4th Year Equity Release

[Sensible77]

Further to my earlier post http://iva.co.uk/forum/topic.asp?TOPIC_ID=31930

I have received the redemption figures for the mortgage and secured loan. A local estate agent is coming to value the house shortly and they’ve confirmed that it will be at no charge, so that’s a relief! I told them that I was interested in what the house value is and didn’t need to say anything else, so I didn’t lie.
I’ve got a very good idea of what the house will sell for so based on these figures, my share of the equity will be approximately £20,000. As it seems unlikely that I’ll be able to raise this money by way of remortgage, the standard alternative is to pay an extra 12 months payments, subject to creditor’s agreement. However, an extra 12 months payments will be £7440, far less than £20,000 and I assume PayPlan will charge a fee for administering the extra 12 months, thus reducing the creditors return even further. I suspect, and PayPlan can’t confirm exactly what the creditors will want to do, but an extra 24 payment may be required or they may even require me to sell the house to raise the equity.
PayPlan have recommended leaving the remortgage for another 12 months but then there will probably be more equity in the property. Being left in limbo is really difficult to deal with but I can’t see any other way that this can be done.

[Sensible77]

I think it's unreasonable that you can be left in this situation. The various actions that can be taken, should you not be able to raise the equity, should be confirmed at the proposal time of the IVA. It's like being convicted of a crime but not being sentenced until 5 years later! I understand that protocol IVA's are more definitive in this area, but mine isn't protocol compliant. The possibility that I could have to sell my home to raise the equity goes against what I understood IVA’s would prevent, but it is a real possibility.

[plasticdaft]

Read your proposal and you may find it states that the IVA can be extended by 12 months to allow payment in lieu of equity. They should not be allowed to keep pushing the IVA length on and on like that.

Paul

[plasticdaft]

Just re read your first post and you will find that the 12 month extenion in lieu of equity release will mean that no further valuation is carried out in 12 months time and any equity in your property will be yours to keep. You will have fulfilled your part of the agreement with creditors in that you have tried to release the equity,and made 12 extra months of contributions due to equity not being reachable.

Paul

[Adam Davies]

Hi
I think it is safe to say that your IVA will be extended by 12 months and then your IVA will conclude.
Regards

[Sensible77]

Thanks for your responses. The 12 month extension is not guaranteed as it is at the discretion if the creditors. My Chairman's Report states: “Should the debtor be unable to realise his share of the equity in the property by way of a remortgage, 12 additional monthly contributions shall be made, providing that the supervisor has first written to creditors to ensure that there are no objections.”


It’s the potential objections that concern me, especially as a 12 month extension will not realise even half of the potential equity. I’m probably worrying unnecessarily, but it’s the lack of clarity that bothers me.

[plasticdaft]

Whilst not crystal clear its a safe bet that as Andy says your creditors will agree to 12 months extra payments instead of equity.

Works out better for you as a remortgage at costly sub prime rates(if anyone would touch you)could be far more expensive in the long run.

Paul

[Sensible77]

12 months extra payments will be far preferable than releasing the equity and paying a daft interest rate over a long period of time. Fingers crossed!

[Shining]

I think a lot of us will be taking the 12 monthly payment route to conclude the IVA x

[Sensible77]

Thanks for all your replies. What really disappoints me is PayPlan's vague answers to my queries. I don't feel that my case worker understands what I'm asking and doesn’t appreciate the anxiety this can cause. When I asked why I should pretend to be selling my house to get a free valuation, the reply was “I don’t know, I’m not in an IVA.” That was a ridiculous answer and by then the conversation was getting quite strained. The case worker also said that if I couldn’t get a free valuation then I would need to use my contingency fund to pay for one. As you can see from Melanie Giles’s reply to this in my previous post, that was a load of rubbish. Anyhow, I will send the redemption figures and valuation to PayPlan and take it from there.