IVA question again ..

mother_hen_2

Were just starting the IVA process via cccs, I guess my main issue is after 5 years of struggling and sticking to the agreement, they then will probably ask us to re-mortgage the house so they can 'squeeze' more out of us. Is there anything/advice anyone can give us to prevent this from happening? There is approx £10,000 in the property at the moment but in 5 years who knows where property prices will be.
Can we object before we start the IVA over the house being 're-assessed' in 5 years?

kev1980_2

mother_hen wrote: »

Were just starting the IVA process via cccs, I guess my main issue is after 5 years of struggling and sticking to the agreement, they then will probably ask us to re-mortgage the house so they can 'squeeze' more out of us. Is there anything/advice anyone can give us to prevent this from happening? There is approx £10,000 in the property at the moment but in 5 years who knows where property prices will be.
Can we object before we start the IVA over the house being 're-assessed' in 5 years?

Its a shame you don't live in Scotland as the Scottish equivellent of an IVA is a Trust Deed and with a Trust Deed the equity gets dealt with at the beginning and doesnt change throughout the term of the trust deed so long as you co-operate with the trustee and make your agreed payments each month.

The equity can then be paid at the end of the trust deed in order to get your discharge and be debt free.

I do believe the IVA in England and Wales makes you re-value your home at the end and if the equity has increased then you have to pay that extra.

mother_hen_2

Thanks for the reply but what happens if we can't remortgage as noone will offer us one given we have a history of bad debt?

dorisday

what my happen is the IVA will be extended sy another 2 years so you will pay them this way, but please bear in mind that they can make you sell your home to give them the extra money. I would have had to take out another mortgage to pay the extra if my IVA had worked lucky it didnt, as you say with a bad credit report its difficult to get a reasonable mortgage rate if you can get one at all. You could try and get them not to include your house in the IVA, thats what I was told by someone at the National debt line but I didnt remember what she told me.

MurrayMint

Hi mother hen,

I was asking a similar question last week, maybe worth you reading through the replies? http://forums.moneysavingexpert.com/showthread.html?t=1234301

dorisday

Should have also said that there is a way around this without going down the IVA route - and thats to deal with all your creditors yourself offering a payment every month that you can afford. Thats what I did after the IVA failed and I lost £4000 which they took in fees. Im still paying a small affordble amount each month to my creditors, some I have been able to pay off with a reduction for ffp but others I just keep going with, its been 5 years now. It takes loas of letters and you sticking to your guns bout what you can afford, but its worth it leaves you in control and when the creditors see you are keeping up with your payments they leave you alone.

mother_hen_2

Thanks for the replies... still think there must be a way around not re-mortgaging in year 4. Are we able to refuse to agree to this when setting up the IVA?

Deep_In_Debt

Hi
Not sure that you can refuse to include the house - I think it has to be included - that's why IVA's are only suitable for a small percentage of people as you are normally expected to release any equity to pay off the remainder (one reason why I chose not to go down the IVA route as I'm only 5 years away from clearing my mortgage anyway and didn't want to add any more debts for the next 20 years). They may extend the term of the IVA for another couple of years instead but I think this unlikely if you have property.

I have heard of people paying off an IVA with a lump sum payment - not sure if you could raise the funds to do this?

doelani

HI Motherhen

any assets you have will need to be included in an IVA, there is no way around it as far as I know unless you had no equity and the IP could still ask for house to be revalued in year 4 to see if equity has increased.

Remember the IP has to show how you can pay the creditors back as much as possible over the 5 years and they would be best person to advise you. If your circumstance changed and you could pay back 100% of what you originally owed you would be expected ot do this.

You should ask CCCS about the house situation.

peachyprice

mother_hen wrote: »

Thanks for the replies... still think there must be a way around not re-mortgaging in year 4. Are we able to refuse to agree to this when setting up the IVA?

No, there is no way around this, your creditors will either accept or decline your IVA proposal depending on how much they can get out of you. They will not accept your IVA if you're sitting on equity you are not prepared to give up.

mother_hen_2

Yep your all right, I have spoken with CCSS IVA tea there is no way around this, therefore we have to accept to re-mortgage in the 4th year - otherwise we have to remain on the IVA for another 1 year. oh, well it was worth asking the question... thanks for the replies..