D Davis
sad I’m anxious
D Davis April 20, 2010 09:07

IVA and re-mortgage

I am in an IVA. I have been approached by a company saying that we will not be able to comply with the year 5 requirement to re-mortgage being insolvent which makes sense or certainly not at reasonable rates that we could pay and therefore we will breach the agreement. Then be forced to sell the home. Is this scaremongering or true what is the experience.
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  • This reply was removed on 2011-07-28.
    see the change log
  • Andrew_F_Smith EMPLOYEE
    1
    Andrew_F_Smith (Official Rep) July 28, 2011 17:42
    Since this question was first answered, things have moved on a bit, and become clearer. In most cases, the situation is now as follows.

    If you are in an IVA you will, if you are a home-owner and have equity, be asked to re-mortgage the house in the last year of an IVA (usually month 54) and to provide your creditors with a substantial portion of this (85% of your equitable share - so 85% of half if it is just you in the arrangement and you share the house with a partner. And 85% of all your equity if you have a partner and you are in linked IVAs).

    If you can’t get a re-mortgage for the calculated equity then you will be asked to make an additional year’s contributions.

    If your share of the equity is £5,000 or less you won’t need to re-mortgage or make any additional contributions.

    What’s more, if you do release equity, your IVA contribution is reduced by the amount of the additional re-mortgage payment – so your outgoings don’t change.
    Comment
    good answer! good answer! (undo)
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