Hi all,
We are having our house valued tomorrow in preparation for a full and final payment to be offered. We have an interlocking iva and a joint mortgage, looking through our paperwork we both have a line that says 'if your share of the equity is less than £5000....' we won't need to pay an extra year.
So, as we both have that in our agreement does that mean we need more than £10000 equity?
That's how I understood it but will or IP think the same? It's going to be quite tight and will probably be irrelevant because by my guess on the valuation we will probably have less than £1000 over the £10,000!
Thank you
Hi, I'm not sure either but I think Lesley is correct.
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
Not sure how reliable this is either so best to check with your own IP and the wording in your proposal:
“Do we each get a £5,000 minimum in a joint IVA?”
Yes. You may think you have a joint IVA, but actually you have two interlocking IVAs. The result is that the calculation is done separately for each of you on your half of the house/mortgage and each calculation has a £5,000 minimum. (It is possible your IVAs are worded differently, but it would be unusual.)
Thanks Lesley - must admit it didn't apply to us as we had way too much equity so knew we would do the extra year.
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
The way that I understand it interlocking IVA's are used to mainly ensure that creditor process managed more smoothly plus one of the reasons is to reduce the level of stress between partners i.e. you are both in an IVA and know what the restrictions are etc.
This does not make you legally responsible for each others debts and you can request the interlocking arrangement to be dissolved at any stage (but the IVA company will not like you).
Because they are interlocking you are each treated in your own right and the 5k clause is applied to each of your agreements but not added together.
Some companies have been pushing an interpretation that the 5k de minimis clause only applies once because the IVA's are interlocking.
It will come down to who you are with and you should be asking them now how they interpret and apply this.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
When we set up our IVA with Mel initially she explained it was 5000 each as its stated in each agreement so as each of us have it, 10k would be required. Im sure i had it in writing from her or one of her team incase issues crop up at a later date.
he went through the full complaints procedure and escalated it to risk and compliance, they eventually agreed it is individually assessed and there was not a requirement to extend.
Remember it is not just £5k, but taking into account the LTV percentage in your agreement too.
If they say you need to extend further come bac here and post the valuation and what your agreement actually says about equity and LTV and someone will double check they have indeed done it correctly rather than in their favour.
My blog (link in signature) talks about this a bit.
My Blog details, the route I took before IVA, how I choose my firm, equity release advice (year 4-5), challenging the CRA's keeping IVA on credit file once gone from insolvency register
IVA ended August 2015. Would recommend McCambridge Duffy
