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Hi All,

Has anyone managed to agree a full and final settlement when they have the '4th year equity release' in the arrangement, just planning an offer of a full and final but wondering how much to include in respect of the equity. Property currently valued at £152,000 current mortgage £130,000. Only 2 years into IVA so potential for further increase in property value and small reduction in mortgage balance.

Does 4th year equity release mean that at the start of the 4th year I should remortgage immediately and therefore pay reduced contributions given the increased mortgage for two years or is it more likely that the remortgage will take place towards the end of the 4th year and I will only pay reduced contributions for the final year.

My IP charges £20 plus VAT per month to administer the fund, obviously this will be saved and I will allow for this when offering a settlement but will any other fees be reduced, there were two lots of £1750 plus VAT charged at the beginning for myself and my wifes IVA's as it is being dealt with together, will these fees be reduced if the term is cut short?

I look forward to hearing any responses.

Many thanks for your time.

DM

Hi
I believe that the equity is released towards the end of the fourth year and you will pay reduced contributions.
The figures of £1750 are nominee fees for setting up your respective IVAs and you would not receive a rebate from these figures if you do manage to settle early.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Any criteria to follow when pedicting how much equity will be available vs how much my mortgage payment will incease? If current value is £152,000 should I assume it will be worth closer to £160,000 in two years and assuming i can only get a mortgage with a LTV of 85% and my mortgage balance may be down to £128,000 does that mean i would be required to pay over £8000? (160k x 85%)-£128k?

DM

Hi
Yes that calculation is correct,however it is only your part of the equity that is taken into account[not your partners if jointly owned and they are not in an IVA]
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

I think that you will struggle to persuade creditors to accept an early settlement now, if they have the benefit of ongoing contributions and an equity release in two years time when property may well have increased in value further and your mortgage reduced (if you are paying on a repayment basis).

However, if there is any specific reason for the early settlement - ie you are struggling to make the payments due to a change in circumstances, you may enjoy more success. Discuss this with your IP before you get your hopes up too high.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk