My son is presently applying for an IVA.

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paul.hd

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Post by paul.hd » Fri Jun 11, 2010 5:20 pm
My son is presently applying for an IVA.
We recently bought a house together on a joint mortgage in which my son lives alone.His IP says he needs to fill in an RX1 and in this regard the IP has asked me to sign a letter saying I have no objection to my son releasing his share of the equity in the property in the 54th month of his IVA agreement. As we have only recently bought the house my son has no equity in it at all as I provided the deposit in full.Am I putting 1/2 of the equity I currently hold in the house at risk by agreeing to the IP's request.Also why has this request been made and what is the significance of the 54TH month.Finally would my sons IVA application be put at risk if I didn't comply with the IP's request.
 
 

MelanieGiles

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Post by MelanieGiles » Fri Jun 11, 2010 5:28 pm
Hi here and welcome to the forum

Make sure that your son's IP is aware of your prior interest in the property, and that this is conveyed to creditors within the IVA proposal.

Your son may struggle to get an IVA approved without the equity release provisions being agreed to - but you must take account of your own position. If you are both unable to re-mortgage during the final year, and there is equity which could be raised subject to the 85% loan to value ratio, then he will be required to pay contributions for a further year instead.
Regards, Melanie Giles, Insolvency Practitioner
 
 

paul.hd

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Post by paul.hd » Sun Jun 13, 2010 1:50 pm
I'm sorry but I don't understand your reference to remortgaging the property. The IVA is in respect of his own personal loan and credit card debts only.
The mortgage is presently being paid in full jointly by us both and this will continue to be the case throughout the existence of the IVA. Also what is the significance of the 54th month of the agreement in which I am being asked to give my consent to my son releasing his share of the equity in the property.
 
 

kallis3

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Post by kallis3 » Sun Jun 13, 2010 1:57 pm
If you own your own house then you will be expected to release some equity to pay towards the creditors. In your case it would be from your son's half of the equity, not yours.
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MelanieGiles

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Post by MelanieGiles » Sun Jun 13, 2010 2:25 pm
Your son cannot effect a remortgage on his own - so your consent will be required and you will therefore be exposing yourself to a larger secured liability if there is equity sufficient in the property at that time to raise. This is required to happen after the 54th month - hence the reference to this in the timeline.

Your son's IP should have sent you a detailed letter explaining all of this for you to consider, and decide whether you should seek independent legal advice.
Regards, Melanie Giles, Insolvency Practitioner
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