can equity release be enforced without the RX form

[thespian]

Hi there,
I am currently on an IVA through Clear Start and have been for just over a year. My mortgage (100% payment record) 2 year deal is due to end in Aug 08 and I dont want to sell the house yet but keen to get a better deal on the mortgage/new rate etc. I assume that my mortgage provider doesnt know (yet) I'm under an IVA but when they come to do a new mortgage deal will they then credit check etc and find out that I am and potentially refuse me a new rate - then what - refuse to mortgage me at all? Also, I split from my partner - who lives in 'my' house about the same time as I took out the IVA - I live elsewhere. She refused to sign the RX1 form for the Land Registry in order for me to release equity at the end of the IVA, Clear Start have not asked for it since! Therefore since the IVA is well underway etc can they enforce the equity release without the RX form etc?
Many thanks!

[Reviva UK]

Hello thespian

The RX1 form doesn't give them the right to take the equity in year 4 it is really a log at land registry advising anyone that before a mortgage / other charge that they need to be told because they have an interest in the property.

You have already legally agreed to the year 4 clause by virtue of the fact that you have signed and accepted the conditions in the IVA. If you remortgage / or borrow against the house without the express permission of the supervisor you would be breaking the terms of the IVA and this could result in extremely serious consequences ( i.e. br )

Your best bet to get a mortgage deal is to ask your current provider to put you on a different product with them. They may not do a credit check and therefore may just swap you to another fixed deal

[abc]

You will be better speaking to an independent financial advisor regarding your remortgage options. You will be best in obtaining your Supervisors approval to the remortgage as it is considered obtaining new credit although it is replacing the old mortgage. My understanding is that your current mortgage provider will credit score you on the new application. However, mortgages are different to credit cards as they assess you ability to repay the mortgage.

If the property is in joint names with your partner, you will need to obtain your partners permission too. If you have seperated you might want to get your partners agreement to be removed from the mortgage and land reg.

Regardless whether you have signed the RX1, you will need to deal with the equity as set out in your proposal. Technically, your Supervisor could fail your IVA for not signing and returning the RX1 if that is a provision in your proposal as this could be classed as non cooperation with your Supervisor.

[thespian]

Hi,
Thanks for the replies - very useful. I am keen to stick to Nationwide my current provider for a number of reasons, I assume that given my payment record with them a new deal will make life easier - and I will speak to the IVA supervisor - I dont intend to take any money out of the property and just switch to a new deal.
Secondly - what exactly happens when an IVA fails - should it happen? I ask as I had an IVA back in 1998 which failed when I was sent to prison (wrongly convicted, white collar crime etc, another story) for 9 months - I was told the IVA had failed but didnt hear another thing from any of the creditors and assume they wrote off the debts, I was surprised! Is the normal approach creditors writing to you directly again demanding monies or threatening bankrupcy or do they often write them off?
Thanks

[Adam Davies]

Hi
I think that in most cases the creditor will pass the debt onto a third party to collect and would be surprised if it was written off,however if you have not heard anything for six years then it could be unenforcable under statute laws.
Was any of the debt from the first IVA ncluded in your present IVA and were ClearStart aware of your first failed IVA ?
Regards

[go_4_broke]

Hi Thespian

I think if your IVA fails your supervisor can make you bankrupt, indeed they are obliged to do so, but only if there is a realistsic prospect of generating a return for creditors. Failing that it is up to individual creditors to decide and I wouldn't be surpised if at least a few didn't give it up as a bad job, notwithstanding Andy's comments above. After all if it has been decided not to make you bankrupt you clearly have no worthwhile assets, meaning few routes are open to them to effect any recovery.

Best Regards

[MelanieGiles]

Supervisors are only obliged to make debtors bankrupt if this is a specific requirement of the IVA proposal - which these days is actually quite rare. Creditors do not want debtors from failed IVAs to be bankrupt, as they would prefer to pursue them directly in the hope of a larger return.

If the property is not jointly owned, then your partner would not have needed to sign the RX1 un the first place, although I am suprised that this has not been followed up by your IP.