I am new to this forum although I am now in month 55 of what started out originally as a 60 month IVA. I have heard recently that I shall not be able to raise the equity required (£35,000) to complete my IVA this summer - no-one is in the mood to offer remortgages at the moment, so it seems. My IP has therefore asked me for a letter of authority so that they can approach my creditors to discuss the issue. I have looked at my Chairman's report, and my original proposals, and have been reminded thereby that my creditors inserted a modification to the effect that the IVA would be deemed 'in default' unless they secured a minimum dividend of 52 pence in the pound. Now that I am unable to supply the equity, there is no way that I can achieve that minimum dividend. Can they / are they likely to insist that it is achieved in the long-term and seek to extend my arrangement for several years until it finally is paid up to that mark through monthly payments? Or will they more likely keep to the stipulation that is mentioned, also in my Chairman's report, to the effect that, in the event of my being unable to re-mortgage, '12 additional monthly contributions shall be made, providing that the supervisor has first written to the creditors to ensure that there are no objections'? I have never missed a payment and have complied down the line with the IVA throughout. That said, I can't stand the thought of it lasting more than another eighteeen months or so - and I am confused and worried by this evident ambiguity / contradiction contained in my Chairman's report. Can anyone please shed any light on this by dint of expert knowledge / similar experience?? Thank you in anticipation.
It's in your original terms that if you are unable to remortgage then an additional 12 months will be payable. I cannot see any of your creditors having any objections to this as it seems to be the general rule at the moment for this situation.
Minseito ... our minimum dividend was 71p in the pound.. unable to re-mortgage. When the variation meeting was called to sort out the process in lieu of equity, an extension for 12 months was approved and the minimum dividend waived with a new value of 50p in the pound expected. The amount we ended up paying was £20k less than we would have paid had we been able to re-mortgage. I think most creditors will aggree to 12 months extension in lieu of equity. We were due to release £34k equity and ended up paying £10k over the 12 months extension. By extending the 12 months we fulfilled the requirements of the variation proposal and no further action was required by us.
Thanks you very much indeed for the advice. That sounds reassuring. On the other hand, do you think it likely that they will seek to up the payments? I can only just about afford the regular payment of £760 per month as it stands. not least as both my wife and I have just had pay cuts and the utilities bills have increased - along with price increases in food and fuel. As public service workers we are unlikely to get any substantial - or indeed any - salary increase in the foreseeable future to meet these changed conditions. As far as I understand it, the IVA requires you only to pay what you can reasonably afford. Like everyone else, I want to pay back as much as I can, but if the creditors want to increase the payments in the final additional year then I shall not be able to do that. In exceptional circumstances can the IVA be extended beyond 72 months? Or is the stipulation in my Chairman's report about a further 12 months in the event that the equity cannot be raised effectively binding and thus the end of the matter? Sorry for all the questions, but this is throwing me a bit at the moment.
Despite all efforts people are just not getting remortgages at the moment and its through no fault of your own. Due to this most creditors thus far have taken the 12 months extra as compensation. The longest term for an IVA is 7 years but when your IP puts forward the 12 month extension get them to look at the minimum return expectancy and get it put in as a variation to lower it. They can't make you pay more if you can't afford it that is the whole idea of income and expenditure to identify disposable income so you can afford it. Keep us updated how you get on
Actually Dave, there is no maximum term for an IVA. Mel had one which was over 17 years.
They are more usually over 5/6 years though.
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
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
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
I've written to my IP asking him to explain, if possible, the evident contadiction between the two modifications in the Chairman's report. To my mind, if the creditors have accepted, as it clearly implies that they have in the modifications, that if I fail to secure a remortgage then I will be required to continue paying into the IVA for another 12 months, then that should be that. Lol, I hope it's not just wishful thinking!
It certainly seems logical to me Minseito the only clause that can be grey is where it says subject to no creditors objections. Keep us updated and god luck I am sure it will be fine
I think you should be ok. When we were asked to extend, we were just told to keep the payments the same as year 5, we didn't even have a review. The creditors are used to allowing a 12 month extension in lieu of equity. I remember panicking about this and kept asking if they could extend the IVA again, I was always re-assured that the extention was for 12 months and that's that. If an extension is propsed, then you should get a copy of the proposed variation to approve before it goes to the creditors, so you will know what is being propsed beforehand.
