www.iva.co.uk

hi, well my wife and i have been in an iva for 13 months now.today we received our first statement. my question is the bit about the equity release after 4 years. i do remember a bit about it at the beginning, but we were just so relieved with it being accepted i didnt look at the after effects till now. what is the likely hood of after the 4 years we will have to release god knows how much and do we have any choice in the matter. many thanks dave

Hi! Congrats on making it through your first year! You will need to try and release equity according to the terms of your proposal. At the moment it is near impossible to release equity and I haven't heard of anyone getting a re-mortgage in a long time...but you just don't know how the mortgage market will be in three years time. x

Hi and welcome.

Dependent upon what your paperworks says, you will normally only be expected to release 85% LTV and your payments should not be more than 50% of your IVA payments.

As BOL says, you are unlikely to be able to remortgage so your IVA will probably continue on for a further twelve months.

How much equity do you currently have?

Paul

Be aware, some company's are now suggesting taking out a secured loan to pay the equity instead of a 12 month extension.

hi all and thanks for the replies, we currently have about £20k in equity at a rough estimate. the house i suppose could do with a new bathroom and maybe kitchen, but not critical and are still in ok nick. so given that it may be difficult to re-mortgage the best thing to do is not add value to the house. i really wish i had researched the iva better, but we were so relieved to have a light at the end of the tunnel, it seemed the perfect solution. if anyone is about to go into an iva please please please do a lot of research and be 100% sure that its for you.

I think anyone with significant equity should be especially careful about getting advice prior to signing up to an iva.

Paul

Ultimately debt management does not protect equity as creditors can secure their debt and bankruptcy will lead to the loss of equity and possibly the home. At least an IVA addresses the equity without need for a sale and offers legal protection so whether it is a remortgage, secured loan or an extension it is in line with affordability and protects your home.

hello again, now the next part of my question. i was recently involved in an accident at work which resulted in me being of work for 6 weeks, nothing major just a bit whiplash and bruising. in the past i know a couple of people have had an offer from the company to settle out of court so to speak. i dont know if this will happen to me, but should i make a claim, can my creditors take any or all of it and do i have to inform my I.P provider. any info on this will be really helpful. cheers Dave.hf

It depends upon what the payout is for - you will need to check with your IP if you do get an offer.

Pain and suffering is usually exempt whereas loss of earnings would be captured by the IVA. You could consider using some or all of the exempt part to offer a full and final settlement.

thanks for that. i did'nt actually lose any earnings apart from my regular overtime, i.e. i was paid my flat weekly wages. guess i will see what happens. many thanks dave

I find it unbelievable that this very important issue was not fully discussed with you Dave, or that your IP did not make sure that you fully understood the equity release provision. It is perhaps one of the most important things to ensure clients understand, not something to be swept under the carpet.