for a mortgage product if your IVA has been conducted satisfactorily.

Most people only remortgtage in the first threes of an IVA to reduce their payments (in which case they will only remortgage for the outstanding original mortgage amount) and move from a heavy adverse (higher rates) product to a sub prime mortgage product, when their original fixed rate ends. Their equity in the property will only be slightly affected.

Some people are able to remortgage to offer a full and final settlement to the IVA when sufficient equity has built up on their property. I have known for instance, people to buy houses whilst in an IVA then, before the IVA is up, remortgage and settle the IVA.

Then obviously you have the four year clause…. An IP expert can explain that one better than me…


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Sam
To answer your question,only if your property equity forms part of the IVA,and most do.If your house is excluded then your equity is yours to keep or do as you wish.If you sell up you can use this equity to offer a full and final settlement.However,as i,ve said,your equity will almost certainly form part of your IVA.
regards


Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Andy

A technical question!

If someone was to sell their property and had enough funds to make a 100% dividend to creditors and their is a clause in the IVA to state that there are sufficient funds to clear the IVA then surely that would overide the equity release?

Just interested in your thoughts on this one!

Regards

Ray

Hi
If you can offer 100% plus IP fees and statutory interst then this is the maximum that you can pay into your IVA.So if you are in a position to do this the equity clause is immaterial.
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Ray

As I understand it, if there is 100% in the property and a F & F is offered, then it stands to reason that the IVA would then be satisfactorily completed and therefore the equity release would then be null and void.

If I am incorrect, then I am sure someone will be along to correct me.

Sue

Ho Hum! Think I'll bang my drum!

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