4th Year Release

[Sheepylamb]

This equity release clause confuses the hell out of me to!
Our Chairmans report states
After month 54 we have to provided two valuations for remortgages etc.
85% LTV less our secured loan currently £45K - The mortgage offer must take into account the debtor's ability to afford the mortgage payments and should not exceed more than 60% of the amount of monthly contribution that the debtor is paying in to the arrangement
So can someone please explain this in simple steps for me
So house worth £200K Mortgage currently outstanding £140K (Interest only) plus £45K for secured loan - How much would I need to raise to comply with this request?
Final paragraph says that should the debtor be unable to realise his equity in this manner the supervisor must convene a general meeting of creditors to consider the debtor's options.
Thanks to anyone who understands this!!

[pbeck]

On what you've said here you will not have to remortgage the property unless house prices increase during the term of the IVA - at present they're falling.

85% of current house value is £170K, less secured loan is £125K, as the existing mortgage is £140K, this implies no equity to be released unless house prices go up again.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[Sheepylamb]

Thanks very much PBeck - So what do you think will happen given the last statement in the chairmans report about supervisor calling another meeting of creditors to discuss my options? It also states in the Chairmans report that the IVA payments are for 60 months and that all monies have to be paid over by 63 months?

Thanks again for your time

[pbeck]

The supervisor will only call a meeting if you are obliged to release equity and you don't do so, if you have no equity to release, no meeting.

63 months is to allow for any arrears, seems you're allowed a maximum of 3 months arrears before default.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[Sheepylamb]

Final paragraph says that should the debtor be unable to realise his equity in this manner the supervisor must convene a general meeting of creditors to consider the debtor's options.
Does this sentence really mean that its only if I don't co-operate? The way I read it was if we couldn't remortgage the supervisor would have to call a meeting to discuss other options instead of remortgaging? That's great news if it just means that it will end at 60 months. Thanks Pbeck

[kah]

Can you be required to pay a final year (year 6) in plave of equity release - even if there is no year 6 clause in your agreement?

[MelanieGiles]

No - but this could be suggested by way of variation.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[pbeck]

Sheepylamb.

Yes, a meeting will be called only if you have equity to realise and are unable or unwilling to do it, if at the time you are supposed to remortgage there is not enough equity - no meeting.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[Sheepylamb]

Sorry one final question about equity and proposal - Does the Chairmans report override what was put in the proposal? our proposal states that I agree to purchase the equity in my home by way of an additional 6 monthly payments of £507, therefore realising the sum of £3,042, for the benefit of my arrangement. But the chairmans report came back with modification for equity release in 4th year and it also states that Contributions will be made for a period of 60 months unless an early conclusion is agreed by creditors. The duration of the arrangement may be extended at the supervisors discretion in order to complete any final admin but creditors must receive final dividend payments within 63 months of approval unless there are payments in lieu of equity still to be introduced.
Thanks in advance

[MelanieGiles]

Yes the Chairman's Report does override what was written into the proposal - so you are stuck with the 4th year equity release provision which presumably you agreed to on the day of the creditors meeting.

[Sheepylamb]

Thanks Melanie for the response yes we did agree to the modification on the day. I was just wondering about it as per Pbeck's previous advice as there is unlikely to be equity in the house there will not be a meeting called and we won't have to release equity. My brain then jumped to does that mean we will have to pay the additional 6 months payments in lieu of equity release but from what I understand the Chairman's report would overide the proposal - So just to be clear (For me) If unable to raise equity as per previous advice above by PBeck we would just pay until the 60 months had concluded?
Thanks again

[MelanieGiles]

Philip's advice is good - but of course you cannot determine this until the specific time.

[Sheepylamb]

Thanks Melanie I didn't doubt that his advice was good - I was trying to get my head around it all and after I reread the proposal I then thought to myself does this mean that if I can't realise any equity (Obvioiusly I cannot determine that for sure until the 54 month) the proposal would then kick in with an extra 6 months payments for equity but as I have understood it the chairmans report would overide this as this says that the IVA is concluded after 60 months - Sorry to sound so thick about this but it just keeps spinning in my head!!

[MelanieGiles]

Not thick - even crusty old IPs like me often have to reread creditor modifications at least six times before they make sense!

[Sheepylamb]

Melanie I would say that you are far from old and crusty!! But thanks for the reassurance.