This is quite a specific query, but I'm just into the final year of my IVA and have an equity release clause that I'll re-mortgage to raise an 18k lump sum this year. Problem is though that I am in a shared ownership agreement as my flat was bought through an equity loan scheme with a housing association. I don't pay them rent, but they gave me a lump sum as a down payment on my first property, and in return they would recieve a proportion of any equity should I sell. This was factored in to the original agreement - at the time I had 18k equity in my own right in the property so it seemed like a feasible proposal.
I looked into getting an early settelement for the IVA a couple of years ago - before the credit crunch - but found that mortgage companies wouldn't touch it with the shared ownership as well as dodgy credit history. I'm convinced that I'm not going to be able to find anyone that'll let me remortgage. Does anyone know whether there are companies that will do loans to IVA holders as an alternative to re-mortgage?
My IP did suggest that I could make payments for a further 12 months after the initial 60, but didn't say what happens after that - do you then have to raise the remainder of your equity through loan/remortgage?
Any advice would be fab as I can feel the old anxiety coming back.
I've just found this forum - it is SO wonderful to be able to see such good advice and to get & give support to others in the same boat. I have told no-one about my IVA - for 4 years now only me & my IP know. I was just so embarressed to have got so out of my depth with money. Glad I've found this forum now.[:)]
The answer to this will lie in your proposal - ie what will happen if you cannot raise the money? If you cannot raise the money, your IP is likely to need to go back to creditors to ascertain their wishes. An extension for a further 12 months payments may be an option, and at the end of that there would be no need to look to raise any other funding.
You will struggle to find anyone to lend to a person in an IVA with a shared ownership property, and creditors will not expect you to sell. So if you have a bit of equity in the property, but just cannot access it - as many people are in the same boat at the moment - this could actually work to your advantage.
Yes, I agree with Melanie. You need to see what it says in your proposal and/or modifications (if any) and subject to that your IVA might be concluded after month 60 or need to be extended for no more than 12 months - your IP will advise you.Good luck and let us know what your proposal/modifications says or what your IP says here please.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Thank you both for such speedy replies - I'm very grateful. The proposal says that 'if the funds can not be paid as a single lump sum, at the discretion of the supervisor the arrangement can be extended to allow an equivalent sum to be paid by way of ongoing contributions for a period of up to twleve months'.
So then that's it? I really hadn't realised that the extra year would be instead of the equity release. I'd interpreted it that you'd got a year to raise the whole agreed sum, which in my case (£18k) could only be done through borrowing. Would my monthly contributions remain the same (subject to affordability etc)? At the moment I pay £700 per month, but that would only make £8400 over 12 months.
Hi
It is common knowledge that it is impossible to raise funds from a shared ownership property so it will come as no surprise to both your creditors or your IP.
It has really done you a favour as paying into your IVA for another year is far better than the 18k equity release.
Regards
Is the lump sum fixed or is it negotiable? Maybe you could do a variation if it is not fixed and base it on current value. If the current value (your share) is nil or only small then my reading of the clause would be that you only pay that new lump sum over 12 months.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Dave I'm not sure what you mean. I think the sum is fixed and 18k is probably about right in terms of the current value of my own equity (the value of the flat has gone up since the valuation in year 1, then dipped a bit but still higher than it was.) But I'm not in a position to pay £1500 per month for the extra year, I'd probably raise best part of £9k that way. I think what the other IPs are saying is that the rest of the lump sum would effectively be written off, which would indeed mean that the situation would have done me a favour.
Thanks cakemonster (please don't call me Dave - I cringe when that happens [:(] - not upset with you though [:)]) - whether your Supervisor agrees it that way without re-course to creditors will work in your favour. Howver I like Melanie would seek creditors approval.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Oops sorry, David - I think I'd got baffled by your name and Andy Davie above. People abbreviate my name all the time and I don't like it either (I wasn't actually christened Cake Monster - It's a title I've won through sheer hard work [;)]).
What would I need to do to seek creditors approval? Do you think they'd accept 12x&700 instead of £18k?
Possibly - why don't you discuss with your IP and see what he/she thinks.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
