I'm approaching the start of my fifth year in an IVA - having had all the usual ups and downs, and no doubt still a few more along the way.
With month 54 not that far off I am already thinking about the 'equity release' - but I confess to still being a little confused and how things are likely to pan out.
My property is currently valued at £160k on Zoopla and - assuming no rise in interest rates - my remaining mortgage will be £110k.
85% of £160k is £136k so the maximum available equity is £136k minus £110K - making it £26K (I think). HOWEVER, while the IVA is in my name, I have a joint mortgage with my wife. Therefore, the maximum equity available would be half of £26k (is that right?)
So, in the unlikely event of being able to remortgage I would be expected to put £13k into the IVA (I think).
I entered my IVA with £45k debt and will - if I continue at the current rate - paid £24k into the IVA at the end of five years.
I'm guessing that the most probably outcome is a 12-month extension to the IVA?
You need to clarify this with your IP as they will know the exact wording of your IVA. However, irrespective of the amount of equity, it is extremely difficult to get a remortgage anyway so an extension looks likely.
You could consider a small secured loan to complete the IVA which would reduce your monthly payments but obviously secure the debt over a longer term. Your wife would also need to agree but it would close the IVA.
Your calculations appear to be correct scoobydooby, but do check this directly with your own IP as IVAs can be tailored to be very unique to the proposer, and as this is a very important area it is better to be 100% confirmed.
I maintain that a 12 month extension is far better than tying yourself into more secured debt, but no harm in looking at all of the options as your IP will not generally mind getting all of the money in one go.
It may be possible to make an offer of 'Full and Final' settlement early, to take account of any remaining contributions due AND the equity release clause. Many people like to do this in order to close the IVA and get some surety of outcome. There are pros and cons for this vs. a 12 month extension so you'd be best advised to at least explore your options. At least that way you can make an informed decision.
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Thanks for responses. I suppose that when the end is in sight the thought of doing a further 12 months is a bit disheartening. I am open to the idea of a small secured loan from a pragmatic point of view, however I also don’t want to saddle myself with debt for any longer than I have to.
Shaun – just to clarify – do you mean there is a possibility to offer a F&F through a secured loan before reaching month 60?
Yes, it's certainly possible and it's often beneficial to approach your IP/Creditors early because of the potential to save any remaining contributions. We've helped many people with this but it's important to weigh up your various options before you make any decision.
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Hi ,scooby dont trust the valuation on zoopla my valuation from my local estate agent came in at nearly £20.000 less based on a forced sale , than the one on zoopla.This could be the difference between that extra year and not .Marcus777
I agree with Marcus - definitely get a proper estate agent's valuation, on a forced sale basis. These can vary tremendously from on-line figures - my own house is valued at around £200k lower on Zoopla than its true value.
