IVA (House equity)

killerkev

I am coming to the end of my IVA and at the start I signed saying that I would input 75% of my 50% share of the property equity that could be realisticly realised into the IVA I have had the property valued and due to structural problems there is no equity !! But the company handling my IVA have come back and said that I will have to continue to pay my monthly payment until a sum equal to the equity that they think is reasonable is paid ??? I can find nothing in the paper work to say the IVA can be extended beyond the 60 months ( No payments have been missed )
Can IVA'S be extended by 12, 24, 36 months ???

FoggyBrain_2

Hi Killer. Yes, I am afraid they can be extended. In older proposals ( written when property prices were on the rise ) they often stated that equity had to be paid in - sometimes even stating the amount required. In modern proposals they have a clause that asks for the equity, if there is any over £5000, to be released, but in the event that you are unable to re-mortgage (100% of the time these days) you will pay an extra 12 month instead ( which usually works out cheaper anyway. Under £5000 equity and the IVA just ends at month 60.

Many, helpful, IP's are now going for a variation of the old proposals to match up with the new protocols and you are well within your rights to ask your IP to do the same.

dancingfairy

What were the expectations of what the equity would be when the propsoal was written - it might give you a starting point but you need to negotiate the end of your IVA with the help of your IP.
You need something that is fair to you but also fair to the creditos - hence why working out what the equity was when you started and what the expectation was for the end as starting points for negotiation.
What penny in the pound did you offer orginally?if you have not had any problems and increased the amount you've paid in each year you could argue that they've already done better than predicted so you owe them less.
Even if your IP does not agree with your proposal it is up to the creditors at the end of the day whether to accept or not - obviously the IP should facilitate things and they can advise what they think is reasonable but who knows what the creidtors would agree to.
As Foggy says you could offer an extra year of payments as that seems to be the norm nowadays as a starting point and see what your creditors say?
Best of Luck
df

killerkev

dancingfairy wrote: »

What were the expectations of what the equity would be when the propsoal was written - it might give you a starting point but you need to negotiate the end of your IVA with the help of your IP.
You need something that is fair to you but also fair to the creditos - hence why working out what the equity was when you started and what the expectation was for the end as starting points for negotiation.
What penny in the pound did you offer orginally?if you have not had any problems and increased the amount you've paid in each year you could argue that they've already done better than predicted so you owe them less.
Even if your IP does not agree with your proposal it is up to the creditors at the end of the day whether to accept or not - obviously the IP should facilitate things and they can advise what they think is reasonable but who knows what the creidtors would agree to.
As Foggy says you could offer an extra year of payments as that seems to be the norm nowadays as a starting point and see what your creditors say?
Best of Luck
df

Thanks for advice, I am paying 34p in the pound and have never missed a payment the amount has not increased (due to me being on a fixed income due to a injury that left me unable to work , the reason why I had to go on a IVA !!!)
No valuation was done at the start of the IVA . The property was worth £160000, now only worth £100000 due to major problems that have cropped up in the last 5 years with a outstanding mortgage of £85000
I am not trying to get out of paying just that I was not told that if no money could be raised I would have to carry on paying.

FoggyBrain_2

OK -- it is not up to ypur IP to decide what they think is reasonable. If the property is professionally valued at £100,000, full market value, you would only get in the region of 85% on a forced sale basis (which is the value IP's generally use). So, there is no equity, even if you don't allow for the fact that you only have a 50% share! Argue this point with the IP ( not the office administrator). If you get no joy take it to their regulators.

It is not a question of trying to get out of paying --- it's a fact that you have adhered to the agreed terms of the IVA -- they cannot be moving the goalposts now !

Might I ask which company you are with ?

dancingfairy

As FoggyBrain says - I'd try and get hold of someone senior, point out that there is no equity so therefore no additional payments to be made.
I am no expert but 34p in the pound seems like a reasonable amount to pay them back.
I'm thought that the IP has to draft a variation and put it to the creditors - even if they themselves didn't personally agree with it? Do check this as your creditors may well be more reasonable than the person you spoke to.
Also as Foggy says there should be a complaints procedure you can use - i would have thought there would be an internal one and that you can go to the regulators if not happy. If they are still funny you could ask for a copy of the complaints proceudure as this might persuade them you are taking this seriously.
Best of Luck
df

killerkev

FoggyBrain wrote: »

OK -- it is not up to ypur IP to decide what they think is reasonable. If the property is professionally valued at £100,000, full market value, you would only get in the region of 85% on a forced sale basis (which is the value IP's generally use). So, there is no equity, even if you don't allow for the fact that you only have a 50% share! Argue this point with the IP ( not the office administrator). If you get no joy take it to their regulators.

It is not a question of trying to get out of paying --- it's a fact that you have adhered to the agreed terms of the IVA -- they cannot be moving the goalposts now !

Might I ask which company you are with ?

Thanks - I am not sure you can name companies on the forum !!! but here goes _Clear Debt, I must say that they have been good so far and I don't have a problem with them it is just that with only 5 payments to go I have suddenly been told I have to carry on paying into the IVA ( I had earmarked that money to start reduceing the motgage !!)

FoggyBrain_2

I am sure they have done very well for you, and that this is probably an office bod not fully understanding the ins and outs, which is why you should speak to the IP direct.

If you pop over to iva.co.uk an expert from Cleardebt regularly posts there under the name of Size5 and is very approachable and helpful.