Cannot afford final IVA Payment ..... ???

SAGWALA_3

When I set up my IVA, I committed 12500k into the arrangement as a final payment.

I am coming to the end of this arrangement, and finding myself in a position where I will not be able to meet this final lump sum.

Can anyone help as to where I stand with this?

:beer:

Charco_2

Where was the £12,500 going to come from? Equity in property? (this would effect the answer!)

It's not the end of the world. You should be able to speak to your IP who would be able to propose a variation to your proposal.

How much of the Lump Sum can you produce?
Would an extra year of contributions be an option?

SAGWALA_3

Thanks for the response Charco.

The original proposal, was for the 12500k to come out of property equity, yes.

However, my property is jointly owned with my wife, who did not sign anything or agree to equity being put into the IVA.(Incidentally she is not in the IVA)

Where do you think I should go with this one.

Your comments would be greatly appreciated. Thankyou.

Charco_2

Your IVA is almost certainly going to need a variation, your first move should probably be to get a redemtion value on your mortgage and an approximate valuation of the house to see how much (little) equity there is.

Can i ask what company you're in your IVA with?

SAGWALA_3

Yes certainly,I am with a company called Debt Lifeboat in Birmingham, IP is Mr Philip Allen, who I have found to be extremely professional and helpful.

How does the equity in the property work if it is jointly owned and only one of us is in the IVA?

I dont actually think there will be that kind of equity in the property anyway? Loans etc.are out of the question, and I really do not want to go down that route anyway. I have vowed never to take credit again after this last escapade.

Any thoughts ??????

Charco_2

Well, your wife should have been instructed to take legal advice at the start of your IVA and any agreements to release equity should have been addressed way back at the start of the IVA.

The IP will only have interest in YOUR share of the equity anyway but your wife would need to be willing to allow you to remortgage (which would affect her because you'd need to move to a subprime lender and so a worse rate), or put a second charge on the house for the amount you need to release (which would also require her approval).

The rules have changed a little now but since you are approaching the last year I would imagine your IVA would be governed by the older rules - ie, you've promised a certain dividend to your creditors and you'll need to achieve that.

The good news is that IF there is less than £5,000 equity in your property it is unlikely you'll be forced to release it. Your IP should propose a variation to your IVA (explaining the change in circumstances regarding your house/equity) this requires a new meeting of creditors like the one that approved your IVA in the first place.

The variation will include a proposed change to your dividend and instead of releasing equity from your house you may be required to make 12 more repayments to your IVA... so extend your IVA by a year!

Sorry if this answer is a bit all over the place, i can clarify anything that might not be clear.

SAGWALA_3

Thanks for this Charco,very informative.
Just a few points.........

My wife has never signed anything or agreed to any charge on the property or remortgage etc. for the 12.5k equity for th final payment. Does this affect anything?

Also, can the 12.5k be renegotiated down, say if I agreed to pay £300 per month for a final year of the IVA i.e an extra £3600 into the arrangment over 12 months.

My wife tries not to keep any equity in the property whilst this is going on, as you can imagine, to protect our home.

Your further comments would be appreciated. Thankyou again.

Charco_2

It will probably be acceptable to make a further year's contributions like you've described but this is going to require a creditors meeting to agree the reduced/renewed dividend.

The fact that your wife has never agreed is a strange one, i would have thought this should have been dealt with a lot earlier but it wont have much effect. Your house is safe, it's only the equity anybody has any interest in and sure there is none of that. If there's less than £5k equity anyway it's much more common that a year is added on.

You can speak to your IP now to find out their policy on it before it does come to the end of your agreement. Contrary to negativity that is posted/spouted on here about IPs, they ARE on your side (as much as they can be) and do have an interest in seeing your IVA through to a successful completion.

SAGWALA_3

You can speak to your IP now to find out their policy on it before it does come to the end of your agreement. Contrary to negativity that is posted/spouted on here about IPs, they ARE on your side (as much as they can be) and do have an interest in seeing your IVA through to a successful completion.[/QUOTE]

I quite agree.My IP has been extremely helpful. As you state, they are there to help, but they too have jurisdiction which governs them tightly.

I have been quite happy with mine, relatively hassle free. Would recommend.

Thanks for your comments Charco.

cinders13

i had to pay an extra year to my iva because of my share in the family home.