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Hi reading the terms of my IVA...
A third party sum equivalent to 85% of the value of debtors interest in the property or 12 additional payments.
Who Is 3rd party?? A secured loan???

Anybody other than you or the creditors. Up to now proposals usually said remortgage or 12 payments, but, as remortgages are now impossible to get, they have amended the wording to encompass a "third party", which, yes, could be a secured loan.

Hi thanks for reply.. So no point entering an IVA then? Pay 60 payments to IVA firm which would take a hefty chunk in fees. After that take a secured loan to pay outstanding debt off. Firms making a lot of money from other peoples stress and misery....

If I knew then what I know now I would of stayed in DMP. The problem is when in DMP they tell you be better off entering an IVA. In my opinion definitely that is not the case.

Mal, what you need to do, if an IVA is the way to go, is to chose a firm that doesn't use the new protocol and then hope that creditors don't amend the equity clause at the meeting.

This is all new to me. Didn't even think about it. Just assumed that they would ask for remortgage at month 54 or whatever it is and then if not able, extend the iva by six months. I think I had better look through my paperwork that I just signed, again!

NEVER assume anything these days Sonj. Protocols have changed and, in any case, different IP's use different versions, if at all.

'A third party sum equivalent to 85% of the value of debtors interest in the property or 12 additional payments.'

This has nothing to do with remortgaging or secured loans and no mention is made of loan to value. This means that if the property is valued at 100k and the mortgage is 95k then [assuming property only owned by Mal] the interest is 5k. Mal would introduce £4250 or the IVA would be extended.

In most IVAs properties such as this would be excluded but the condition in Mal's IVA refers to the 'interest' in the property which is the entire equity.

I am not convinced, Michael. Of course, all depends upon the wording around the quote, which, taken in isolation means little. However, the reference to "third party sum" opens up the avenues for sourcing equity release somewhat.

No doubt a secured loan would be acceptable under this condition but what I mean is that even with a little bit of equity Mal will have to extend.

Most IVAs talk of equity release at 85% loan to value but this states that 85% 'of his interest' must be introduced otherwise the IVA is to extend. This would mean every IVA has to be extended unless there is negative equity or the client can raise other funds.

I hope this type of condition is a rarity as it penalises those with very little equity.

Ah, I see where you are coming from

`Third party sum` makes no mention or inference of any borrowing.

Does it not mean if you are unable to remortgage, then if a relative or friend, etc.. were to give you access to funds equal to 85% LTV, then this could be acceptable to your IP rather than a twelve month extension?,

If this were not possible then it would be the twelve month extension.

Goosed. It does not mention anything about a remortgage or loan to value. Clearly the creditor or IP knows that a remortgage is unlikely so wants the funds from a third party such as family or the IVA gets extended. This is fine but it refers to the entire equity and not at 85% LTV.

interesting post, devil in the detail as they say!

...This issue was raised a little while ago here:

http://www.iva.co.uk/forum/topic.asp?TO ... hird+party

Consensus then from the experts was that a 'secured loan' is not a 'Third Party Sum' (I too thought the same as the OP initially).

When you think about it: If IP's could legally require secured loan lending at equity release time using pre-2014 protocol terms, then it would not have been necessary to make specific reference to 'secured loans' in the 2014 protocol.

Hi thanks for reply, I'm starting my 5th year getting nervous about it all now as I have 90k equity in my property.