Worried IVA ending up paying for 7yrs

Concerned75
Concerned75 Posts: 296 Forumite
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in IVA & DRO
I'm in the 5th yr of my IVA and as far as I can remember, based on a phonecall right at the start of my IVA, I was told it would need to be extended to an extra yr. I have so far paid £8,900 into the IVA.
Now I am in my 5th year with an original debt of £22k and I am unable to remortgage my house due to my lender Northern Rock.
After a lot of messing about with a valuation, by my IPs, they decided to get their own agents to do a market valuation.
They sent me the following information:
" if you have a third party (friend/family) that are able to pay £23,634.00 into the IVA, which is your 100% debt plus our charges then your IVA would complete, alternatively you can continue to make your planned payments till April 2018, then once your 12 additional payments in lieu of the equity start, again if you have a third party that are able to pay the 12 payments in one lump sum, once this is received your IVA will complete."

I don't remember this IVA agreed to continue for 7yrs and at the time, my mental health was not 100% after a serious illness.
My question is:
A: should I seek further advice regarding this large payment they are asking for which is not writing off some of the original debt as it will be greater in the end.

B: Pay up until April 2018 as I believe was arranged, then let the IVA fail and negotiate or seek a different debt management plan that doesn't lock in my house or legally binding or:

C: I want to sell up and move away for health reasons, so should I speak to my lender/IP and see if there is an option of selling and whatever it sells for, pay off the IVA and get away from this stressful nightmare. I just want a quick sale, I'm not looking to go through estate agents, just national home buyers etc...
In short, I just want out as quickly as possible. 6 years is plenty for a £22k debt.
I could be wrong, but I sense that because I owed too little in the first place my IVA hasn't generated enough money for all concerned and the fact my house isn't worth much either (£118k) that I'm being penalised for the shortfall as I'm reaching the end. I've had no missed payments or holidays since it started also.

Constructive advice welcome.

Comments

  • fatbelly
    fatbelly Posts: 20,457 Forumite
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    The way I read this is that your IVA started in April 2013. You are now in your fifth year. You cannot remortgage to raise equity. You will therefore make a further 12 payments to complete in April 2019 instead of April 2018.

    This all seems normal.
  • sourcrates
    sourcrates Posts: 28,848 Ambassador
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    edited 17 July 2017 at 10:16AM
    Yep, normal scenario if you are unable to re-mortgage.

    It will be 6 years, not 7, all this should of been explained to you at the start, i appreciate, due to your health, you may of missed some of this information.

    I assume you will have a big wad of paperwork from the court/IP, it will also tell you in there.

    Also an IVA is not always guaranteed to write off any part of your debt, lots get mis-sold on that basis.
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  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
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    Hi Concerned75

    fatbelly wrote: »
    The way I read this is that your IVA started in April 2013. You are now in your fifth year. You cannot remortgage to raise equity. You will therefore make a further 12 payments to complete in April 2019 instead of April 2018.

    This all seems normal.


    I second fatbelly's post above. I don't see any reason that your IVA will continue beyond six years, and assuming that you can continue the required payments until April 2019 you will have completed your obligations.


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • Johnsmith2016
    Johnsmith2016 Posts: 436 Forumite
    This seems normal.
  • DorisTrousers
    DorisTrousers Posts: 548 Forumite
    I am not so sure. I hope I am wrong, but Northern Rock were a majority creditor for a whole host of people who had to propose IVA's a few years ago because of their terrible "Together Loan" package, an unsecured loan running alongside the mortgage for 25 years. As a majority creditor, to accept the IVA they would insist on 6 years at the start, rather than 5. This may seem unfair, but if you had 20 odd years left to run on it otherwise then 6 years was, and is, a fair compromise.

    Accordingly, if NR modified the original proposal to 6 years then the equity that cannot be released means that it is a 7 year IVA. The only thing to do is check your Chairmans Report or ask for a list of any modifications of the original proposal from your I.P. You will have been given the chance at the time of the MOC to accept or reject this modification, if indeed this is what has happened in this instance.
  • fatbelly
    fatbelly Posts: 20,457 Forumite
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    DorisTrousers wrote: »
    I am not so sure. I hope I am wrong, but Northern Rock were a majority creditor for a whole host of people who had to propose IVA's a few years ago because of their terrible "Together Loan" package, an unsecured loan running alongside the mortgage for 25 years. As a majority creditor, to accept the IVA they would insist on 6 years at the start, rather than 5. This may seem unfair, but if you had 20 odd years left to run on it otherwise then 6 years was, and is, a fair compromise.

    Accordingly, if NR modified the original proposal to 6 years then the equity that cannot be released means that it is a 7 year IVA. The only thing to do is check your Chairmans Report or ask for a list of any modifications of the original proposal from your I.P. You will have been given the chance at the time of the MOC to accept or reject this modification, if indeed this is what has happened in this instance.

    I didn't know this and you could be right. But then the OP has made a mistake somewhere as they say they are in their fifth year (at July 2017) and have been told:

    ' you can continue to make your planned payments till April 2018, then once your 12 additional payments in lieu of the equity start, again if you have a third party that are able to pay the 12 payments in one lump sum, once this is received your IVA will complete."

    That doesn't sound like 7 years. Maybe they started in April 2012 and they are in their sixth year now.
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