Is there another way to reduce or eliminate further 12 months of payment in iva

Get expert opinion. This is the place for new questions to be posted.
  • 1
  • 2
26 posts Page 1 of 2
User avatar
andrew460
Posts: 13
by andrew460 » Tue May 15, 2018 11:45 am
Hello

I believed I was entering the final 6 months (5 years in Nov 18) of my IVA arrangement. I have just been told that they seek equity release in my property or extend the term by a further 12 months. Other than offering a lump sum form a 3rd party, is there any other way to reduce or eliminate a further 12 months of payment?
User avatar
Lisa Thomas
Industry Expert
Posts: 6621
Contact
by Lisa Thomas » Tue May 15, 2018 12:15 pm
Do you have the relevant amount of equity for the clause to apply? The standard terms stipulate a minimum amount of £5k. Check your terms and consider getting a valuation, if you haven't already.
User avatar
andrew460
Posts: 13
by andrew460 » Tue May 15, 2018 12:29 pm
Hi Lisa

I imagine I have over £5k equity however, I would expect it would be difficult to be accepted being in an IVA.

Do I have to arrange a valuation myself as I gathered my IP would do this from the letter?

I am also bought my house on a 'help to buy' scheme so only had to get a mortgage for 70% of the property and therefore only own 70%.
User avatar
Lisa Thomas
Industry Expert
Posts: 6621
Contact
by Lisa Thomas » Tue May 15, 2018 1:48 pm
The £5k minimum just means something has to be done with the equity (i.e if no remortgage then the year extension will apply).

If you think there's a chance it might be less than that it is worth getting a valuation otherwise you may have to pay contributions and extend your IVA for another year unnecessarily.

The onus will be on you to provide a valuaiton - I wouldn't leave it up to the IP as theirs may not be as accurate.
User avatar
andrew460
Posts: 13
by andrew460 » Tue May 15, 2018 2:18 pm
If it is a payment extension, can it end up being more or less than 12 months or is 12 months the standard?
User avatar
Foggy
Forum Expert
Posts: 25870
Contact
by Foggy » Tue May 15, 2018 2:45 pm
12 months is the standard extension in lieu of equity release. Some insolvency firms use brokers to check availabiltiy of remortgages, secured lending and so called "Early Exit Loans" and you might be offered one of these alternatives as well. Sometimes the figures stack up, sometimes not, but you are not usually obliged to take them.
User avatar
andrew460
Posts: 13
by andrew460 » Tue May 15, 2018 2:58 pm
Thanks for your prompt replies. It states in the letter that if the equity in my property is over £5,000 (which I believe it is) then I must try to release ALL the equity in the property. Does this mean just enough for a full and final payment (i.e around £3.5k (estimated)) or will they take it all? Surely no one can get a re-mortgage if they are in an IVA. I am at a very confused crossroads at the moment and the IP is not very fast at replying to my concerns.
User avatar
Foggy
Forum Expert
Posts: 25870
Contact
by Foggy » Tue May 15, 2018 3:06 pm
andrew460 wrote:
Thanks for your prompt replies. It states in the letter that if the equity in my property is over £5,000 (which I believe it is) then I must try to release ALL the equity in the property. Does this mean just enough for a full and final payment (i.e around £3.5k (estimated)) or will they take it all? Surely no one can get a re-mortgage if they are in an IVA. I am at a very confused crossroads at the moment and the IP is not very fast at replying to my concerns.


If you could remortgage (used to be possible and might be again one day) they would want all of the equity up to 85% LTV and up to the sum of the full original debt, fees and possible statutory interest. Currently you stand to get an extension.
User avatar
Lisa Thomas
Industry Expert
Posts: 6621
Contact
by Lisa Thomas » Tue May 15, 2018 3:09 pm
The extension will normally be for 12 months - the answer lays in your proposal terms and any modifications agreed to.
User avatar
andrew460
Posts: 13
by andrew460 » Tue May 15, 2018 3:17 pm
How many IVA's actually last 5 years (without any final payment etc.)? Seems like its just standard to extend it to 6 years. Is this the creditors decision or the IP's?
User avatar
andrew460
Posts: 13
by andrew460 » Tue May 15, 2018 3:26 pm
I feel like it is in Credit Fix's interest to keep it going as long as possible to take their cut!
User avatar
Foggy
Forum Expert
Posts: 25870
Contact
by Foggy » Tue May 15, 2018 3:41 pm
andrew460 wrote:
How many IVA's actually last 5 years (without any final payment etc.)? Seems like its just standard to extend it to 6 years. Is this the creditors decision or the IP's?


If you are a home owner it is pretty much "the thing" that it is extended, unless you can demonstrate less than £5k equity. Renters usually finish at the 5 year mark and a very few take early exit loans or secured lending to buy out the extension.
User avatar
andrew460
Posts: 13
by andrew460 » Tue May 15, 2018 3:48 pm
Whose decision is it to extend it by 12 months? Can't imagine my IP fighting too hard for me.
User avatar
Foggy
Forum Expert
Posts: 25870
Contact
by Foggy » Tue May 15, 2018 3:51 pm
andrew460 wrote:
Whose decision is it to extend it by 12 months? Can't imagine my IP fighting too hard for me.


It will be set out in proposal as a standard requirement, neither you nor the creditors and IP have any say --- the options have already been agreed: Remortgage if you can or extend if you can't.
User avatar
Lisa Thomas
Industry Expert
Posts: 6621
Contact
by Lisa Thomas » Tue May 15, 2018 3:54 pm
It's based on your terms. There is no 'decision' except for the IP determining whether or not you have the relevant level of equity for it to kick in and if none of the alternatives are possible/accepted then it willonly leave the extension as the option.

See herefor my short video on the options:

https://youtu.be/PHfc85n39U4

None of my IVAs are Protocal term based so don't have the extra year clause. Many are based on 3 year periods to match what would be paid in Bankruptcy.
  • 1
  • 2
26 posts Page 1 of 2
Return to “Ask IVA Forum and Industry experts”

Who is online

Users browsing this forum: kallis3 and 11 guests