Nearly completed 3 years of my IVA, and I am confused about the 4th Year equity release. My chairmans report states that I have to release £7120 in year 4, which is my share of the equity (my husband does not have an IVA or any other debts) but as our house price has dropped over the past 3 years, I have just had the house valued, and there is only £3k equity now between us, so my share would only be £1500. What happens in this case, would I have to pay another 12 months payment anf forget the equity release? Please help, I'm so confused with the equity clause..
You will not have to remortgage, instead it is likely that your IVA will extend by a maximum of twelve months or until you have paid the 1500 pounds if that is earlier.
Speak with your IP to clarify
As your IVA is one of the older varieties, it is unlikely to contain any provision with regard to what happens if you cannot release the amount stated. Given that there were so many versions of the equity release clause floating around when you entered into your IVA, I suggest that you consult your IP to see if you can properly comply with the terms of the arrangement, or as Andy says you may have to see a variation of terms.