Hi everyone. I am coming up to my 4th year in the IVA and like a lot of people on here are worried about the equity release. I have checked the Chairman's report and it says 'the propertyis to be valued within 3 months after the 4th anniversary and the debtor's equitable interest is to be realised and paid to the Supervisor before completion of the arrangement. If necessary the arrangement can be extended with the approval of 75% of the creditors voting to allow an equivalent sum to be paid by ongoing contributions for a period of 6 months'. On reading the various posts it would appear that people are normally asked to pay an addition 12 months contribution in lieu of any equity, which was in the original proposal put forward by my practitioner, although this was amended at the creditors meeting. Does this therefore mean that I will only have to put in any equity that is available on the valuation. I believe my house is worth Â£126,000 and the mortgage is Â£122,500. Will I be asked for the Â£3,500? Thanks for any assistance you can give.
Blossom, this is all very very new to me and I am in the stage of first phone calls. But having read loads of posts on here and the bit my 'advisor' said. It would all depend on whether someone will lend you that difference anyway. Would your mortgage company let you re-mortgage anyway. And how high would it take the payments if they did.
You may find that you can't get a re-mortgage because they will class you as a higher risk and therefore this ends up being a mute point.
Do a search for equity posts on here, there are a lot.
The new protocol that was introduced in the last two years suggests that if there is less then £5,000 equity then the IVA would be brought to an end after 60 contributions, if it is more then £5,000 but you were unable to release this then the IVA would be extended by a further 12 months.
However this equity calculations is based on 85% LTV so if your property is valued at £126,000 then the most you would be expected to realize would be £107,100 and as you owe more then this on the mortgage then you have no realisable equity so i suspect no need for a exetension.
Although your IVA was approved before the protocol was introduced i suspect the 85% LTV still applies.
Thank you for your replies. I have read through some of the posts on releasing the equity in the property and I am hoping that as there is no equity our IVA will finish after 60 months. I blame noone but ourselves for being in this situation, but it will be lovely to complete the IVA and be able to once again live a normal life. Again thank you for your help. This site is an invaluable source of information for people in our situation and it does give you inspiration when you read the posts of people who have been through the IVA and come out the other end.
Good luck, I hope you manage to complete after the five years. Let us know.
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