www.iva.co.uk

So Payplan have written to me today to advise that my IVA will be extended as the equity in my property is less than £5k. I thought that the IVA concluded if this was the case?

Could someone please take a look and see if I am being taken for a ride here, as i called them to discuss and they didn't want to know!


"As per your chairman’s report ii) if you are unable to re-mortgage or your amount to achieve is 85 percent is under £5,000.00 you would need to look at;
1) a third party sum equivalent to 85% of the value of the debtor's interest in the property; or 2) 12 additional monthly contributions

Please see below the calculations.

Valuation: £145,000.00
Mortgage Redemption: £118,686.36
Secured Loan Redemption: £n/a
Clients 100% Share of Equity £13,156.82
Clients 85% Equitable Interest £11,183.30
Current LTV Borrowings: 81.9 PCT.
Currently under 85% LTV - Amount to achieve 85% LTV £4,563.64
Client needs to attempt to re-mortgage for £2,281.82



What my chairman report actually says is the following:-

The amount of money introduced into the arrangement will be the mortgage proceeds less the costs of the remortgage, including any costs to redeem any existing mortgage and/or secured loan. If the amount of the debtor¿s net worth net of remortgage costs in the home at the review date is under £5k, it is considered de minimis, and does not have to be released, and there will be no adjustment to the IVA term. The monthly payments arising from the remortgage will be deducted from the contribution. If the increased cost in the mortgage means that monthly contributions to creditors fall below £50 per month, such monthly contributions are stopped,

I would agree that equity is de minimis and no extension should be applied.

Thanks foggy. Ironically what they have said to me completely contradicts what is on their own website, and so I will be contacting them for an explanation. Seems Payplan are making up the rules as they go along...and not for the 1st time!

Best of luck - hope they sort this for you quickly.

Stick to your guns with Payplan - it worked for me.

Could some one please explain to me what Net worth of property is and how it is calculated?

After going back to payplan to ask for an explanation of the calculations they have said my chairmans report states I need to release the debtors net worth in the property, which they are calculating as £11,183.30 (85% of £13,156.82).

This is not the way I have seen others have equity calculated and TBH they are becoming very rude and don't want to help of explain things easily.

It is normally 85% loan to value. You should not have to remortgage if your equity is less than £5000 and if you do have to do that your repayments should not be more than 50% of your mortgage payments if I remember correctly.

If you haven't already done so, can you post your chairmans report in respect of this?

Your wording of the Chairman's report, above, CAN be interpreted this way, if your quote was verbatim. However, this is contrary to the spirit of the Protocols, if your IVA purports to be Protocol Compliant and Paypal have backed down in the past when challenged. Unfortunately, if push comes to shove, the Chairman's Report wording is the one that counts.