Split up with husband, iva likely to fail, gift from mother in law for F&F

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Beaubeau
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by Beaubeau » Wed Aug 09, 2017 5:42 am
Hi there I found you on a forum.
Its is 4 years on 13th august 2017 since me and my husband went into an Iva our payments went up from £196 to £203 per month we owe approximately £5200 plus we have the remortgage clause if the house has equity we have to continue another 12 month 7 years total.

My husband and I have split up and I will be staying in the property with the 3 children so I just know that I won't be able to make the payments my mother in law said she would gift us the money of £3500 as a full and final offer until we do eventually sell (won't be anytime soon as couldn't get a mortgage to move anyway) do you think the Iva company and creditors will agree to this considering it is likely to fail anyway? I also need advice on how to send the letter making this offer? Thank you
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Michael Peoples
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by Michael Peoples » Wed Aug 09, 2017 8:17 am
This sounds reasonable given the circumstances so speak with your IP. They may ask for a valuation and mortgage statement but other than that there is little you need to do. Creditors are sympathetic to marital break up and will normally accept such offers as yours. Your mother in law may need to confirm the offer and provide proof of funds or she can deposit the funds with the IP if she prefers.
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Foggy
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by Foggy » Wed Aug 09, 2017 8:20 am
Hi. Sorry to hear about the split.

Creditors are usually sympathetic in these situations --- as were mine when I found myself in a similar situation. Have a chat with your IP and see what they require.
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Lisa Thomas
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by Lisa Thomas » Wed Aug 09, 2017 2:51 pm
Have you verified that your equity clause is for £5k each and that you actually have over £5k each of equitable interest in the property?

If not the clause will not apply and you should only have 1 year left.

I would get a current valuation to check.
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Beaubeau
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by Beaubeau » Wed Aug 09, 2017 10:51 pm
Lisa Thomas wrote:
Have you verified that your equity clause is for £5k each and that you actually have over £5k each of equitable interest in the property?

If not the clause will not apply and you should only have 1 year left.

I would get a current valuation to check.



Hi Lisa thank you for your reply but I don't understand what you mean about 5k each etc. Sorry :oops:
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Beaubeau
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by Beaubeau » Wed Aug 09, 2017 10:53 pm
Mortgage balance is around £139,000 and it's worth between £165,000-168,000
So I'm guessing it applies what do you all think? :(
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Foggy
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by Foggy » Thu Aug 10, 2017 7:48 am
Beaubeau wrote:
Mortgage balance is around £139,000 and it's worth between £165,000-168,000
So I'm guessing it applies what do you all think? :(



If they use the usual calculations (some use a perverted method):

House value (say) 170,000 x 85% = £144,500
Less mortgage of £139,000
Equity = £5,500
Joint owners so 50% each = £2,750 each

Some firms will,correctly in my opinion, say that each of your IVA's trigger at £5,000 equity, therefore there should be no release attempt, nor any extension.
Some will, incorrectly in my opinion, say the two of you have £5,000 between you. In this case there would be an attempt to release equity or, failing this, a 12 month extension.

The figures are pretty close, so, if you can get the total equity below £5,000, whether the equity is joint or shared will not matter.
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Lisa Thomas
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by Lisa Thomas » Thu Aug 10, 2017 8:48 am
I agree with Foggy.

Also where did your valuation figures come from? You might want to firm up on them if the IP challenges but seems to me like the clause won't kick in if you have the standard terms (The extension only applies if you have equitable interest over £5k).

In which case it would seem to me that you only have one year left to go...
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Beaubeau
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by Beaubeau » Thu Aug 10, 2017 10:32 pm
Foggy wrote:
Hi. Sorry to hear about the split.

Creditors are usually sympathetic in these situations --- as were mine when I found myself in a similar situation. Have a chat with your IP and see what they require.



Hi there I spoke to my ip and they advised that £3500 wouldn't be enough and that even though we are separating they feel it would be declined. They didn't seem bothered when I said it would therefore most likely fail ? :shock:
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Michael Peoples
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by Michael Peoples » Fri Aug 11, 2017 8:12 am
If you request in writing that a variation be called then your IP must do so within 21 days. It is not for them to decide how creditors will vote as it is your proposal and your offer. Send an email and letter to your IP to keep yourself right and let creditors decide on the offer and not your IP or their staff.
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Lisa Thomas
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by Lisa Thomas » Fri Aug 11, 2017 8:17 am
Please listen to our advice above.

We do not think the extension applies to you based on what you have told us.

You therefore probably only have one year of payments left totaling c£2,400.

In which case you are offering too much to settle via a F&F.

Also, what did you actually ask your IP? If you are putting forward a full and final offer they cannot give you a figure to offer - that's up you you.

If you asked for a settlement figure they will tell you the balance of the debt, plus interest, plus costs which is completely different and could be why they said £3.5k was not enough.

As Michael says if you are putting forward a F&F offer they have 21 days to call the variation meeting for creditors to consider/vote on it and 2 weeks notice for the meeting so you should have an answer within 5 weeks, unless there is an adjournment.

This video might help explain a little:

https://www.youtube.com/edit?o=U&video_id=h4dozq9aGak
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Foggy
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by Foggy » Fri Aug 11, 2017 8:31 am
I strongly echo Michael and Lisa. Do not give up and challenge them !

My creditors accepted a F&F on payments made to date following my marriage split ... so they are not ogres. The difference, however, is that I had a supportive team behind me.
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Beaubeau
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by Beaubeau » Fri Aug 11, 2017 1:30 pm
Is someone able to call me thank you so much for your advice
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admin
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by admin » Fri Aug 11, 2017 1:39 pm
On behalf of beaubeau - instead of replying he/she had clicked on "Report":

Hi there I must say I really appriate all your advice.

Varden nuttall are the company we are through they said our Iva is over 6 years we had an extra year extension in the beginning due one of the creditors, Iva due to end august 2019, the man said based on my mortgage amount owing if around £139,000 and valuation of around £165-170 we would have equity in the property there fore a further one year would be required so all in all balance today is app just under £5900. Then another two years to go at a value they choose based on our new annual review.

My salary maintenance etc won't leave me with Enought left so therefore I can't continue with the payments and I'm scared I will loose house.

My ex husband will
Have more disposable income once his bills etc are paid so worry that they won't end the Iva with the offer based on that.

Is there anyone I can talk to over the phone? I would love help putting my letter together.
Thank you
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Lisa Thomas
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by Lisa Thomas » Fri Aug 11, 2017 1:48 pm
Hi

You can call me but I will tell you that you need to check your proposals, estimated outcome statement ("EOS") and chairman's report (for modifications) so I can get a clear understanding of if the 'normal' term was 6 years (were one of your creditors NRAM by any chance?)

and I need to know how they have calculated the equity in your original proposals (look at the EOS and the notes) - this is the same way they should be calculating it now, usually 85% LTV.

I suggest you do this before we talk if that's okay.

Also where is the valuation figure coming from and how old is it?
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