Is this a reasonable F&F ?

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carol727
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by carol727 » Mon Nov 06, 2017 8:51 pm
I am currently 42 months into the payments on my 60 month IVA, I pay £110 per month so I have outstanding £1980. I have contacted my provider as a third party has offered £2000 as 1 off full and final payment. It has taken 3 weeks for my provider to even come back to me in relation to this and was quite blunt in the response that this offer would need to be £3300 due to equity in house as they would definitely have been extending my IVA for 12 months. Whilst I understand about the equity clause on my property what I don't understand is how he could tell me today that he know's there is equity in my house and that they would have extending it without we even having to provide any information!!! Did I put in a reasonable F&F offer considering that they will get there money now and not have to wait 18 or 30 months?
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Foggy
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by Foggy » Mon Nov 06, 2017 9:11 pm
It would be a generous offer if you prove that the equity clause will not be triggered ( the onus is on you to do that, otherwise the assumption is that it will be triggered). With a 12 month extension the creditors would be looking at getting i.r.o. £3300 -- bearing in mind they would be saving 30 months admin costs, but spending an extra £500 in fees for the variation I would have said that an offer of £2750 - £3000 would be reasonable.
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carol727
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by carol727 » Mon Nov 06, 2017 10:11 pm
Foggy wrote:
It would be a generous offer if you prove that the equity clause will not be triggered ( the onus is on you to do that, otherwise the assumption is that it will be triggered). With a 12 month extension the creditors would be looking at getting i.r.o. £3300 -- bearing in mind they would be saving 30 months admin costs, but spending an extra £500 in fees for the variation I would have said that an offer of £2750 - £3000 would be reasonable.


Thanks Foggy, I'm trying to go through all the reams of paperwork I have and read all the small print, but not sure I'll be able to prove the equity clause won't be triggered but I also can't predict what will happen to the value of my property in the next 12-18 months. I have however read that in the event the arrangement should come to an early conclusion no additional fee may be charged in respect of the early settlement, so I would interpret that as there would be no variation fees, or am I on the wrong wave length :?
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Foggy
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by Foggy » Tue Nov 07, 2017 8:01 am
carol727 wrote:
Foggy wrote:
It would be a generous offer if you prove that the equity clause will not be triggered ( the onus is on you to do that, otherwise the assumption is that it will be triggered). With a 12 month extension the creditors would be looking at getting i.r.o. £3300 -- bearing in mind they would be saving 30 months admin costs, but spending an extra £500 in fees for the variation I would have said that an offer of £2750 - £3000 would be reasonable.


Thanks Foggy, I'm trying to go through all the reams of paperwork I have and read all the small print, but not sure I'll be able to prove the equity clause won't be triggered but I also can't predict what will happen to the value of my property in the next 12-18 months. I have however read that in the event the arrangement should come to an early conclusion no additional fee may be charged in respect of the early settlement, so I would interpret that as there would be no variation fees, or am I on the wrong wave length :?


It looks like the creditors might have managed to head off a variation fee.

With regard to the equity clause: What most do is carry out a straw poll valuation exercise -- get a rough valuation and a mortgage redemption figure and calculate current equity from that. If there is currently way over £5k the clause will be triggered, if you are in negative equity, it probably will not. In the middle and it will fall to your powers of persuasion and a stab at what the market is doing.
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Lisa Thomas
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by Lisa Thomas » Tue Nov 07, 2017 10:05 am
Get a valuation from an estate agent and a redemption statement from your mortgage company/ any chargeholders to calculate the equity.
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kallis3
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by kallis3 » Tue Nov 07, 2017 10:13 am
You should be able to get a free valuation from a local agent and ask for a quick sale - you can always fib (as we did) and say you are looking to move due to your job.
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