www.iva.co.uk

Hi,
I have seen alot of posts on here from people saying that they are going to have to potentially pay their IVA for 6yrs due to not being able to re-mortgage and release equity. Im under the understanding that I have to do this at year 4 and if i can't release any equity or have none I will complete at year 5 not having to do an extra year. Is there anyone else in my boat?, or am i misunderstanding something?

Hi Christabelle.

It all depends on what it says in your proposal. What happens a lot these days is that your creditors can ask for an extra year in lieu of any equity.

Something to discuss with your IP.

Thanks for your reply Kallis, so even if my proposal states what I said, i still might have to do an extension?.That is sly as that is not what the agreement was at the start of IVA. [:(]

It is possible - how long have you been in an IVA?

since october 2009

Generally, on a protocol compliant proposal, the way I understand it, is ... if there is equity over £5k this has to be released and paid into the IVA. At the moment it is nigh on impossible to release the equity, so a 12 month extension is tacked on to compensate. If the equity is below £5k then the IVA terminates at the end of year 5 as agree.

I started with the word "Generally" because proposals vary in the detail, so it all hangs on the wording of your proposal and / or Chairman's Report.

You will probably be protocal compliant then Christabelle and will have the clause.

Exactly what does it say in your proposal/chairmans report?

I am gutted!!, just read my proposal and it does state that at month 54 i will have to look into equity release by the way of a re-mortgage if it is not possible the iva may be extended......which means it will!!!.
I am absolutely gutted as I was sooo happy that I was already 18 months in but now I have gained an additional year so I might aswell be only 6 months in.Feel like this IVA will never end and that Im wishing my life and everyone elses away waiting for it to!![:(]

I seem to spend a lot of time wishing my life away too! You are still 18 months closer to being debt free and getting your life back than you were before you started this. And you can't be sure that in another three years there won't be lenders offering sub-prime mortgages again...so 5 years isn't entirely ruled out. How have you found the iva so far? x

Same here Christabel - I know I have to continue on so really I'm only just over halfway.

BOL - don't forget as well that the monthly payments on the remortgage can only be 50% of the IVA payments so that might mean a lot of people won't be able to do it even if they can get an offer.

Christabelle, please persevere, it will be worth it in the end. My IVA was extended in lieu of equity not being able to be released. I know it’s a better result financially but time seems to be standing still at the moment and I just want the next two years to go quickly like the first four have.

Mine is about to be extended too, I can understand your dissappointment I felt the same when I realised ours was going to be too!!!

Christabelle_sparkle wrote:

I am gutted!!, just read my proposal and it does state that at month 54 i will have to look into equity release by the way of a re-mortgage if it is not possible the iva may be extended......which means it will!!!.
I am absolutely gutted as I was sooo happy that I was already 18 months in but now I have gained an additional year so I might aswell be only 6 months in.Feel like this IVA will never end and that Im wishing my life and everyone elses away waiting for it to!![:(]

The key word there is "May" .... if your proposal is protocol compliant (which is likely) it will only be extended if there is sufficient equity. Please check this with your IP to save worrying over the next 4 years.

Thank you all very much for your kind words support. I have found the IVA abit of a rollacoster in a few ways really,financially, emotionally.
It does state on my proposal that if the equity at month 54 is less than £5k then the IVA will end at year 5, but if the equity is over £5k and cannot be released then the IVA will be extended. (I am currently in £8,500 negative equity, but who knows whats ahead?)

You need to sort this out with your IP Christabelle.