Selling house to pay off iva?

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Krif
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by Krif » Sat Apr 29, 2017 5:11 am
We are in our last year of a 6 year iva. During this I've had a baby & husband gave up work. I'm currently on long term sick and social services have advised us to sell our house & move into an adapted council property. Our house can't be adapted for our needs, we are both disabled.
If we sell can we make a full & final offer to end the iva. Would this be for the reduced amount agreed in the iva or the full original amount. Also one of our creditors didn't put a claim in what would happen to that?
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kallis3
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by kallis3 » Sat Apr 29, 2017 8:04 am
Hi,

Sorry to hear of your problems. You will need to speak to your IP as they need to remove the restriction on it. You could also see if they would accept payments made to date in view of your ongoing needs.
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Foggy
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by Foggy » Sat Apr 29, 2017 8:47 am
If you sell most of the equity would be taken into the IVA, thereby defeating the purpose. Are you in the 6th year as it was a 6 year term from the start, or has the 6th year been added for equity release ? If equity hasn't been addressed yet, you might have a further year added.

You could seek an agreement with creditors that you will sell the house ONLY as a means of providing a lump sum ( equivalent to remaining payments). They do not need to know you need to sell anyway at this stage. As far as they are concerned, if they do not agree, you will not sell and the IVA will continue as at present.

If you sell without such an agreement they can take most of the equity to recover all of the original debt plus fees and possible statutory interest (if sufficient).
Krif
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by Krif » Sat Apr 29, 2017 9:05 am
Thanks. When I spoke to dfd when I came out of hospital she said I couldn't akbar for the to accept payments to date as a final figure.
It is a 6 year iva as we originally paid £100 a month then this has increased this tear to £433 due to car finance ending.
We would then exspect to release equity or pay another year.
When I spoke to them yesterday to see if it would be possible to sell she said I would just need to tell the solicitor to contact them once have a buyer. She said it would be the full original balance plus interest and costs. I explained we would need money for adaptions and equipment for the new house. She then mentioned a full and final offer but didn't say how much.
How many times can I put offers to them? What evidence do I need to provide.
We might have around 50k after paying mortgage offer if we get a good price. Our original debt was 25k. Would they still exspect the full amount because we have it?
Also it says they must leave us with 15% equity in our house. Is the 15% each making 30% as it is a joint iva?
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Foggy
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by Foggy » Sat Apr 29, 2017 9:24 am
In interlocking IVA's you each have to account for equity on your share. So 15% on each half share is the same as 15% of the whole here.

DFD are being a little mis-leading about the paymants to date as a F&F. This does happen often ( it did with me) .... what she really means is that they (DFD) wouldn't support such a request.

IP's generally will not tell you what to offer for a F&F, but it is based on the remaining payments ( including the 12 for equity release).

She is also being economical with the facts surrounding a sale ---- when a house under an IVA is sold the conveyancer will discover the restriction -- and will contact the IP. The IP will then agree to allow the sale to proceed on the condition that the sale proceeds are sent to them direct. They will then take whatever they need and return the balance to you. You need to pin them down to agree figures before you do anything -- and get this in writing.

Most sympathetic IP's will allow costs for adaptations, and fees to be retained as well as the 15%. You would need to ascertain what adaptations are needed and supply quotes.

This is very much "chicken and egg" territory and will need a lot of co-opearion and support from your IVA provider.

The simplest solution, if possible would be to raise a F&F lump sum ( friends and family ? ) to end the IVA --- THEN deal with the house on your own terms.

I would also have a word with Shaun Vickery, who, I believe, might have a product which could help. He is a whole of market mortgage broker. His contact details can be found under the "Quick Links" tab (top left) then under "The Team" on the drop down.
Krif
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by Krif » Sat Apr 29, 2017 11:23 am
Can I just send a letter to dfd asking them to call a meeting of creditors and to accept payments to date as a full and final offer. What evidence will I have to provide or will I just explain the situation in the letter?
Can't find any links at the top left.
My family don't know about the iva.
If I did sell would I have to get in writing the amount they would take and this then can't be changed by them?
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kallis3
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by kallis3 » Sat Apr 29, 2017 11:33 am
If it is a council house shouldn't the council sort out adaptations for you?
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Foggy
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by Foggy » Sat Apr 29, 2017 11:49 am
Krif wrote:
Can I just send a letter to dfd asking them to call a meeting of creditors and to accept payments to date as a full and final offer. What evidence will I have to provide or will I just explain the situation in the letter?
Can't find any links at the top left.
My family don't know about the iva.
If I did sell would I have to get in writing the amount they would take and this then can't be changed by them?



Shaun's details are here:

memberlist.php?mode=viewprofile&u=22837


You can demand a variation meeting, however, the creditors rely heavily on the IP's recommendation. so it is better they are on your side. If you force the issue the variation will be presented as take it or leave it --- and leaving it (rejection) could mean the failure of the IVA, which you do not want at this late stage.
Krif
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by Krif » Sat Apr 29, 2017 12:35 pm
Thanks, if I can find someone to lend me the money what would be a realistic offer they might accept. We now pay £433 and have a year left but then they would exspect equity as well. Would you take some off as they wouldn't be charging 2 years of fees?
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Foggy
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by Foggy » Sat Apr 29, 2017 12:44 pm
Krif wrote:
Thanks, if I can find someone to lend me the money what would be a realistic offer they might accept. We now pay £433 and have a year left but then they would exspect equity as well. Would you take some off as they wouldn't be charging 2 years of fees?


The usual fee structure imposed by creditors these days is a percentage of monies realised, so they would be getting a fee anyway ! So -- as things stand, the creditors are expecting a further £10392 from you (assuming 24 outstanding payments) . You can reduce this a little to reflect the admin costs they will be saving over the next two years, and the "bird in the hand" factor. I would say £8 - 9 k would be a fair offer.

My thinking behind having a word with Shaun is that he would work with your IP, raise a secured loan to release you from the IVA early .... then you can pay this off when you sell. Whilst all circumstances are different, this has worked in the past for others. Your own situation might not suit such an arrangement, but worth looking at.
Krif
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Joined: Sat Apr 29, 2017 12:12 am
by Krif » Sat Apr 29, 2017 7:30 pm
Thanks, it is likly we would have to reduce our payments as not sure what's happening with my job. I'm going onto half pay soon. Also I'm exspect to pay towards a care package from social services once I have their report I will know exactly how much.
So could I offer less with this in mind?
If we can't borrow the money we would just have to go with the risk of selling and see what they want.
Krif
Posts: 33
Joined: Sat Apr 29, 2017 12:12 am
by Krif » Sun Apr 30, 2017 9:49 am
We are coming to the end of our 5th year of a 6 year iva. During which time my husband gave up work. I am now on long term sick. Social services have advised us to sell our house as it can't be adapted and move into a council adapted property. We pay £433 a month and have the 1 year extension or realise equity terms.
If we sold our house would we be able to offer a full and final settlement and would this be for what's left to pay on the iva or the full original amount?
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kallis3
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by kallis3 » Sun Apr 30, 2017 11:03 am
Merged to avoid confusion.
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Shaun Vickery
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by Shaun Vickery » Tue May 02, 2017 12:32 pm
Some great advice from Foggy and I agree that you should tread carefully. If the property is sold you are likely to be required to settle everything outstanding in the IVA and potentially leave yourselves in a position where you cannot afford to do the changes you need to do to adapt the house.
Whether you are able to borrow temporarily to release funds to make a full and final offer will depend on your circumstances to a great extent but my advice in this situation is always to look at every option before making a decision. If you are able to borrow from friends of family in order to make an offer that could well be a suitable option.
Krif
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Joined: Sat Apr 29, 2017 12:12 am
by Krif » Tue May 02, 2017 2:39 pm
Thank you.
I am going to ask at the weekend to see if my parents could lend me the money. I don't think they could find the full 10k but they may manage £7500, do you think they may accept this?
Either way we are going to have to sell and move due to disability. Is there an option to offer say 10k as a full and final offer on completion of selling the house?
If we did raise a full and final offer how long would it take for them not to have a claim over the house sale.
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