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Hi my husband and I are both entering our 4th year of our IVA. when we first took out the IVA we were told that we had to change our mortgage from a Repayment to Interest only mortgage. This means that for the last 4 years we have not managed to reduce our mortgage. We were also told that we had to release £20,000 to the creditors in year 4/5 of the IVA. However with house prices dropping this may not be possible. Also if we did have enough equity to release this sum how would we be able to re mortgage our property with a very poor credit rating? My husband is 56 and I am 48, so we are going to be left with a £158,000 mortgage ( as it stands at the moment) to pay back in very little time? In effect we will never be able to repay our mortgage! What happens now?

Hi TC

I am also in the same boat as yourself, I have been told via this forum that you wont be able to re-mortgage no one will touch you, but you will still have to apply to at least 2-3 mortgage lenders, apparently it doesnt matter who, you have to go through the motions of applying and getting the refusal letters, these are then sent to your IP. worst case scenario is that your IVA has to rum for a further twelve months after your 5 years.

It is highly unlikely that you will be able to remortgage, more likely that you will carry on for an extra 12 months in lieu of that equity.

We're entering out 4th year of our IVA after Christmas and will be looking to my IP for guidance.

Speak with your IP it may be that the 12 month extension will apply and then you'll be debt free. x

I agree with lesley - chat with your IP and see if the 12 month extension is viable to conclude your IVA. I know you had been focused on the 5 year term, but an extra 12 months will soon go quick !

what happens will depend on the terms of your IVA proposal. It's likely that creditors would accept a 12 month extension in lieu of equity but it may be worth chancing your arm and asking your creditors to exclude the property completely. Some of Varden nuttalls clients have been successful in this regard, especially with circumstances such as yours and a large mortgage to repay Ian short time.

This is where people taking out an IVA need to be realistic. If you are going to struggle to repay a mortgage after an IVA then is there any point in not going bankrupt rather than being forced onto an interest only deal with no real plan of how to repay the capital?

Paul