I have recently separated from my partner who has an IVA
I am buying her out of the house we currently own jointly.
Looking at the terms of her IVA the house was not included in terms of equity release as I refused to sign the paperwork. I have checked land registry and there is no restriction.
She is set to receive a figure of £25000 for her share of the house. Her original debt was approx £12k and has paid back around about £3k through the iva.
How much is her IP likely to ask her to pay into the IVA? She is going to need to spend at least £6k on rent up front due to obvious credit rating issues.
Surely they can't ask her to pay in the full amount given its more than double her original debt?
Has her IVA has been extended by 12 months to accomodate the exclusion of the property ?
I imagine that the sudden acquisition of £25k will be regarded as a windfall by her IP and will be payable, at least in part, to her IVA.
As for how much --- the ceiling on IVA repayments is the remaining balance of the full original debt, plus fees and possible statutory interest (which is sometimes already excluded and, if not, a request can be made to have it excluded, which is often - but not always - accepted).
So, the original debt was £12k. Fees, depending on which firm used, would be about £4k and statutory interest at 8% p.a. would come in about roughly £900 a year. So we are looking at £16k less the £3k already paid --- £13k plus possible interest.
Statutory interest, if not already excluded, does not usually apply to settlements made from equity release. Whether this will apply in this case will depend on how your IP has treated the excluded property.
All of the above are merely my thoughts out loud. Only her IP can give her a definitive answer and this should be discussed with him or her to avoid any nasty surprises later on.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Yes her IVA has the 12 month extension for excluding the house.
That's good to know about the interest , she is hoping that figure will be around what you've quoted so I'll advise her to contact her IP to start the process
