It does seem fine if there is no minimum dividend and you cannot obtain a remortgage. Make the offer now before they ask you to investigate a secured loan.
Others have chosen the secure loan route to end the IVA early by combining the 12 month extension with remaining payments. The plan is to them remortgage when possible, at a better rate than the secured loan and roll everything together. It does suit some, especially if they are early in their mortgage which give a good few years to absorb the loan. But they cannot be forced down this route under the old Protocol, unless their arrangements have specific clauses, individual to them.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Hi. On assumption 12 month extension applies to you then I agree with Foggy's figures that your future contributions would total £4,644. I would offer c£4k (re savings on c18 months of Administration costs etc).
Thank you for all the replies. Very much appreciated.
Lisa: I never considered a discount on the F&F due to paying earlier. I was worried about the amount of equity in my house and that they wanted £7279. Thats regardless that I will be unable to re-mortgage. Spoke to IFA today who advised I would be unable to get a iva remortgage, due to it breaking the condition that the new repayments should not exceed 50% of my current contribution. He advised moving 60K mortgage from a 2.5% rate to 7% rate would exceed this even before adding the equity release amount and mortgage fee on.
I've also noticed that I made a mistake about my my regular payments. They are £284 and not £258 so 18 x £284 being £5112. So would £4400 be a reasonable offer allowing for administration savings? Same ratio to the incorrect figures I quoted.
All: So based on that I will not be able to remortgage for this £7279 equity release, I can not be forced down a secured Loan route and there should be no reason why this F&F £4400 offer should not be put forward to my creditors by my IP.
I'm really panicking that my IP will try and force a secured loan on me, based on others on forums, with the same iva company.
Help! What now.
I offered the £4400, but it's been refused by my IP to convene a meeting with creditors. He is referring to 85% equity in my property which I can't get to?
Can upload the letter if need be.
Are you with GT ? They calculate equity in a way at odds with the way most do it. They also seem to be in the habit of refusing to put offers to creditors -- which they have no right to do.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
No, I'm with DL (boat)
I just knew this was going to happen. I even mentioned it in my letter that a Mortgage advisor said it would not be possible to re-mortgage on sub-prime rates without breaching the 50% increase limit, in relation to contributions that's stated in the iva. IP seems just to ignore this point. Not sure why IP is mentioning 85% equity at £72K when this would far exceed 100p divi and it’s not even possible without breaching the condition.
The actual condition in IVA: "The incremental costs of the re-mortgage, including the cost of any new repayment vehicle, will not exceed 50% of the monthly contribution at the review date,"
Is the the current mortgage or iva contribution?
Current contributions IVA £284 Mortgage £366 50% of each meaning my re-mortgage should not increase by £142 or £183. So to keep within this I would either need a rate of less than 4.9% or 6.2% for £7279
iva equity release +£1500 mortgage fee. If he wants 85% equity.i.e 74K, then not sure what point this blows the 100p in the £,as 7279 was providing 60.4 with 5 years of £250 mthly payments. Would have been nice of him to have actually told me what the amount of equity equates to 100p in the £,
The repayment cap means that the payment toward the equity loan cannot exceed 50% of your IVA payment. A higher APR means a lower release amount to keep the repayment below 50%.
Check the other clauses relating to equity release. Do they refer to remortgage or an extension in lieu, with no reference to secured lending? If so, based on the fact that it will be impossible to remortgage, then an extension to the term will apply.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
They refer to re-mortgage and if 85% of my interest is £5000. The condition before says if 85% of my interest is less than £5000 then no need to contribute any further to arrangement.
The condition being "If that valuation shows 85% of my interest in the value of the property ( after deducting my share of the mortgage and/or secured loans referred to above) is £5,000 (net of all costs to take out a new mortgage). I will seek to re-mortgage my interest in the property and introduce this money into the Arrangement subject to the following limitations:
* The re-mortgage amount will be a maximum of 85% of my loan to value (LTV)
* The incremental costs ... " as mentioned above.
* The net worth released will not exceed 100p in the £ excluding statutory interest."
and a few more limitations. No mention of secured lending anywhere.
Just not sure what my IP is playing at here and that he doesn't see the only alternative will be a 12 month extension.
I know I've seen a earlier post from someone else with this IP forcing a secured loan on them, that even exceeded the mortgage term.
I think this may be coming my way. He want's some of that equity regardless how he gets it.
Bottom line is that, if it isn't in the agreement, he isn't going to get it. If he tries I would be inclined to lodge a complaint which could then be escalated to his regulators if need be.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Do you think I should reply to his letter? Stating the condition will be breached and that the only other alternative according to the agreement will be a a extension and this is what the F&F should be considered against.
Can I attach his letter on the forum with the personal details removed on what he said?
"I refer to your letter 17 August 2015
First and foremost, I would like to clarify the terms of your Arrangement as they affect the equity in your property. At the inception of your Arrangement the value of your property was estimated and the value was used to calculate the equity available to creditors. At that time, 85% of your interest in the property was stated at £7,2779.00. However, your proposal stipulated that the property was to be professionally valued in the final year and that you were to enter 85% of your interest (equity) into the Arrangement, subject to maximum return to creditors of 100p in the £. Therefore any offer being made must be comparted to 85% of your equity today.
With this in mind, I have given your offer of a third party lump sum of £4,400.00 in full and final settlement of your debts very careful consideration. As I understand it, the lump sum offer includes 6 contributions totalling £1,704.00 that are due from September 2015 to February 2016. This means that you are, in effect asking the creditors to accept £2,696.00 in lieu of 85% of your interest which is currently valued at between £72,189.75 and £79,689.75 (i.e. property value less secured charges multiplied by 85%).
Please note that when a meeting of creditors is convened, creditors compare the offer being made to the amount that they would receive in bankruptcy.
Given the above, I am sure that you will understand why I cannot justify convening a meeting of creditors. However, I would be happy to reconsider the position if I was to receive a much higher offer."
You can see he mentions the limitation relating to 100p in the £, but fails to mention the preceding limitation in the IVA proposal/contract, concerning the 50% contribution increase limit. Why do this when my F&F letter specifically mentions this limitation? Any ideas on what I should do now.
