Equity release question

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Post by paul702 » Tue Apr 27, 2021 11:04 am
I am an accountant acting for an elderly couple (aged 76) in an IVA. The wife has cancer and the husband is still working. The IVA commenced in October 2016 and was fixed at 6 years (72 months). They are home owners and they still have a mortgage (£ 330 per month) and pay £100 per month into their IVA. In October 2020 the IVA Supervisor asked them to release equity via taking out a 2nd motgage / secured loan. Ipointed out that only 48 months had elapsed and that this was premature. In month 54 the Supervisor is insiting that they go through the process despite it being a 6 year IVA AND NOT A 5 YEAR ONE and that they can insist on it at any time. Is this correct in law? The Supervisor promised to send me an e mail but has not done so to date. Is the Supervisor correct or is he being premature by acting in month 54 and not month 66 which is 6 months of completion?


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Post by Foggy » Tue Apr 27, 2021 11:26 am
The equity release clause is usually enacted at month 54, but can be at month 66, according to what is specified in the actual proposal or Chairman's Report of the initial creditors meeting......

The standard proposal put forward is usually 60 months, so the release clause triggers at month 54. I see your clients IVA's were 72 months ---- this could have been proposed as 72, in which case the release clause could have been agreed in the proposal as at month 66. Or, it could have been amended to 72 by creditors at the meeting, in which case the release will still be at month 54, unless altered in the Chairman's Report.

All that said, assuming these are Protocol IVA's, the Covid Guidance would currently apply : https://www.gov.uk/government/publicati ... a-protocol and, so, the 12 month extension would be added, rather than equity release --- if there is, indeed, enough equity to trigger the clause anyway.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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