Equity release in year 5

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malkkky
malkkky Posts: 17 Forumite
edited 10 May 2010 at 6:39PM in IVA & DRO
Hi

I have 4 months left of my IVA (or rather I hoped I did). The original arrangement requires an equity release of £37k to complete the IVA.

I've just spoken to my mortgage provider today, and despite having ample equity, they point-blank refuse to consider a further advance.

Having done a bit of research, I suspect this is going to be pretty standard accross the high street lenders and so I am wondering what my options are.

I have read that it's possible to call a creditors meeting to propose extending the term by 1 year. My repayments are £1550/month so this would put an extra £18,600 into the IVA as opposed to the equity release of £37k.

Do you think the creditors are likely to accept this (some of the original creditors have sold their debts to the likes of Max Recovery).

Is an extra 12 months the maximum they can extend by - the thought of anything longer is too depressing to contemplate.

Comments

  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Pull back a bit there, you're saying you have AMPLE equity but how much is that?

    The fact that 5 years ago it was agreed you would pay £37K is really neither here nor there, how much equity is there now?

    You should really only be looking at 85% of the value of your home because that's all any lender would be willing to give you.
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • malkkky
    malkkky Posts: 17 Forumite
    edited 11 May 2010 at 5:40PM
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    There is more than enough equity in the property and the £37k was an agreed amount that was written into the IVA on inception. The relevant point is my mortgage provider won't advance on a point of principle (because I'm still in an IVA) and I understand most other lenders are the same.

    So my questions still remain, what are my options and is 6 years the absolute maximum that an IVA can run for?
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    No, I dont suppose that 6 years is a maximum, but it's unikely to run longer. As long as you can show that you've moved heaven and earth in an attempt to release equity there's not a lot more your IP can ask you to do... which brings it back to "How much equity would you have to release (I'm not being nosey here, the figures don't matter to me. Just because that figure was written in at the start of the IVA doesn't mean it is the figure now. It could rise or fall)
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • malkkky
    malkkky Posts: 17 Forumite
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    unlike a lot of IVA's the figure was fixed at the outset - something i insisted on. a valuation was carried out shortly after the iva was signed and a figure was calculated based on my half of 75% of the equity, which came to £37k.

    There is easily sufficent equity now to release that amount, if a lender was prepared to, but it seems they are not.
  • kathy14
    kathy14 Posts: 5 Forumite
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    Hiya, were in year 4 of our IVA and our company have just sent us a letter to say that it is very unlikely our house has any equity in it now, due to the current economic climate, and so they will extend the IVA by 6 months and then we will be released.

    Hope you got your soughted..x
  • debtinfo
    debtinfo Posts: 7,012 Forumite
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    I thought that the IP's usually had a list of very high interest specialist lenders that would deal with people in IVA's
    Hi, im Debtinfo, i am an ex insolvency examiner and over the years have personally dealt with thousands of bankruptcy cases.
    Please note that any views i put forth are not those of my former employer The Insolvency Service and do not constitute professional advice, you should always seek professional advice before entering insolvency proceedings.
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    No usually an IP will try to help you find a lender... but with the economic climate a large number of mortgage brokers have had to close up shop so there are less options about.

    If you cannot find a lender then it is likely to extend the IVA by 12 months...

    BUT KATHY - your IVA should only be extended by 12 months IF YOU DO HAVE EQUITY but cant release it... if there is no equity then you should just have been released!
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
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