IVA extension??

foreverautumn

fino1975 wrote: »

I'm in the final year of an IVA with McCabridge Duffy. My mortgage redemption statement says I owe £59000.00 and I had the property valued at max £65000.00 for sale purposes (even then they were unsure I could achieve this). My IP has informed me that because on entering the IVA I agreed to a £13000.00 pay out in my fourth year (at that time the property was valued at £82000.00) that my IVA will either fail and I'll be made bankrupt or it will be extended by a further year, to be determined at a creditors meeting.

Could some please advise me if this is correct?

Thanks

Not nessesarily, your IP could also do a variation meeting. To sort out the equity. If i was in your position i would insist on it. You are already above 85% LTV. So you should ask your IP that at the end of the IVA, a meeting is called for all that has been paid so far. As a full and final settlement, due to there being no equity to address now.

lexie2005

We are just in the process of getting vaulations for the same reason, we owe £80,000 & even if I tell the estate agents I need a quick sale due to relocation I think they will value at around £105,000 therefore meaning we have to extend as I don't think anyone would lend us any money on our mortgage. When I first realised this I was devastated as I saw October 2011 as the end of our repayments but I guess I have just accepted it now, we spent the money so we need to pay back as much as we can. They will actually end up with a blooming good percentage back due to our high but manageable monthly payments.....

Charco_2

fino1975 wrote: »

I'm in the final year of an IVA with McCabridge Duffy. My mortgage redemption statement says I owe £59000.00 and I had the property valued at max £65000.00 for sale purposes (even then they were unsure I could achieve this). My IP has informed me that because on entering the IVA I agreed to a £13000.00 pay out in my fourth year (at that time the property was valued at £82000.00) that my IVA will either fail and I'll be made bankrupt or it will be extended by a further year, to be determined at a creditors meeting.

Could some please advise me if this is correct?

Thanks

Hey Fino1975,

sounds like your IVA was one of the older types and things have moved on a little since then... your IVA remains one of the older types however despite the changing times. That said, as mentioned above, there's no harm in trying to have a variation meeting held on your case.

Five years ago, most credit houses demanded that an IVA produced a minimum dividend of 25p in the £ (some even required 35p in the £) but such practices i'm sure would be considered illegal and so each IVA must be weighed on it's merits rather than having blanket policy like that. It would not have been uncommon for an IVA to be worded in such a way that guaranteed a minimum dividend then, in order to gain acceptance by the credit houses.

That is now obviously not possible for you - incredibly IVAs are worded to assume a year on year growth in house prices, this is a regulatory thing, not something specific to any IVA company and of course as we've seen in this credit crunch / recession / !!!! falling out of the world thing it is a complete load of sloblock!

However, there's no reason to simply let your IVA fail on these grounds. You have complied with your five year repayment schedule, you've put your best foot forward and done your best and although there was a minimum dividend back then there should not be one now. So - as I have often said on here - negotiate!

You obviously cant pay £13k, it would be unfair (and probably impossible) to ask you to find it from somewhere. Rather than failing your IVA because you haven't kept up to the (impossible) terms, it would be much better to vary the proposal either to simply end at the end of five years or as a sweetener you could offer to continue your repayments for six months to a year and bring your IVA to a close successfully at that stage. Your supervisor will know what is likely to suit your situation and so you should discuss it with them as soon as possible! (In all situations in IVAs it is favourably looked upon that you have been proactive in maintaining or finding solutions)

kingmidas1962

I have just gone through this very process - three months into our last year we have, as required just had a valuation done, and submitted our mortgage redemption figure, and we find ourselves (just) in negative equity now (whereas at the start of our IVA we were in positive equity) and have just been told that we will not be required to extend the agreement by another year - which, as we're in the last year of our IVA means only 9 more payments! :beer:

lexie2005

What great news for you!