www.iva.co.uk

My husband and I both have IVAS and are at month 54. The house is valued at £125,000 and mortgage is £108,500, so our supervisor have said there is no re-mortgage requirement but we still have to pay an additional 12 payments. They have taken the difference between value and mortgage and then calculated 85% of equity value and said we either have to raise TP funds for this amount or pay the extra payments. As our LTV is over 85% this does not seem fair. Can I have your opinions please.

Doesn't sound very different but your proposal wording is key. Some do say 85% of equity. What exactly does your proposal say and has it ever been modified?

Bear in mind that is between both of you. You won't be able to remortgage but the extra 12 months has to be better.

Hi the modification reads as follows:

Six months prior to the expiry of the IVA there should be an attempt to release the debtor's net worth in the property. The review date would normally be after month 54, unless the IVA has been extended for any reason. However, where the debtor is unable to remortgage, the supervisor will have the discretion to consider accepting one of the following alternative proposals:1)a third party sum equilavent to 85%of the value of the debtors interest in the property or 2)12 additional monthly contributions.

It's the fact that our LTV is over 85% that I don't understand why we have to make any additional payments.

I don't think it sounds fair but it's probably down to some ambiguous wording on your proposal. If your iva was written under the 2010 protocol and there are no modifications regarding the equity on your chairmans report, you should challenge your IP on this. If you look at the debtcamel website it will explain the equity release under the 2010 protocol. I was in exactly the same situation as you but after a couple of phone calls my IP agreed to end the iva on month 60. We're you referred to your IP or did you go directly to them.?

Just noticed that your last post says that you had a modification. Mine didn't so not exactly the same situation as me.

"a third party sum equilavent to 85%of the value of the debtors interest in the property " is exactly what they are asking for and, in accepting the modification, you agreed to offer. The modification has overridden the usual 85% LTV limitations.

Hi I agree with Foggy - I'm afraid on the face of it the modifications are that if you have to introduce your 'net worth' in the property into the IVA - their from 3rd party funds or failing which an extension is required.

The only way to potential dispute this is to get a solicitor involved to see if they can challenge the legality of the modification and whether it is legally binding.