Hi, My wife and I are in IVA`s they have been running for 3 years. We have a clause 4 which says that in year 4 we have to try to secure £70,000 re-mortgage to end our IVA. There is no way on earth we will be able to get any loan as our household income with full tax credits is only £17,000 a year. We have 2 children 17 and 14. When we signed up for the IVA we were told that if we cannot get the £70,000 then the IVA would end, possible 1 year extension though. Is this the case. We are worried to say the least and struggling. I am in receipt of mental disabilty tax credits and my 17 year old has M.E or worse. What is the point of struggling now for 3 more years if we are going to loose our home anyway. Thank you.
Hi and welcome. A lot of us have the equity clause to realise and in the current climate this is next to impossible. 12 months payment in lieu of equity does seem fairly commonplace at the minute. Might be worth having a word with your IP to get some case specific advice.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Bear in mind that if you get the £70,000 re-mortgage (which is unlikely) then you will have to repay this and the interest over a period in excess of the one year IVA extension. Many posters are of the opinion that the one year extension is a better option than the re-mortgage in the long term. If you are struggling maybe you should contact your IP for further advise.
Thank you both for your replies. I have contacted my ip and she said our creditors may extend our IVA`s for 2 more added years if we cannot re-mortgage for another £70,000 or make us bankrupt. The IVA company knew that we would not be able to re-mortgage when we signed up for the IVA as we already have a mortgage of £70,000 which is interest only and needs paying off in 15 years and we have no payment scheme in place. Why struggle and worry about the IVA monthly payments when probably we will loose our home anyway. We have a lot of equity in our property. If we sold we would have to pay £70,000 mortgage and £70,000 IVA leaving us £60,000, some will say great result but we dont want to loose our home, 4 of us live here.
Hi Paul and welcome to the forum your terms and conditions in your iva are case specific like Lesley says,but two years extra does seem out of the norm regardless of your equity.This should have been explained to you at the beginning of your iva,who is your IP.
I do not have it in writing, it was a 1hr 30 minute phone call to the ip and he said that he had a customer who owned a very expensive house with loads of equity and when it came to his customer trying to raise a re-mortgage he could not so the IVA was extended a year and then ended and his customers home and equity was safe. I am sorry I cannot name the ip as they told me I was making this up and I am a liar. Its my word against theirs. The ip knew I was mentally unwell and living on benefits during the time my debts (unsecured) hit £125,000 and that I was ill when entering IVA, have been seeing doctors and specialists for 15 years. They calculated all of our benefits in to the IVA. I think I was not even of sound mind when I signed, too late now though, they told me it was only option or bankruptcy. Thanks
OK -- facts or fallacies apart: In the early days of the IVA being used for personal insolvency (pre-protocol) many proposals had equity clause, rerquiring specified amounts to be paid over, with no other option. This was done, actually to protect the debtor in a rising market. When it was (incorrectly) assumed equity was a forever increasing beast, they sought to limit the equity to what was available at the start of the IVA.
However, as we all now know, this intention went somewhat off course! However, creditors generally do recognise this and many IP's are successfully putting forward variations to bring the old proposal in line with newer ones, where the amount of equity is no longer specified as a set sum and there is the fall back of a years extension in the (all too common) event they equity cannot be released.
I would suggest you couch this in flattering terms to your IP and request that he / she puts forward a variation to your creditors. It is not your IP's place to say what they would or wouldn't ask for, it is for the creditors alone to agree and / or amend your proposed variation.
There is a good chance, in today's climate, such a variation would succeed. They might come back and ask for two years (but don't offer your neck if you don't have to). There is an outside ( though unlikley) chance they will call for bankruptcy --- if that is the case at least you'd know now, rather than hanging an a knife edge.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Mrbluesky - I hope that was a tongue in cheek comment - we should not intimate that any of our posters are liars.
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
Thank you, best advice yet. I will act as you suggest and keep my fingers crossed. Hanging on a knife edge is what is doing us all in.
Thank you very much
I hope it was, but there was always a possiblity that the OP could have been very offended.
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
Kallis - totally agree...I still do not know which way to take that statement.
Paul - speak with your IP and try and gain an agreement that will keep you secure in the knowledge that your home will be safe. You have already come along way on your journey and you are reaching the back end of it now and will soon see the first glimpse of a debt free life.....your health and well being has to be an important issue in this and your IP is best placed to work with you to come to a solution that supports all parties. No one will want to see you go bankrupt having paid in for 3 years already......keep in touch !
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
