www.iva.co.uk

my head is buzzing with the iva tonight , must be cos of our 3 rd year review . we have to remortgage next year , property worth £120 k mortgage £82 k. our iva states that full resultant equity no less than 85 % . but chances are we wont get mortgage for what they would want . would we be penalised for this or would we pay another 12 months instead . the credit crunch is making me feel that our iva will fail as the creditors wont get what they want or were asking for at the start. , im probably being daft..

i would think they will extend your iva by 12 months but an expert will be along shortly

should have admitted to our debt ....£104k inc fees. paying £539 a month, so that pays back £32k during the 5 years , then they want ed the equity which 3 years ago was about 40k . with drops in house prices and availability of mortgages , i just dont want to get so far , for it all too fail.

it isnt in anyones interest to fail the iva if you cant remortgage as if the route of BR was taken the creditors would get far less than what they would have the experts will advise but in my opinion they will have to make do with the extra 12 months or risk losing thousands more have you voiced your concerns to your ip?

If you could find someone to lend you 85% loan to value, it would be likely that this would be at a very high interest rate - but this may change over the next few weeks if interest rates are reduced. This would produce the sum of £20,000 before costs.

A more realistic borrowing based on 80% loan to value, would produce £14,000 before costs, which might be possible - and if you are able to pay for an extra year instead at £6,468 then I would plump for this option.

At the end of the day it really boils down to what is required under the terms of your individual voluntary arrangements, so I would take advice from your own IP on these issues.

thanks all for your advice !

Read what your Proposal says if unable to get a re-mortgage - what are the specific words used in the proposal. As three years ago the 12 month add on if unable to re-mortgage was not universally put into IVA's- let me know what your proposal says on that point.

molly16 wrote:

my head is buzzing with the iva tonight , must be cos of our 3 rd year review . we have to remortgage next year , property worth £120 k mortgage £82 k. our iva states that full resultant equity no less than 85 % . but chances are we wont get mortgage for what they would want . would we be penalised for this or would we pay another 12 months instead . the credit crunch is making me feel that our iva will fail as the creditors wont get what they want or were asking for at the start. , im probably being daft..

Is yours along the lines of

The property is to be re-mortgaged for no less than 85% of the open market value and the debtor's equitable interest from the re-mortgage must be paid to the Supervisor before the completion of the arrangement. If the debtor is unable to obtain a re-mortgage the arrangement may be extended by twelve months in order to allow contributions in lieu of equity. Should the debtor fail to introduce funds in respect of equity this will constitute a breach of the terms of the voluntary arrangement

And then you also have clauses which state a "target" figure that must be repaid otherwise the creditors must reconvene to discuss next steps?

If so, then that's very similar to mine and has me pretty worried.

Don't be worried - if you cannot achieve the target figure, your IP ought to simply call the meeting to confirm that this sum could not be raised, but perhaps a lower sum would be possible. It is not worth thinking about until nearer the time to be honest.

Given the current economic conditions, what are the odds of an amendment to the IVA which removes the target figure.

What worries me most is spending 6 in the IVA and then being made bankrupt because I can't make the target figure...

From my reading of the IVA agreement, there is nothing stopping them doing this....

Sorry - wording a little unclear then...

What I was proposing was for me to propose a variation either removing the target figure or to confirm the conclusion of the IVA after the extra 12 months.

I was wondering what the odds were of that being accepted.

If I were to go the full 6 years and then be pulled into BC then I wouldn't be happy, so am considering whether it is worth entering BC now...

If your IVA is going well so far and you have not defaulted then why fix what's not broke?
Cross bridges IF and when you come to them. The worst probably wont even happen.

mrs skint wrote:

If your IVA is going well so far and you have not defaulted then why fix what's not broke?
Cross bridges IF and when you come to them. The worst probably wont even happen.

Unfortunately, "ought" and "probably" are not "definitely"...

My IVA has a clause that stipulates no variations / early settlement offers for 2 years. It will reach the 2 years in a few months so am doing the research now rather than later - at the 2 year point, I could declare BC and still finish earlier than if to continue the IVA - not at all what I want to do, but certainly looking a "cheaper" option as prices fall on a daily basis

FYI, If you add up all the other clauses in my IVA, should the house prices have stayed the same / risen, the target settlement and "way forward" clauses would have been redundant.

Fully realise that there's an element of "crystal ball" gazing and other issues here but am curious if there is a precedent for any of the above...

This forum is not here to provide definitive advice on your particular circumstances unfortunately, as we simply do not have sufficient information to hand to be able to properly advice. The very best advice can only come from the insolvency practitoner who is actually appointed to the specific case.

Melanie is right and without your specific details it is impossible to advise. One thing though if you do decide on BKCY then there is the possibility of an Income Payments Agreement being made that will require you to pay over about 70% of your net disposable income for 3 years.

Discuss everything with your Supervisor (IP) who will I am sure advise you correctly.