www.iva.co.uk

In my IVA, one creditor asked for an equity release in Yr5 of the IVA as a modification to the original proposal which didn't offer this (I guess due to negative equity).

So my question is what would happen in Yr5? If I am still in negative eqty or indeed can't raise the money due to no access to a mortgage, would i have to make more payments and would all creditors get this or just the one that stipulated this in the modification?

Hi, it appears to be fairly normal now to pay another 12 monthly payments in lieu of equity release, your IP will be able confirm this for you. x

Generally the clause should be worded so that only equity over £5k will trigger the equity clause. So, towards the end of the term you will have to get a valuation based on 85% LTV. If over £5k equity, you will need to remortgage to release the equity ( subject to limits on increasing your mortgage repayment levels). At the present time, this would be impossible, so, in lieu of this your term will be extended by a maximum of 12 months.

As mentioned above, if the equity is lower than £5k your IP will seek to have the equity excluded from your IVA and it will finish at the end of 60 months as originally proposed.

A good explanation by Foggy x

Thanks that's great, the term is already 69 months so really don't want another 12 on top!

Was this suggested modification actually accepted by the other creditors, and thus incorporated into your IVA contract? This should have been thoroughly discussed with you at the time, given that it represents an important impact on your family home.