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Mortgage Payment Breaks with an IVA
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I am currently in an IVA with Grant Thornton and I have recently applied to take a mortgage payment break with my mortgage provider Northern Rock. I've been told off Northern Rock that I need to get GT to send them a letter confirming that I am allowed to take a mortgage break, once they receive this they will let me take this.
So now I'm stewing over this, personally I wouldn't think that it has anything to do with my IVA as the mortgage payments are completely seperate to those debts that my IVA is bound by and I am going to pay my monthly mortgage payment eventually because the interest of me taking "the break" simply gets added on later in the term of my mortgage.
I've looked at my IVA contract and it says that over the 5 years I will have to pay my set amount per month, and if I got any windfalls such as inheritence/lotto wins etc. then I'd have to use that to pay off my IVA (which I understood).
Has anyone has a problem like this before as basically the money I would get soon from my mortgage break was simply going to pay my wife's gran back who we borrowed money off to go on holiday next week!!!
If anyone can answer me this, before Monday (when Grant Thornton are next open) I would much appreciate this.
Thanks
So now I'm stewing over this, personally I wouldn't think that it has anything to do with my IVA as the mortgage payments are completely seperate to those debts that my IVA is bound by and I am going to pay my monthly mortgage payment eventually because the interest of me taking "the break" simply gets added on later in the term of my mortgage.
I've looked at my IVA contract and it says that over the 5 years I will have to pay my set amount per month, and if I got any windfalls such as inheritence/lotto wins etc. then I'd have to use that to pay off my IVA (which I understood).
Has anyone has a problem like this before as basically the money I would get soon from my mortgage break was simply going to pay my wife's gran back who we borrowed money off to go on holiday next week!!!
If anyone can answer me this, before Monday (when Grant Thornton are next open) I would much appreciate this.
Thanks
0
Comments
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Hi fritzman,
When you entered the IVA you gave assurances that you would pay back to your creditors as much as you could afford. This 'affordability' is calculated by taking your essential living costs away from your household income. This leaves your disposable income, and that is what is offered to creditors. Disposable income will increase when either income goes up, expenditure goes down, or there's a mixture of both. As disposable income increases, so should the IVA payment.
An IVA's payments are therefore not 'fixed' definitively and as such they are always susceptible to changes in personal circumstances, whether for better or worse, and that's why GT perform an annual review on your circumstances - to check the affordability of the IVA.
When you stop paying such a large amount from your expenditure you will be able to afford more money to your IVA even if it is for just a short period, it's as simple as that, and to assume that you can keep the extra difference in your disposable income is unwise.
You should talk to GT first and explain what you intend to do with the money before you spend it, because if they deem that the saved money should have gone to your creditors you'll have to pay it back.
Unfortunately, I can't tell you what GT's reaction will be, and you'll only find out by talking to them directly, but I hope this helps you understand why Northern Rock have at least requested the letter from GT confirming you are allowed to take the mortgage break.
MIVAA0 -
I rang up Grant Thornton about this and they said it was fine for me to have a mortgage break.
I must have been right in my original presumption in that they dont include me not paying my mortgage for a month being extra disposable income as I am not really getting out of not paying my mortgage as such - I'm only going to pay it back at a later date i.e. at the end of my mortgage.
Either way though, I'm happy with the response I got from them. Now I need to just ring Northern Rock this afternoon to confirm that they have received the fax that GT were going to send them so that they will give me my mortgage break!!0 -
I'm glad the GT have allowed you to keep the money.
Enjoy the holidays -
MIVAA0
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