Are you in the last year of an IVA and have a house with equity? You may have to try to remortgage your house or get a secured loan to pay some of the equity into your IVA. This is called “equity release”
This article looks at the questions people have about how equity release works in an IVA. If you are thinking about an IVA, you need to know about this before signing up.
In 2023, most people in the last year of their IVA will have an IVA using the 2016 Protocol. These documents can be found here. But IVAs are individual agreements and the wording of your IVA may be different. I am only discussing the standard terms here.
Contents
How much equity do you have?
The starting point for equity release is how much your house is worth.
The cost of any house valuation should be paid for by your IVA. Often your IVA firm will commission one themselves, but if you are asked to get a valuation, you should be reimbursed for the cost.
If your IVA firm says your house is worth an amount that sounds too large, offer to get a more accurate valuation from local estate agents. It’s important to get a realistic figure. the number should be what the house should sell for, not what you might put it on the market at. In 20-23 this can be hard – tell the estate agent you do not want an optimistic number.
Your IVA firm may ask you to get a redemption statement from your mortgage lender. This says what it would cost to repay your mortgage now, including any early repayment charges. When I say mortgage amount in this article it includes these extra charges and also any secured loan that you have.
The equity in your house is then the difference between the house valuation and the mortgage amount. So if your house is valued at £190,000 and the mortgage amount is £105,000 your equity is £85,000.
How is the equity release calculated?
The 15% calculation
A typical IVA says you are allowed to retain 15% of the value of your house. So working out 85% of the value of your house determines how much equity you may have to release. If the existing mortgage (including any secured loans) is larger than 85% of the current value then there isn’t enough equity to remortgage.
There is also a de minimis clause, which says that if the remortgage would be less than £5,000, there is no need to remortgage.
Example: solely owned house, value £200,000 with £150,000 mortgage
- 85% of value is £170,000 – so this is the maximum possible mortgage after releasing equity;
- £170,000 is more than your mortgage, so you need to try to remortgage for an extra £20,000 to take the mortgage up to the 85% level;
- if your mortgage had been £165,000 or more, then there would have been less than £5,000 equity to release and no remortgage would be needed.
This example is taken from Annex 7 to the 2014 Protocol, but the calculation is identical in the 2010 Protocol.
Jointly owned houses
If you have an IVA but your partner doesn’t, when it comes to equity release your partner keeps all of their share of the equity. You are allowed to keep 15% of your half of the house.
If you both have IVAs (you may think of this as a joint IVA but actually it is two interlocking IVAs), then the calculations are much the same as if only one person owns the house. You each get to keep 15% of your half of the house value, which together adds up to 15% of the value of the whole house.
The only small variation is that because you each have an IVA, the calculation is done separately for each of you on your half of the house – so each calculation has a £5,000 minimum, giving a £10,000 minimum overall. It is possible your IVAs are worded differently, but this is the normal case.
Three extra limits on equity release
There are three extra forms of protection for you in your IVA:
- the additional mortgage costs cannot be more than half of your monthly IVA contribution. So if you are paying £150 a month, the larger mortgage can’t cost more than £75 more than your current mortgage costs;
- you won’t be asked to remortgage for an amount which means your creditors get more than your debts repaid in full plus the IVA fees;
- typical IVAs say: The re-mortgage term does not extend beyond the later of your State retirement age or the existing mortgage.
Common questions
“I’m only managing the current IVA payment with difficulty”
Here you need to ask NOW for the IVA payments to be reduced so they are more affordable. Contact your IVA firm with a list of your expenses that have gone up.
This is very important when it comes to equity release. You may think you can manage for just another few months, but the amount you are paying at the moment affects the amount you may have to pay to release equity – see point (1) above.
If you can get your IVA payments reduced, it means equity release will cost less and it may even become uneconomic so you don’t have to release equity, just pay for another year.
If the last year has been very difficult, it may look impossible to carry on for another year. It is sometimes possible to get your creditors to agree to your IVA being completed now “on the basis of funds paid to date” – that means with no extra payments or equity release.
This needs your IVA firm to propose a “variation” to your creditors because it involves changing what you originally agreed. This is more common with the rising cost of living and higher mortgage payments. But it can also happen if you have health problems or your income has reduced.
Talk to your IVA firm about this. And do it now, don’t delay.
“Do I have to pay for a 6th year if there isn’t enough equity?”
No. A typical clause in an IVA says
If the amount of the debtor’s net worth net of remortgage costs in the home at the review date is under £5k, it is considered de minimis, and does not have to be released, and there would be no adjustment to the IVA term.
So the extra year is there as a substitute in case you can’t get a remortgage. If there isn’t enough equity to release, there is no need to extend your IVA. Again it is possible your IVA is different, but this is how most work.
“My IVA company isn’t doing the calculations right!”
It is possible that the wording of your IVA is different. However, there are reports on internet forums of some very odd calculations being put forward by IVA firms… in most of these cases the IVA firm changes its mind when challenged.
If their figures sound wrong, I suggest you set out your situation using the exact format of Annex 7 of the 2014 Protocol (download) and ask your IVA firm to explain why its calculations are different. If necessary put in a formal complaint to the IVA firm, see How to Complain about an IVA.
“I am being told I have to take a secured loan”
Most people have a clause that says “Remortgage includes other secured lending such as a secured loan.” These secured loans can be at very high-interest rates. Readers have been quoted 15, 16, 19% or even more.
If your IVA firm is pushing you to get a secured loan, leave a comment below this article.
Very often the IVA firm can be persuaded to drop the suggestion if you push back hard enough and object strongly. The two main things to do are:
- argue that your current ICVA payments are too high and need to be reduced (see above);
- argue that the proposed loan would be unaffordable especially if you have a mortgage fix ending in the next few years.
Also if either of the following cases applies to you, tell your IVA firm as it’s unlikely that you can get a secured loan:
- you have a shared ownership house. Here it is highly likely that your Housing Association says you cannot get a secured loan. If your IVA firm says something like – well just don’t tell your Housing Association – you should immediately put in a formal complaint;
- with a Government Help To Buy mortgage you would need permission from the Homes England Mortgage Administrator to take out any further loans. That is unlikely to be granted.
Are you thinking about an IVA?
If you looking at an IVA, do some calculations using possible different values for your house in 5 years time. I suggest three – one optimistic, one no price change and one somewhere in the middle.
You need to ask your IVA firm to explain to you how much equity you would have to release in each of these three scenarios.
If the IVA firm just says that it won’t be a problem, persist. Say you want them to confirm how much you will have to remortgage for if your house is worth A,B or C and your mortgage is worth X.
If they won’t tell you this, or you don’t like their answers, go and find a different firm! Seriously.
And read the bit above about “secured loans” – it’s scary stuff!
Ask your IVA firm to confirm if you may have to take out a secured loan. If they say yes, ask them what safeguards there are against this being at a really high-interest rate. If you aren’t happy with their answer, walk away and talk to a different IVA firm such as StepChange.
Don’t start an IVA with a firm won’t explain in detail to you what will happen at the end. Assurances that you won’t have to take a secured loan are worth NOTHING unless they are in writing.
Updated October 2023
Inflation – can you cut your IVA payments ?
Repairing your credit after an IVA
What happens if you can’t afford your IVA?
Sami says
Hi
Hoping you can advise please
My husband has an Iva and approaching the final year they put him in touch with a company who have found him a lender willing to give a 2nd charge on the house
The house is co ownership 50/50 share and they are not in agreement with this … person offering the loan told husband not to tell the coownrrship of the plan to take out 2nd charge …this sounds dodgy so we contacted co ownership who said they wouldnt agree to this …
When we told loan guy we couldnt break contract with coownerrship he said he would tell iva company husband was refusing the offer and more or less said husband in breach of iva and could be declared bankrupt ??
Sara (Debt Camel) says
Tell his IVA firm immediately what has happened.
Not telling the coownership is a disgusting suggestion on the part of the lender. Your husband is NOT in breach of the IVA by doing what he was legally obliged to do.
If he feels very upset (I would be) he could also put in a formal written complaint to the secured loan lender saying their suggestion to not tell the cooowner was entirely inappropriate and not treating him fairly. As was their attempt to badger him by suggesting he would be in breach of his IVA and could be made bankrupt.
So at this point it’s normal for him to have to make another 12 months of IVA payments instead of releasing equity which he is unable to do. Can he afford the current monthly payments? If not, this is the time to ask for them to be reduced, see https://debtcamel.co.uk/help-ivas-cost-of-living/
Sami says
Thank you i thought it was really dodgy snd underhanded …his attitude was awful too.
I really feel for ppl he has hoodwinked into taking out another 15 years of payments.
Sami says
So glad this is finally sorted out and IP agreed to xtra year via email
Just waiting on it being confirmed in writing now
Thanks
richard says
Good afternoon Sarah, i have question.
i own a house with my ex, i have more equity in the house after i put the deposit down. After we split a few months later he advised he had applied for a IVA, i asked questions and he stated i would not be affected at all and nor would my equity in the house and there was nothing to worry about. a while later i found out a IVA had been granted so i called the company who had granted the IVA to be told i did not need to be notified about the iVA and no correspondence could have been sent to me.
Lots of time ahs passed well over 2 years to be exact and i had to speak to the company about the IVA only to be told , i should had been told a IVA was being thought of instead of already applied for, i needed to agree to a IVA being placed on the house and i would of had to sign a RX1 form to give permission to the IVA being placed on the property.
After hearing this i then advised i believed the IVA had been arranged fraudulently and have since made a complaint as i was given the in correct advice when i originally called but also have asked to be sent any correspondence in regards to the IVA on my property and also any thing that has my signature on which i am waiting for a response.
What would you suggest i should do in regards to this, do i ahve ground to get the IVA stopped as i have not agreed to this but also do i have a case to take my ex to court for fraud?
rich
Sara (Debt Camel) says
he stated i would not be affected at all and nor would my equity in the house and there was nothing to worry about.
Obviously I don’t know exactly what he said but what you have written doesn’t sound very wrong…
i called the company who had granted the IVA to be told i did not need to be notified about the iVA and no correspondence could have been sent to me.
The IVA firm should have contacted you to sign an RX1. At that point, you could have refused, and still can.
It sounds like the IVA firm cocked up here and not your ex.
do i have ground to get the IVA stopped as i have not agreed to this
You do not have to agree to the IVA. If you refuse to sign the RX1, then the IVA may not have been granted, but that is not your problem.
The IVA firm cannot force a sale of the house. If it is sold they cannot touch your share of the equity.
do i have a case to take my ex to court for fraud?
Nothing you have said suggests that.
As you do not seem to be on good terms with your ex, I hope you have documented the percentage of the equity you think is yours. But this is a general problem, not related to the IVA.
Jay says
Hi Sara,
I hope you can advise on my equity release. I have been given a solution to release equity with a secured loan. This consists of:
– 15k to creditors
– 5k fees
– 5k second charge (amigo loans charging order)
Monthly loan amount = £222
Loan term = 23 years
Current IVA monthly payment = £325
My proposal states that any new payment vehicle must not exceed 50% of current monthly IVA payment. Do you think I am right to reject this solution based upon the 50% rule? The broker is saying external debts in IVA should not be included. Any advice would be much appreciated.
Thanks for your help with this website, it is very informative and provides a lot of comfort for us readers!
Thanks,
Jay
Sara (Debt Camel) says
Did you ask for the Amigo charge to be cleared with the loan or did they recommend it? Or insist on it?
Have you or the borrower made a claim to the Amigo scheme?
Is this loan variable rate? If it is fixed, how long for?
The current £325 a month payments – how affordable are they?
Is your current mortgage rate fixed? When does it end?
Is there anything unusual about your mortgage – is it interest only? Is it a HTB? Is it shared ownership?
Jay says
Thanks for the quick reply.
The lender has to clear the amigo loan in order to offer a new one as it is a second charge. So they have insisted.
I’m the guarantor, and no claim has been made against amigo.
The Loan is fixed for 5 years.
£325 is affordable atm. But obviously cost of living will just get higher.
I have just fixed my current mortgage deal for five years which has resulted in a slight increase.
Nothing unusual about my current mortgage. It is repayment with myself and wife joint owners. The IVA is joint also.
Sara (Debt Camel) says
it is a shame no claim was made to Amigo as that could have removed the charge, but it is now too late to do this.
Was the Amigo charge after the IVA started? Are you currently making any payments to it, if so how much?
Jay says
Amigo charge was there before IVA. Not been able to make payments towards it. I thought I’d pay it when selling the house.
Regarding the secured loan. My understanding the equity release should not exceed 50% of current IVA payment. Even after this clause I proposal:
The amount of the money introduced into the arrangement will be the mortgage proceeds less the costs of the remortgage, including any costs to redeem any existing mortgage and/or secured loan.
Do you think I have a chance of arguing the new payment for equity release is above 50% and I’d prefer to pay an extra 12 months. Cost of new loan would be £222 and current IVA payment is £325
Sara (Debt Camel) says
I haven’t come across a case where the secured loan is intended to repay an existing charge.
There should be a term in your IVA that says something like:
“The incremental cost of the remortgage, including cost of any new repayment vehicle, will not exceed 50% of the monthly contribution at the review date.”
Point out to the broker that there is nothing in there to say this does not apply if other debts are also being cleared by the secured loan. Logically the same principle should be applied, the increase in your costs caused by the secured loan should not be greated than half your IVA payments. The fact you are not paying anything to this Amigo loans means you don’t “save” that payment by having it cleared so the whole cost of the secured loan is an addition to your current mortgage payments.
If the broker doesnt agree, send them a formal writen complaint bu email saying they are not treating you fairly, that you are being asked to pay more than half the IVA payments in this equity release which was not what you agreed to when you took the IVA. Add that it is unreasonable for you to have to take an expensive secured loan to repay a charge which you do not have to make any payments to and where Amigo has a policy of not seeking an order for sale.
Also send a similar formal complaint by email to your IVA firm (who is it?) and copy this to your Insolvency practioner who will be anmed on your IVA. I can give you the IP’s email address if you let me know their name.
Jay says
Thanks so much for your advice, I can’t begin to tell you how much this helps me and I’m sure others.
That 50% clause is the exact one in my send proposal which I have shared with the broker. They replied back saying the new loan monthly amount adjusts for the amigo loan.
The firm is creditfix and you can probably guess the broker. If you can send me details of where to send my complaint that would be great.
I am truly honoured you have made the time to give me advice on this. I might refer the broker to this thread if you don’t mind.
Thanks Again!
Jay
Sara (Debt Camel) says
If you have that exact clause, you probably have a 2016 protocol standard IVA. In that case there will also be a clause that says:
Where the net worth is released by way of a secured loan, consideration should be given to the term and interest rate applied to the loan and the principles of treating the consumer fairly
This will be useful if this complaint has to go to the Finacial Ombudsman. You cannot take a complaint about Creditfix to the ombudsamn but you take a complaint against the broker.
They replied back saying the new loan monthly amount adjusts for the amigo loan.
I suggest you say that that is not relevant as you do not have to make payments to that charge. So the whole cost of the secured loan is an extra amount that you would have to pay and this should not be more than half your IVA payments.
Add that you would like this treated as a formal complaint and you will be sending it to the Financial Ombudsman if they do not either reduce the cost of the loan or tell Creditfix they cannot make an offer of a loan in this situation.
You could also think about why you cannot afford to pay that much money. Many people at the end of an IVA have house repairs they need to make or need to replace their car for example.
do you know who the IP is? Creditfix has several.
Jay says
The IPs seem to be joint Samantha Warburton, Katy Walker in various letters I’ve had.
That treating fair comment doesn’t seem to be in my proposal even though it says it is 2016 protocol. Interesting!
Thanks again for your help Sara
Sara (Debt Camel) says
That is interesting… the protocol is here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/644976/IVA_Protocol_2016.pdf
Use sam.warburton@creditfix.co.uk then. let me know if you don’t get a response in a few days
Jay says
Thanks Sara, will do. Can an IVA firm pick and choose what they want to include from the protocol?
My firm was originally Knightsbrodge and after 2 months they folded and sold it on to creditfix. I have read this a lot on here from folks. there is something dodgy going on here with these firms
Jay says
Hi Sara, just to update you. I have sent an email to the broker explaining that I the think the loan proposal doesn’t meet my proposal clauses. i.e. 50% and being treating fairly.
They have been in contact with credit fix to try and explain the amigo charge should not be paid by creditors.
I said it’s not, it’s through the equity release. Any way, the broker hasn’t answered my questions but just saying they believe they have met the t’s and c’s of my proposal with out answering my points.
Broker has also said that following my instructions they will close the file and credit fix will be in touch. I have also sent an email to the IP saying the proposal is not suitable.
Do you think the IP can fail my IVA despite my reasonings? I haven’t sent a formal complaint to broker or creditfix yet. Should I?
Sara (Debt Camel) says
I suggest you wait and see what your IP comes back with. Which may well mean waiting until January. Let me know if you haven’t had a reply by the 7 January? Or if you get a reply and it isn’t helpful.
Jay says
Thank you Sara as always
Jay says
Wow Sara. So I’ve just had an update from the IP. She notes my points of concern and address each point of a) above 50% Iva payment, b) turning the amigo secured charge into a 23 year loan. IP has given me two options for either get the broker to recalculate to 50% Iva payment or for me to extend Iva by 12 months. Not surprisingly I’ve gone for the latter!
This is all done to your advise Sara..amazing! You deserve to be honoured for your services.
My advice to others is don’t believe the equity release broker, in my case it was select partnership. They really don’t care about you being treated fairly and want to grab the highest fees they possibly can get.
Merry Christmas and have a great new year!
Jay
Sara (Debt Camel) says
Good to hear! Happy Christmas to you to.
Em says
My husband entered into an IVA with Creditfix and he is now in his 5th year. They wrote to him a few months ago to say he had to release equity and a company would be in touch. They made contact and took our details etc and then came back that equity release was not an option.
Today he has received an email from Creditfix saying that there is equity available. He is required to approach 2 mortgage lenders and send proof of outcome. If no remortgage or secured lending options are available, or affordable, he should investigate the option of a third party contribution (?)
I understand that a 6th year will need to be entered in to if none of the above is possible. I am looking for a bit of advice as I have not agreed to or signed anything and he is paying about £350-400 per month.
Sara (Debt Camel) says
He is required to approach 2 mortgage lenders and send proof of outcome.
This is pretty simple. he can ask his current mortgage lender and any other high street leender.
he should investigate the option of a third party contribution
He can just reply that none of his family are in a position to give him the money to settle this. (I assume that is the case.)
he is paying about £350-400 per month.
How affordable is that at the moment after this years price rises?
Is the mortgage fixed or variable at the moment? If fixed, when does the fix end?
LC says
If you start an IVA and in the meantime you inherit your family house abroad in Europe (no house ownership or mortgage in the UK), what happens? Supposing that the family house will not be rented and no income will be generated from that. It will just be in your own name. Also supposing that you make your IVA payments as usual and abide to your IVA agreement. Is that house at risk?
Sara (Debt Camel) says
You are legally obliged to tell your IVA firm about your inheritance, see https://debtcamel.co.uk/inherit-dmp-dro-iva-bankruptcy/ which refers to money but also applies to inheriting property. Yes the house is at risk.
Luke says
Quick question,
I have a joint mortgage with my ex-partner, when I did my IVA my ex-partner did not sign anything to do with the IVA, at the end of the 5-year IVA term how can I remortgage without the consent of my ex if she’s on the mortgage?
Thank you
Sara (Debt Camel) says
You can’t. Explain this to your IVA firm
Thomas says
Hi Sara. I’m in the last year of my Iva. I have a house with equity. I only have 4 years mortgage left and I’m 68 years old. Will I be forced to extend the length of my mortgage to be able to afford equity release thus extending the length I need to carry on working?
Sara (Debt Camel) says
How long was your IVA – 5 or 6 years?
Thomas says
Hi Sara. 5 years.
Sara (Debt Camel) says
ok, well the normal terms in an IVA are that a mortgage cannot be for longer than your current OR until your state retirement age. So as you are past the retirement age, that would be 4 years and no extension.
It is therefore more likely that you will be asked to make payments for an additional year to the IVA instead of releasing equity.
Are your payments currently affordable? Have your mortgage payments been going up with the rising interest rates?
Thomas Flynn says
Hi Sara. Thanks for that information. I’ve just applied for a reduction in payments due to the escalating cost of living and I’m waiting for a reply on that. They can reduce payments by 15 percent without referring to creditors. I’m reluctant to have my Iva go on for any longer if it was more than this percentage. I’d be happy though if I was allowed to do another twelve months rather than equity release.
Sara (Debt Camel) says
They can now reduce by more than that, see https://debtcamel.co.uk/help-ivas-cost-of-living/
Sophie says
Hi there,
I currently pay £154 IVA its due end in December (5 years)
I jointly own property mortgage left is £83000 , according to my lender website the property is now worth 167,000.
I asked my IVA what my balance is £34,900 , they haven’t provided me with any directions what to do, to try release equity they just said contact mortgage advisor.
Should I expect paperwork from them shortly?
I’ve done some calculations for borrowing more ( If lender would actually borrow more!) cheapest fixed rate deals are coming out at £194-£213 for the extra mortgage amount . This is more than my current IVA monthly amount of £154.
My current mortgage fixed rate has finished, am I allowed to fix another deal as this is already putting me under lot pressure each month it has increased by £180 per month on top usual payment.
Thank you
Sara (Debt Camel) says
The extra costs of a remortgage or a secured loan aren’t allowed to be more than half your current IVA payments – as your calculation shows, this isn’t going to be possible. Ask your IVA firm exactly what you need to get, pointing out there is no way that the additional cost is going to be less than half of your current IVA payments.
Has your monthly payments been reduced because of your increased mortgage costs?
Getting another fix – who is your mortgage lender?
Sophie says
Ok thank you
My mortgage lender is Nationwide but I wasn’t sure I was allowed to fix in another deal without the IVA (financial wellness group) permission?
I’ve also received news today company I work for has gone into administration!
Thank you for your help with this
Sara (Debt Camel) says
you need the permission of you IVA firm to borrow more money. But a new fix on your current mortgage is not borrowing more money, it is just getting a cheaper rate on your current mortgage.
Let me know if you have problems getting a new fix from Nationwide – you shouldn’t.
Very sorry to hear about your firm.
J N says
Hi, I am currently at the end of my 5th year of IVA with Payplan. Equity release is not an option.Can they enforce you make the payments for the additional year.The terminology I have read is “may ask you” rather than must.Payplan are being quite difficult, I have asked that the y propose to the creditors that I pay 6 months rather then the full year as and have given very valid reasons for this, we desperately need to address damp in our house. Despite having my annual review 4 weeks ago when they increased my payments by £10 a month they now want to increase it by a further £26 a month or the creditors will query my expenditure.The cynical part of me thinks this is because Payplan want the fees for another 12 months rather than 6 months. Thanks for any advice.
Sara (Debt Camel) says
Despite having my annual review 4 weeks ago when they increased my payments by £10 a month they now want to increase it by a further £26 a month or the creditors will query my expenditure.
What part of your expenditure do Payplan say is excessive?
How large are your monthly payments at the moment?
Heather says
Hi,
I have had an IVA for 5 years. In April this year I called Ebenagte office and asked why no payment taken. I was advised that I hade made the last payment in March and the file had gone to their closure team. You can imagine the relief! This week I have had an email from Creditfix regarding equity clause. I had not been contacted by them since the last payment. I replied to them covering the conversation I had with their offices in April and sent screenshots of attempts to remortgage as requested.
They replied today asking if affordability is the issue.
I was made redundant end of April and currently applying for every job going. I have a redundancy payment to keep me going for a few months and I know I can keep up to six months.
Can they force the twelve months extension? and why has it taken them three months to come back to me re equity clause? totally stressed out.
Sara (Debt Camel) says
So you can reply that affordability is a major problem because of the redundancy.
Were you already struggling to make payments before the “end” of your IVA?
You can certainly argue that you haven’t been treated reasonably as since your redundancy you may have spent money differently if you had known that your IVA had not completed. but in this sort of situation it also good to prepare fallback arguments, eg that any extension would have been unaffordable anyway.
Heather says
Hi Sarah,
I called their office at 9am this morning after I messaged you and broke down over the phone. I explained my concerns of having no comeback from them since they advised that I had made the last payment in March, My circumstances having changed at the end of April and sent all documents relating to redundancy . In addition I have made every single payment on time (survived a redundancy in 2020). Have asked they submit to the creditors to close off on affordability issues.
Have managed all of this on my own as a single mother and no one has ever known about my IVA but today just had enough and needed to reach out
I will keep you posted.
Can I just add to anyone reading this that I have read your forum for a long time seen many posts so had the confidence to ask. There will be many out there should do the same as you are a godsend.
Thank you
Sara (Debt Camel) says
I hope Creditfix are reasonable about this. Fingers crossed for you.
Heather says
Hi Sarah,
Had a reply from Ebengate/Creditfix re valuation and another year of payments at the same figure of 335 per month from 4/9.
Called them to ask where valuation came from double the value and will wait for their reply.
I have been prejudiced as no annual review since 4and/22 and no review at month 54 advised IVA last payment 3/23 and here we are six months down the line told to pay 12 months more at 335 per month
I reminded them that I submitted all documents re redundancy and sent three months statements in June emails since then saying all under consideration then just a letter yesterday ironically signed from Tim Pope first time seen his name since he took over as Practitioner,
Really stressed I am hoping to secure new job but the salary will be much lower than my last job
Can I argue all the above?
regards,
Heather
Sara (Debt Camel) says
I suggest you reply that you have already explained that you have been made redundant and at the moment you are out of work. Mention how many jobs you have applied for. Say you are hopeful you may be offered a job that you have recently applied for but the salary is much lower and you won’t be able to afford any payments (if that is accurate.)
Michael M says
Hi,
I have done my 5 years with my Iva, and now have a letter saying I have equity in my home. My mortgage is £600pm, me and my partner own the house 50/50, but it is only me who had an Iva. How would this work? Do they want 85% of my half of the equity? I think my home is roughly worth £110k and I have £55k to pay. I’m so confused how thus will work and whay will happen, I just want this to be over, please help.
Mike
Sara (Debt Camel) says
how much have your monthly IVA payments been?
is this amount affordable?
are you on a fixed mortgage rate?
Jay says
Hi Sara, 6 months ago you helped me to sort out my equity issue. I’ve now paid a lump sum equivalent to 12 months Iva payments for equity in lieu and closure is imminent. This is all largely due to your help so thank you so much! A question I do have regarding the Insolvency register is that 6 years has elapsed since IVA started. I was under the impression removal from the register would be automatic after 6 years, is this not the case?
Sara (Debt Camel) says
No, it’s 6 years or after your IVA completes, whichever is longer.
Nathan says
Hi,
I have a six year IVA. The sixth year was written in at the start to negate the need to extend by a year.
I have it in writing that they cannot extend to a seventh year. And I chased THEM at month 54 to cover the remortgage clause. (I completed some details and they reviewed it but no action at the time, I assumed it was complete)
Now in month 63/4 they have asked me to work with their specialist to remortgage.
So questions:
Do I HAVE to use their provider? (The Select Partnership)
As I am already into the sixth year, can they even ask me to remortgage?
Sara (Debt Camel) says
A six year IVA is sometimes offered to remove the need to release equity at all.
What exactly does it say in writing that the IVA cannot be extended?
How manageable are the IVA payments at the moment? Has your mortgage been going up?
Nath says
Thanks for the reply.
The proposal, did say that I need to attempt a remortgage, albeit it says to use an independent FA.
I’m not exactly sure what it says about extending it, however I sought clarity around in in December via the compliant process and they confirmed both verbally and in writing that I cannot extend beyond 72 payments.
The payments are manageable, I’ve done 63, another 9 feels very easy.
I just don’t want to be railroaded into a secured loan.
I would assume that most levers would decline any credit, which would make the problem go away?
Sara (Debt Camel) says
It makes no sense to say your IVA cannot be extended for anothe 12 months but you have to try to release equity.
The simple approach now is to try to prove that any secured loan will be unaffordable. Is your mortgage currently fixed?
Mr Nathan jones says
Yes, I completely agree but I think it’s due to my IP being very unorganised. I think this should have happened a year ago. Likely due to them inheriting the IVA.
Yes fixed. Also a proportion of my income is overtime, so I have no intention of continuing to earn beyond my salary after the IVA is complete.
Am I obliged to use their broker at all?
Given that I’m already in month 63 I struggle to underarm how they can continue this process?
Perhaps they’re just ticking boxes?
Sara (Debt Camel) says
What is your current mortgage rate and when does your fix end?
Mr Nathan jones says
Current rate runs out in two years and is much lower than I’d achieve now
Sara (Debt Camel) says
So if your mortgage went up now, would you be able to afford the IVA payments? (Hypothetical question)
Mr Nathan jones says
Arguably not.
I got a reply though.
I was correct that this should have happened at month 54.
I’m NOT obliged to use their Broker
All I need is to apply via my current provider (likely to say no to equity)
They confirmed that it cannot be extended beyond month 72.
Sara (Debt Camel) says
Then that sounds straightforward.
Mr Nathan jones says
Certainly does!!!
Thanks for the advice on here, it’s really difficult to find good advice on IVA. This website is the only place I’ve found in five years.
Nathan Jones says
Hi Sara, just to update you…. we were correct.
Halifax declined equity release, the IP have accepted this and agreed that my term remains 72 months (9 remain which feels pretty easy to achieve).
Thanks again.
Anna says
I have a 72 month IVA & received a letter stating I’ve been referred to their ‘specialist’ to remortgage.
my IVA itself states: “seek advice from an independent financial adviser…”
– do I have to use their provider (The Select Partnership)
The duration clause in my IVA states: “It is proposed that the IVA should last for 72 months… The duration of the arrangement may be extended”
– (IVA was approved 2 July 2018) does this mean they can indefinitely request more from me after this 72 months?
additional mortgage or secured loan payments are not affordable. My IVA payments are £132, mortgage £428 (FT up July 24). Is my understanding correct that any remortgage/secured loan repayments cannot exceed 50% of the current IVA repayment amount on top of the current payment? So, any product they make me pursue cannot exceed £494p/m? I’ve not requested formal valuations yet but I anticipate there’s c.£68k equity in the house. Probably value of £125k and £57k mortgage left.
Sara (Debt Camel) says
Why was your IVA 6 years long?
Your mortgage is fixed until July next year? How much do you expect it to go up then?
Is there an early repayment charge?
How affordable are the current IVA payments?
Once your IVA is completed, they can no longer task for more from you. The bit about extending is if you have had payment breaks.
Anna says
Thanks for getting back.
I was under the impression it was due to being a home owner, I’ve sought clarity again from them on that. I’ve never missed a payment, reduced payments or asked for payment breaks etc.
If interest rates don’t come down, a quick un-personalised check with my current provider suggests £577-611. I’m sure there’s early repayment charges too.
My main concern with their correspondence is that they’re leaning me towards a company they’re affiliated with who’ll seek the most unaffordable/forced route to get a lump sum, which’ll leave me in more debt.
Long-term wise there’s no way I can afford to pay more, the whole point of entering the IVA was because of this, if re-mortgaging and loans were an appropriate mitigation to the debt, I’d have done that to begin with, not enter an IVA to leave it with even more debt.
Sara (Debt Camel) says
The best think with this situation is to object to everything possible.
Ask your mortgage lender if there is an early repayment charge.
Tell your IVA firm that you won’t be able to afford to pay any secured loan or make any IVA payments once your fix ends next year.
Anna says
Thank you,
Does this mean I can refuse to engage with the process, or still have to go through getting the house valued, equity release/secured loan options etc but state that any options that come out of that aren’t feasible/affordable?
Many thanks
Sara (Debt Camel) says
Just try pointing out the obvious now. If this works, great.
If it doesn’t, go through the process and tell Select you won’t be able to afford a secured loan once your fix has ended so they should not offer you one.
Anna says
So, finally got a response after sending them information stating I can’t release equity. The wording in the IVA is along the lines of ‘The arrangement, as modified, provides for 72 monthly payments of £X, along with the potential equity in a property being assessed in the final year of the arrangement’
I was under the impression the additional year was in lieu of equity release not in addition to it. Does this seem right? 6 years is up in July 2024, now they’re saying unless someone can gift me 12 more months, I’ll be paying until 2025…
Sara (Debt Camel) says
So have they accepted that you can’t release equity?
And they are saying you will have to pay an additional year instead?
Mr Nathan jones says
Hi, I had the same trouble.
Were you referred to The Select Partnership?
Anna says
Hiya, yeah that same company (my IVA is with Debt Management).
Reading the wording in my IVA, seems they can’t mandate I use them, instead I can seek my own independent advice in terms of offers from providers (hopefully!).
Anna says
*Debt Movement even
Nathan says
Ah ha, snap! I don’t suppose that they inherited your IVA from another company did they? Aperture???
I have had the exact situation…. This week. Here’s what happened (happy ending)
I simultaneously contacted DM and Select.
I called Select to ‘enquire’ (but really just to clarify that them that my proposal directed an independent FA) and after some resistance they admitted that I was not obliged to use them. They claimed that I needed to use a specialist in IVA equity though (not true).
I also complained to DM via the complaints email address (the only way I communicate with them) and they replied that I did not need to use Select and that they would contact them to tell them not to contact me
I then clarified that all I needed to do was apply for equity release (no specific amount) via my current provider or use and independent FA
Lastly I clarified that if equity release Is declined my IVA will complete at 72 months. They confirmed.
Delighted, as I suspect Halifax will decline me equity release without much consideration and also DM left it to month 63 rather than 54 (ooops) so I’m 9 months from competition.
Good luck. I think you’ll win they discussion if you persist.
Nathan Jones says
Hi Anna,
Just to update you.
Debt Movement have accepted that I can use my current provider. They declined my online applications for equity release. Debt Movement have accepted this and will not extend my term beyond 72 months.
One general bit of advice I have massively benefitted from is obtaining my original ohone call recordings. It’s a great reference and has helped me with a few arguements.
Good Luck (don’t allow them to pressure you into anything)
Victor Morgan says
I had the exact same issue with Ebenagate. My payments stopped in May this year. I called to question as to why this was the case and was informed that they my IVA had, in fact, ended. Happy days! I then received an email last week regarding the re-mortgage clause. I had expected this, but understood that the IVA provider would contact me six months before the 5th year, but they did so two months after this! The communication from them is so poor. I have, however, been rejected by two mortgage providers for a re-mortgage and have said that I will need the required 12 month extension. they have said they will be get back me regarding this.
My payments haven’t been reviewed since June 2022 and the cost of living has increased significantly over the last year. Should I expect to continue paying the £369.00 per month or will they review and potentially reduce this? I have received several windfalls during the course of the IVA such as work bonuses and have paid additional funds into my arrangement and have never missed a payment. Is there any chance my IVA could end without the six month extension or at least have reduced costs?
Given they did not contact me regarding the re-mortgage clause until 2 months after the five year anniversary of the approval of my IVA, should I complain and if so, is there anything to gain by doing this?
Sara (Debt Camel) says
My payments haven’t been reviewed since June 2022 and the cost of living has increased significantly over the last year.
Tell them this and say you need the payments reduced.
if so, is there anything to gain by doing this?
it isn’t clear that there is.
Louise says
Hi
I am nearly 4 years into my IVA
I’m separated from my husband
I have 4.5 years left on My mortgage I think equity about 60-£80,000
My ex husband is on the mortgage
My wages literally at the minute cover the whole of my bills getting help from family to eat
Will I have to release equity and if so how??
I thought I wasn’t able to get credit with being on an IVA and my ex husband will not sign to extend mortgage I pay the mortgage as he isn’t in a position too but will have paid 25 of the 30 years mortgage
How does this work
Sara (Debt Camel) says
how large are your IVA repayments at the moment?
is your mortgage variable rate or fixed, if fixed when does the fix end?
Louise says
They are £136
Ive just fixed for 3 years due to rising interest rates
Sara (Debt Camel) says
and your mortgage has gone up how much?
Louise says
It’s gone up between £200-£250 a month since I started my IVA
It’s been going up every month
I’m not sure how much it would go up if I remortgaged to release equity
Sara (Debt Camel) says
Your ex would have to agree to increase the mortgage or to take out a secured loan (the other way to release equity). He won’t do that and anyone no lender is going to lend to you as it would be unaffordable.
That means your IVA firm is likely to want to extend your IVA by a year instead of releasing equity.
However the current payments are clearly unaffordable for you. I think you should talk to your IVA firm and ask for a reduction in your payments, see https://debtcamel.co.uk/help-ivas-cost-of-living/
Nina says
Hi
My husband is at the five year point in his IVA and has been advised by Debt Movement he has equity in the house and must try and remortgage and have referred him to the Select Partnership.
The mortgage is in my sole name and has been since we bought the house (five years prior to the IVA.) however I was pressured into signing a document on the house when he took the IVA out, so that if the house were sold the IVA company would be made aware, they said this was because I benefited from the debt due to me not working due to ill health.
The company is demanding evidence of my earnings and insisting the remortgage application should be a joint one, to which I don’t agree and have declined to provide any evidence of income, can they demand a partner be a party to the remortgage?
Sara (Debt Camel) says
Ignoring your questions as there may be a simpler way to tackle this. Is your mortgage on a fixed rate at the moment? When does it end?
Nina says
Hi. the mortgage is fixed rate and ends in 2027
Sara (Debt Camel) says
and what is the current rate? Will you be in difficulty if it goes up a lot?
Andrew says
Hi Sara, I am Nina’s husband. it is a 7 year fixed-term at 1.99%, expiring on 2 May 2027. We currently pay £349 per month. We would be in some difficulty if it went up a lot
Sara (Debt Camel) says
How large is the current IVA payment? Is this affordable?
Andrew says
It is £544. and is manageable
Sara (Debt Camel) says
Can I check that this is a normal mortgage and not shared ownership?
When Andrew took the IVA, was it explained to Nina that he she would have to give her permission for a remortgage or a secured loan?
A remortgage won’t be possible – the extra costs could not be more than half the 544 a month he is paying to the IVA. With todays mortgage rates that is not going to happen…
It is possible in theory to take out a joint secured loan when only one person owns the property but this would be very unusual.
Andrew says
It is a normal mortgage and not shared ownership. My name is nowhere on the deeds.
There is a lien on the property with the IVA company and we were advised they would try and secure funds from the property in a phone call but the guy also said no company would touch me
Sara (Debt Camel) says
was this phone call from Select or from your IVA company?
Andrew says
it was my IVA company when the account was being set up
Sara (Debt Camel) says
Oh I am afraid that won’t help unless they put it in writing
Jo says
Hi just looking for some advice please. Had a call with select partnership today to go through re-mortgaging.
5year iva due to finish May 2024, all payments have been made on time £132pm
I have a lot of equity in my home, probably £140k, fixed rate of 1.59% and tied in till July 2026 I pay £300pm.
I also have a joint secured loan on my property with my ex partner, we each pay our share. Select said today they may have to add the secured loan to a remortgage, I am not happy with this, it means I take on £16k of that secured loan when as it stands now I only have to pay £8k. My ex partner will refuse to make changes even though he’ll benefit cos we Lee on really good terms and wouldn’t do anything to worsen my finances.
Surely remortgaging to pay off the iva and adding on the secured loan will be a large increase in monthly payment with current interest rates?
I struggle with my mental health and anxiety with finances and it’s really stressing me out thinking I’ll be forced to be worse off.
Thanks!
Sara (Debt Camel) says
My ex partner will refuse to make changes even though he’ll benefit cos we Lee on really good terms and wouldn’t do anything to worsen my finances.
That’s not clear – are you saying your ex will want to help you?
are the £132 a month payments affordable at the moment?
How large is the mortgage? How large is the secured loan? What rate is the secured loan and is this fixed?
Jo says
My ex and I are on good terms, if me taking on the loan myself would be worse financially for me he wouldn’t agree to it and would continue as we are.There is £16k left on the loan I can’t remember the rate but it’s fixed and we each pay £232pm and 2 years left on it.
Mortgage is £45k just in my name
£132 at the moment is fine and im paying it.
Sara (Debt Camel) says
can you find out the rate on the secured loan? Also if there are any early repayment charges on it?
The extra cost of a secured loan over and above the current secured loan cost cannot be more than half your monthly payments…. as your minethly payments are so low, that looks pretty unlikely to me.
Heather says
Hi Sara,
Had a call from Ebengate today. I explained that once again I forwarded all documents to Creditfix and still await a reply.
Ebengate wanted me to arrange a standing order as previous now closed. I refused to carry on with the call and explained I have been waiting months for confirmation and an extra year payments re equity clause cannot be made due to affordability.
Really stressed out over all this endless emails sent and clear no communication between Creditfix and Ebengate just lets set you up with a standing order!!
Sara (Debt Camel) says
I suggest you email Samantha.Warburton@creditfix.co.uk and explain your situation.
Heather says
Hi Sara,
I emailed her on Monday this week no response yet. In the meantime a countless barrage of calls now texts re missed payments from 4/9/23 well nothing agreed!!. Have now taken my case to Resolver.
Totally stressed out.
Sara (Debt Camel) says
Resolver is not the route I would choose. Have you sent a formal complaint to your Insolvency Practitioner? Who is it? It will be a number person on your IVA documentation?
Heather says
Hi Sara,
Samantha has just emailed me and is looking into the matter for me.
The only contact I have ever had from Tim Pope was on the letter re 12 month additional months.
I will keep you updated
Heather says
Hi Sara,
A variation meeting is now been held on the 19th October with creditors to close the arrangement with the funds paid to date. Samantha and her team have been supportive due to my circumstances since April this year. I have secured a job now worried that I may fail enhanced DBS due to IVA.
Heather
Sienna says
Hi. Im looking for a definitive answer to a letter I’ve received from my IVA supervisor. Im 5 years into my IVA, received a letter from Debt Movement (my IVA company) saying following an initial review they believe there is a possibility that equity can be released. Now this is where I disagree with them. My husband and I do not own 100% of our property, only 80%. The other 20% is owned by Help to Buy. We took an equity loan out in 2016 when we bought our property. From memory, I am almost certain that our solicitor told us that equity wouldn’t be able to be released until we own 100% ownership (i.e. paid 20% back of whatever the market value is when we come to pay it back) . Effectively there are 2 charges against our property. So surely the “equity clause” is null and void. When I entered into my IVA in 2018 I remember asking this question and was assured it was unlikely due to the above and that in lieu of being able to release any equity, I would just be required to make another 12 months worth of contributions instead. In fact my online portal with Debt Movement is still showing another 12 months contributions due. In addition to this, my circumstances have changed drastically since I obtained my mortgage. I no longer work due to health conditions and my sole income is only disability benefits. My husband is the only breadwinner and earns around 12,000 a year
Sara (Debt Camel) says
Your IVA was 6 years at the start?
The Help To Buy – this is the government scheme (Confusingly some house builders offer different schemes with similar names)?
Is the IVA in your name or do you both have one?
Is your current mortgage on a fixed rate – if so when does this end?
Sienna says
Yes mine was 6 years from the start. My husband’s contract mentioned the same clause about the 12 months in lieu payments, but his IVA is showing as paid & hes been removed from Insolvency Register.
Its a Help to Buy Equity loan we have with help to buy wales.
IVA’s – we had one each
Mortgage rate ends 31/10/23 £379 pm. From 1 Nov 2023, payment going up to £540 pm (new 2 year fixed deal till 31/10/25)
Sara (Debt Camel) says
so from Nov you will be struggling to make the mortgage and carry on with IVA payments?
Sienna says
It will only be possible because I have recently had a PIP review and have been awarded enhanced care so thats giving me a little bit extra but it will be a struggle but i assumed only I would have to make another years payments so I had factored that in….before these blinking letters turned up.
Effectively yes but with my husband’s IVA “ending” or so we thought before he received the same letter as me about IVA release…
yes it will be a struggle but i have always planned for another 12 months of payments my side
Sara (Debt Camel) says
ok so I suggest you go back to DM and say:
1) it is my understanding that it is not possible to release equity where there is a Help To Buy loan. My solicitor told me when I bought the house that I wouldnt be able to release equity until I owned 100% of the house. This is what gov.uk says https://www.gov.uk/guidance/how-to-remortgage-your-help-to-buy-home-and-borrow-more-money
2) even if it was possible, it would be unaffordable. I no longer work due to health conditions and my sole income is only disability benefits. My husband is the only breadwinner and earns around 12,000 a year
3) I have been expecting to make another year of IVA contributions but these will be struggle as my fix ends 31/10/23 and my payments of £379 pm will go up to £540 pm. Will it be possible to reduce my IVA payments because of this?
Rebekka says
Hello, I am awaiting my next phone call with The Select Partnership where they will advise if I can release equity and what my options are. I pay £370 IVA per month, mortgage fixed at 2% until Jan 2026 and is £260, House purchased for 80k, remaining mortgage to pay is 56k, Halifax online valuation £115k, I’m panicking like mad that there will be equity in the house and I will be forced to release it. I’m 34 years old and my husband and I have always paid half of the bills but the mortgage is solely in my name as he was in an IVA when I purchased it. Am I within my rights to refuse equity release and offer the extra 12 months of payments?
Sara (Debt Camel) says
How affordable are the IVA payments at the moment?
Rebekka says
Manageable, in month 54 of IVA
Sara (Debt Camel) says
so I am not asking if you can scrape through the next few months – what is important here is that if the monthly payments are too high, then you need to ask for them to be reduced as that will reduce the size of any secured loan you may be offered – the cost of the secured loan cannot be more than half your monthly IVA payments.
You can also argue that you should not be given a long term secured loan that it is highly unlikely that you will be able to afford in 2 years time when your mortgage is likely to at least double.
There clearly is equity in the house. But it is all yours…
Also how large were your debts that went into the IVA? And how much have you paid in so far?
Rebekka says
Thank you – this is why I am confused as my original debt amount was 40k, of which I have paid almost 18k off, my IVA total is to pay back 26k off the 40k original debt.
So would they attempt to release equity of 8-10k to end the IVA owing amount OR does it go against my original 40k debt amount? As in if they can get more than 10k to go against my original debt amount as opposed to the agreed IVA amount then they would push for this so that my creditors get more than expected?
Sara (Debt Camel) says
They can attempt to release the 40k plus the IVA fees.
You IVA ”total” is just an estimate at the start. It isn’t a maximum you have to pay.
If you cant argue for a secured loan to be unaffordable because your current costs and increased and your mortgage will, this IVA could prove to be very expensive decision.
Rebekka says
Even though half of that equity is technically my husbands albeit he is not named on the mortgage?
Would they take into account the 18k paid to date off the original 40k? So attempt for no more than 22k equity release?
Am I within my rights to refuse the equity release on affordability grounds? And request for them to consider allowing me to pay the IVA for an extra year?
I cannot understand how if I’ve paid 18k to date they could then make me release upto another 40k on top, surely I could have avoided the IVA entirely and just released equity in the first place?
So I can actually end up paying more back than my original debt amount? :(
Sara (Debt Camel) says
Even though half of that equity is technically my husbands albeit he is not named on the mortgage?
Do you have paperwork proving this?
yes they take into account what you have paid. So they wouldnt try to release more than 22k plus the IVA fees…
Am I within my rights to refuse the equity release on affordability grounds?
If you can show it isnt affordable then Select should not offer one to you.
And request for them to consider allowing me to pay the IVA for an extra year?
If you cant release equity, paying for another year is the norm.
This is another good reason to argue (if possible) that you current IVA payments are too high because of x,y and z and should be reduced.
Jane J says
Hi
I am in the process of selling my house, I am only 12 months into my IVA however I need the equity from my house sale to pay for rental property for me and my daughter.
Can the IVA take my equity or does it come to me first via solicitor? Also, am I within my rights to cancel and IVA
Sara (Debt Camel) says
Who do you need to sell, can you no longer afford the mortgage?
Is your daughter under 18?
Can you afford The IVA payments? How large were the debts that went into your IVA?
How much have you paid to the IVA so far?
Jane H says
Hi coming to the end of my IVA, Creditfix are now asking for me to try and release equity which I have applied for myself with current mortgage, but they have said no as I’ve already have a loan against the mortgage. Will I now have to pay IVA for another 12 months is this correct or is 5 years the end what I was told at the beginning.
Sara (Debt Camel) says
How much equity is there in your house – this is current value minus the mortgage minus any secured loan?
Is this house only owned by you or is it joint?
Are the current IVA payments affordable – how large are they?
Your mortgage – is this a fixed rate, if so when does the fix end?
The secured loan – is this a variable rate or fixed?
Jane says
170 equity mortgage is on fixed rate till 2027 loan in on variable rate, IVA £137 as just gone down from 161, joint mortgage with partner, we did enquire about releasing equity but Santander said No, they are sending paperwork to me so I can send to Creditfix as there company was very Rude and said I had to use them.
Sara (Debt Camel) says
ok so your share of the equity is 85k which is significant.
Normally if you cannot release equity, then you have to pay for another year.
So Creditfix said you had to talk to their company who was very rude – was it Select?
Their company will probably try to get you to take a secured loan rather than a remortgage, which you could not afford as it would be at a much higher rate.
what is your current mortgage rate?
Jane says
Mortgage rate is 1.67 fixed till end of term, loan on variable but asked to take out another loan and Santander said no, so looks like I have to do another year, and yes select was company. Thanks for your replies great help, at least I received paper work from Santander this week to forward onto Creditfix to say cannot do either what they want.
Sara (Debt Camel) says
Will you own the house mortgage free in 2027? Can you say how old you are? When does the secured loan end?
Jane says
Loan is tied into mortgage and finishes same time as mortgage but it’s variable rate, and I’m 54
Yes will own half the house at end of 2027
Sara (Debt Camel) says
Is this a shared ownership eg from a housing association? Or do you mean that in 2027 you will own half and your partner will own half?
(Sorry I do stop asking questions at some point…)
Jane says
I will own half with partner other half, and I’m 54
So looks like another year to be added then.
Sara (Debt Camel) says
So you shouldn’t refuse to talk to Select, but you should point out to Select that:
– any release of equity cannot cost more than half of your monthly IVA payments, and half of £137 is less than £70 a month
– there is no chance of a remortgage costing less than that as your current mortgage rate is only 1.67%
– you are concerned that your secured loan is variable rate and that it may increase in the next year which would make a secure loan costing less then £70 a month unaffordable.
Once Select’s fees have been allowed for, they may not be able to come up with a secured loan that will give a better retutn to the IVA than you paying for an additional year.
Let me know what Select say, as you may be able to object to this.
Jane says
Yes I have a call with them on Monday, the issue is with them is they want my partners income which is will not give out as it’s my IVA and nothing to do with him, but I’ve told them this but they don’t seem to listen. But I’m a lot happier now I have Santander paperwork coming also speaking to yourself so thanks very much for your time.
Jane says
Well what can I say about select Robert put the phone down on me, saying they would be able to remortgage as Santander lie, he didn’t like the fact I spoke to them myself and got it in writing that there is no way I’d be able to release equity or even get another loan.
So my next move is to email Creditfix with paperwork and put a complaint in against select as so rude.
Sara (Debt Camel) says
There is no way you can remortgage costing less than £70 a month more. Not going to happen.
But is just about possible Select could come up with a secured loan to release Equity that would cost less than £70 a month. Even that is doubtful. And you have a good reason to be worried that another secured loan may not be affordable if the rate on your current one rises.
Jane says
I’ve emailed Samantha at Creditfix and she is now dealing with my complaint about select, she needs me send her Santander info also has said pay for another year which is far better than select are trying to do. So fingers x it’s sorted but thanks for info from yourself was very helpful indeed.
Phil says
Hello, my wife is in the 5th year of IVA, and has been contacted by Select via Debt Movement in the same way as others. Our situation is that she is paying a huge monthly amount to the IVA company (£1400), and the joint mortgage has £23196 outstanding over 18 months to finish, and the
house is worth about £380k. The IVA payment takes up nearly all of her monthly income, and she is 56 years old, (I am 63 and on the brink of retirement). I am just wondering if they can force her into a secured loan, or what our chances are of a re-mortgage.
Sara (Debt Camel) says
Are her monthly IVA payments affordable?
When do you expect to retire?
How large were her debts going into the IVA?
Phil says
Currently her payments are just about affordable, it leaves me to cover the rest of our cost of living.
I expect to retire in 2-3 years, when the mortgage is cleared, and her pre-IVA debts totalled around 100k
Sara (Debt Camel) says
So any secured loan or the additional costs of a remortgage cannot be more than half her current IVA payments. If you can argue that these are unaffordable and need to be reduced now (have your mortgage payments been increasing?) that will reduce the future cost of any secured loan.
Abd a remortgage or secured loan cannot extend beyond her state retirement age.
What are your pension provisions like?
Phil says
I am already drawing some of my workplace pension which is around £800 p/m, and will have another smaller one when I retire, but may work on until state pension kicks in.
Do you think my wife would be offered some kind of equity release or made to take out a secure loan?
Sara (Debt Camel) says
She shouldn’t if you can show it will be unaffordable when you retire
Noel says
Hi Phil. I’m almost the same with your pre-IVA amount near to £100k. Is £1400/month post-IVA meaning you had a very small write off from the £100k. Is that right?
Sara (Debt Camel) says
IVAs are very individual. There is no set write off amount that creditors are happy with. Asking other people really won’t help you.
Heather says
Hi Sara,
Just to give you an update that the variation was accepted so relieved. Just waiting now for completion certificate.
Thank you so much for all your advice and I would encourage any others out there to push affordability as changes do happen beyond your control.
Phil says
Ok Sara thanks for your help, hopefully if I plead poverty enough they will back down
Sara (Debt Camel) says
You have to be assertive. Show them what your total income will be, yours and your wife’s, when you are retired.
Phil says
Hi Sara, just an update.
We have just spoken with Select and have told them we are going to look at re-mortgaging ourselves, and they have said that they have lenders that will offer a mortgage in any circumstance even if other lenders refuse. I didn’t give them my income details, so they said that there was no point in proceeding further, so if we are refused a mortgage by other lenders can they force us to use one of theirs?
Nathan says
I spoke with them.
They cannot force you.
I spoke with my IP and told them to stand them down. They did so immediately.
Sara (Debt Camel) says
Nathan, your situation was not the same. You had that promise on the term of the IVA and you had a mortgage fix ending soon. I don’t think other people can rely on your good result applying to them.
Sara (Debt Camel) says
Select cannot offer you a mortgage without knowing your income. If you refuse, your IVA firm may decide you are in breach of the IVA.
I am suggesting that you explain to Select how you will be unable to afford a secured loan or remorgage when you retire in a couple of years. And that you give details of what your income will be then.
Phil says
Ok, my wife has sent an email to the IP stating that we will pay the extra 6th year instead of ER, so we will go into details when they contact us, and see if Select contact us again. Surely if we have said we are trying to source our own mortgage or ER deal then we are not in breach of the IVA? Thanks again for your advice.
Sara (Debt Camel) says
Well not if your attempts turn up someone who will let you release equity. But Select specialise in bad credit lenders so they are more likely to be able to find soemone.
Phil says
Final outcome (hopefully), Debt Movement have agreed for my wife to keep paying into the 6th year of her IVA instead of ER.
Thankfully they appear to have seen reason, so that is the outcome we wanted. Thanks for your help and advice Sara, I think standing firm over your affordability is the answer in this situation.
Vanessa says
Hi Sara,
I have a year to go on my IVA. I have 4 companies that have charges on my house when my IVA finishes what happens? Do I then pay them what I was paying for the IVA? Can I ask the companies that have a charge on the house to go into an IVA so it can be finished else I don’t know when it will be finished so there will always be a hold over me and no way out.
Thanks
Vanessa
Sara (Debt Camel) says
So there was a mortgage and 4 charges when the IVA was set up? Have you been paying anything to the charges, are they adding interest?
Michelle says
Hi. Could you advise me please? We are at the end of Year 5 of our IVA. We have now been asked to remortgage to cover the remaining debt and have been put in touch with a financial advisor to sort this. This was part of the original contract. We ARE in a position to have a second charge for the remaining debt, but, with the current interest rate being offered to us it does not feel like a sound financial decision. We would be paying back £95k over 23 years on a £25k second charge. Even if we transfer to a better deal, with the mortgage rates ever changing, I feel we are taking a risk with our future. The whole point of the IVA was to put us in a better position and this second charge will put us in a worse situation in my opinion. Do we have to go through with the second charge or can we offer something else?
Sara (Debt Camel) says
That is horrendous. Who is the loan broker – Select?
I make that about £350 a month in loan repayments.
You are paying £700 or more in IVA payments? Are these payments affordable at the moment?
How old are you? When does your current mortgage end?
Is your mortgage fixed at the moment – if so when does the fix end?
Michelle says
The FA is via The Select Partnership- yes. £310 per month on top of our mortgage (currently pay £620 to IVA as well as our mortgage and that is affordable but not sustainable). We are in our early 40s with 23 years left on our current mortgage. We are fixed with our current mortgage until Jan 2025. Do you think we have a case to contest it and tell them that despite affordability showing we will be able to afford it that it’s not a sound financial decision for us long term?
Sara (Debt Camel) says
What is your current mortgage rate?
How large were the debts that went into your IVA?
How large is your mortgage and what is the house worth at the moment?
Sara (Debt Camel) says
When you say the IVA payment is affordable but not sustainable, have your e lenses increased but the payment hasn’t reduced?
Michelle says
Hi. I feel that life is just generally more expensive- utilities, food, petrol, children getting older. So we have persevered to get to the end of the IVA- We have been fine. We are currently on a 2% deal with our £120k mortgage. House worth £210k. £58k IVA in total, £30k remaining after 5 years.
Sara (Debt Camel) says
so one thing is to go back to your IVA firms and say you were trying to keep up with the IVA payments but they arent sustainable, so you would like them to be reduced. Have a list of everything that has gone up to hand.
That will reduce the maximum amount you can pay for a dsecured loan.
Also go back to Select and say you don’t agree that is affordable, you are talking to the IVA firm about getting the IVA payments reduced and you are very worried about what will happen when your mortgage fix ends, at which point you don’t the proposed loan will be affordable.
Michelle says
Thanks, Sara. I have asked Select to put everything on hold for us to discuss further with the IVA company. I have asked the IVA company to contact me so I can tell them my concerns. I’ll update here when we have a resolution.
Michelle says
Hi. I just wanted to update you on this as we now have an answer to our request.
I went back to the IVA company and told them that I felt the second charge would be putting us in a risky situation with our home. I said to them that we had taken out the IVA to stop the stress we were feeling about money and that we would be back to square one if we had to take this route. The IVA company were amazing, very supportive and understanding. I sought further independent financial advice and brought this info to them also. They arranged a creditors’ meeting (which took 4 months) and we have been told that we do NOT need to take out a second charge and can push a further 12 payments at our current amount to complete the IVA.
If anyone finds themselves in this situation at the end of their IVA, my advice is to fight it if the equity release is not the best financial option for you. Fight it. Speak to the IVA company. Ask them to put an alternative offer to the creditors. It worked for us and can hopefully work for others.
Jay says
Hello Sara. I stumbled upon your website whilst searching in regards to our IVA.
My husband and I both have an IVA, taken out at the same time in July 2019. We owed around £60,000!
We tried consolidating debt, debt and more debt.
We have just had a letter from our IVA company Bennett Jones (they took over from our previous company The Debt Advisor in Jan 2022)
They said that we now need to look to remortgage via The Select Partnership.
My husband pays £152 and mine is £132 per month.
Our house is worth around £250,000. Our mortgage is £96,000 and we still owe 20% to Help to Buy. Our mortgage is fixed until Nov 2026 at 1.54%
Do we have to accept to use Select? Our original paperwork states we have to provide a valuation of our house and 2 remortgage offers. It does not say anything about having to use their company.
Thanks
Sara (Debt Camel) says
Can I ask how affordable the current IVA payments are? Often people just put up with a payments that is reaaly too high in the last years thinking this is only for a few months?
Jay says
They are ok. We have 3 children age 10, 24 and 18 and the repayments are manageable but when our current fixed mortgage rate finishes, I dread to think what it will cost us. Everything has gone up with the cost of living. We really don’t want a secured loan.
The Help to Buy part also concerns me, can we take out further loans? I didn’t think we were able to?
Sara (Debt Camel) says
So you can tell your IVA company that you don’t think any secured loan would be sustainable after your current mortgage fix ends, so you don’t think you should be offered one.
You can also point out that as you have a Help To Buy mortgage, you would need to get permission from the Homes England Mortgage Administrator (currently a firms called Lenvi) to take out a secured loan and these are not normally agreed if they may put you in an unsustainable position eg when the mortgage fix ends and you have to start making repayments on the government’s portion.
Suggest that in the cucumstances you should just have to make an another year of IVA payments instead of releasing equity.
Noel says
Hi,
I decided to go into IVA and I want to give more context: My fixed rate will be finishing by Feb 2024 and I need to start paying the Help To Buy interest. But I plan to start my IVA after I secured a new fix or product transfer if possible. The house is mortgaged under my wife and me paying £1k/month with 1.54% fixed rate currently.
Before I start the IVA process I had a few questions that hopefully I can get the answer(s).
1. I’m confused people with mortgage same like me are being contacted by Select before the end of their IVA normally 5 years and being asked to remortgage. Is this because the IVA was agreed before the new IVA process?
2. What’s the reason the IVA is being transferred to the Select even if the IVA payments are up to date?
3. I understand the new IVA process must outline that ER will not be possible so the extra year shall be followed . Is my understanding correct?
4. After a 3-4 years and I managed to secure the funds via asking relatives to lend money to pay off the IVA, will I only pay the remaining IVA amount calculated for 6 years or there might be a push to get more money?
5. Is there a possibility the IVA will be extended up to 7 years?
6. Assuming five years from now, my wife will not participate in the IVA and Select or a different organization contacted us for ER, what’s the normal course of actions and reasons to avoid it and just pushed for the extra 12 payments. Help To Buy is still being paid and I might be in Variable Rate.
Sara (Debt Camel) says
1. I’m confused people with mortgage same like me are being contacted by Select before the end of their IVA normally 5 years and being asked to remortgage. Is this because the IVA was agreed before the new IVA process?
The new IVA process doesn’t seem to be making much difference. I hear of VERY few IVAs being set up which are limited to 6 years with no requirement to release equity.
2. What’s the reason the IVA is being transferred to the Select even if the IVA payments are up to date?
They are NOT being transferred. The IVA firm is referring people to Select to get an offer for a secured loan in order to release equity in the IVA
3. I understand the new IVA process must outline that ER will not be possible so the extra year shall be followed . Is my understanding correct?
NO. The limit to 6 years is only if there is no prospect at the moment of specialist brokers (ie Select) being able to get a secured loan. Doesn’t seem to be happening much. Good luck trying to get an IVA firm to agree to this…
4. After a 3-4 years and I managed to secure the funds via asking relatives to lend money to pay off the IVA, will I only pay the remaining IVA amount calculated for 6 years or there might be a push to get more money?
If you have got the IVA limited to 6 years with no equity release clause, then they should not push for more because of that. BUT they will review your income etc and see if you should be paying more at that point. Bottom line – you should NOT go into an IVA expecting that this as a being a likely possibility to end the IVA. And even if it does, your credit record will not improve for the remainder of the 6 years. eh if you want to move house you will still have a MAJOR problem getting a mortgage at an OK rate.
5. Is there a possibility the IVA will be extended up to 7 years?
Some IVAs are still going after more than 7 years if there have had to be payments breaks, or you end up owing more and get the term extended to cope with this.
6. Assuming five years from now, my wife will not participate in the IVA and Select or a different organization contacted us for ER, what’s the normal course of actions and reasons to avoid it and just pushed for the extra 12 payments. Help To Buy is still being paid and I might be in Variable Rate.
The simple option is to go to StepChange at the start, not another firm.
So far as I know they have NEVER referred anyone to a bad credit broker like Select.
Apart from that, you can challenge any secured loan if it is not affordable. At the moment with mortgage rates set to rise that is often pretty easy. In 5 years time if mortgages rates are lower, you may have much more problems.
Sara (Debt Camel) says
But your immediate problem with your mortgage fix ending. Who is your current lender?
How large are your unsecured debts – are you currently managing the repayments and it is just new mortgage fix that is the issue?
Do you have a car on finance – if you do is this HP (so you own the car at the end) or PCP (so there is a large balloon payment)?
Noel says
Current lender is Barclay’s still in DMP so might try for product transfer or new fix with them then apply for IVA the moment the we got the approval
Payment is still manageable under DMP. No idea when I start the IVA. Car is paid and transfer to my wife’s name before the starting the DMP.
1. What is the reason the IVA is being referred to company like Select or any other in the first place?
2. I just want to settle the IVA early and fully aware about my credit file will not be good for 6 years. I just want to know if I offer the F&F for the remaining outstanding amount then it should be accepted even IF there is a clause of ER. Is this possible?
3. Does it mean as long as I’m paying the IVA without any payment break or missed payment then I can opt not to entertain companies like Select and just pursue to complete the IVA. What’s the reason that this approach might cause a breach in my IVA?
4. Is the IVA always has a clause for ER or this is something that can be discussed prior and negotiate with extra 12 months? What can I say to IP in order to just go for the 12 months?
Sara (Debt Camel) says
how large are the debts in the DMP?
how long has the DMP been running?
Have you looked at other ways to spped this up apart from an IVA? See https://debtcamel.co.uk/7-ways-to-speed-up-a-dmp-so-it-finishes-sooner/
1. What is the reason the IVA is being referred to company like Select or any other in the first place?
The IVA isnt being referred. The person in the IVA is being referred to get a quote for a secured loan to release equity
2. I just want to settle the IVA early and fully aware about my credit file will not be good for 6 years. I just want to know if I offer the F&F for the remaining outstanding amount then it should be accepted even IF there is a clause of ER. Is this possible?
Anything is possible. But it is normal if there is an equity release clause in yoru IVA for the settlement to have to cover that extra year.
Sometimes good settlement offers get rejected. There is no such concept as “should” be accepted. I repeat, don’t go into an IVA expecting that this is the way it will end.
An alternative, that doesn’t get an insolvency marker on your credit file, doesn’t have the intrusiveness of an IVA and avoids the IVA firms fees is to make settlement offers to creditors in a DMP.
3. Does it mean as long as I’m paying the IVA without any payment break or missed payment then I can opt not to entertain companies like Select and just pursue to complete the IVA. What’s the reason that this approach might cause a breach in my IVA?
No – well you can try that but you may have a fight on your hands. The IVA firm argues that by refusing to talk to Select (or any similar firm) you are not co-operating withe your IVA firm and are in breach of the IVA.
If you don’t want to have this argument, my suggestion is to go to StepChange at the start.
4. Is the IVA always has a clause for ER or this is something that can be discussed prior and negotiate with extra 12 months? What can I say to IP in order to just go for the 12 months?
Yes there is almost always a clause for ER.
Your wife could make it clear at the start that she will not agree to any equity release and you could refuse to agree to an IVA with this clause in it. Then its up to your IVA firm whether to proceed with the IVA or not. As you hav en’t said how large your debts are or what you are currently paying to the DMP there isn’t really much I can say about that.
Noel says
I was forced into this situation having being scammed with the amount of £95k. I recently recovered from my suicide attempt(s) but still under medications and ongoing therapies
I started to deal with my debt using DMP paying £275/month approximate but it will take me more than 23 years to finish so I’m looking for IVA.
My new question is if the IVA has been agreed is the equity release will be for the payment of the Iva or the total outstanding debts which include the Iva?
Sara (Debt Camel) says
So when your mortgage goes up, and you have to start paying the HTB part, how much will you be able to afford to pay a month to the IVA?
And do you have mainly one large debt? Or lots of smaller ones?
Equity release in an IVA is for a maximum of the total debts plus the IVA fees less the payments already made.
How much equity is there in your house at the moment? You only own half.
Noel says
I still don’t know how much is the IVA because I haven’t started it yet.
I had a combination of large and small debts.
Excluding the HTB and the outstanding mortgage maybe my share of the half of the equity will be £40k.
I’m paying 1.54 atm but expecting to increase it by 5%+ even by new fix/product transfer.
New questions
1. Using the £275/month as an example. Is my computation correct as shown. @5 years is £16.5k and @6 years is 19.8k?
2. From your experience how is the indicative write offs that an IVA will offer?
3. What’s the success rate of an ER because remortgaging might not be possible due to my IVA so I will be higher rates
4. Can HTB be one of the deterrent reasons for EQ? What else can you suggest
5. I still don’t understand why the IVA might fail if my wife will not participate like providing her income?
Sara (Debt Camel) says
Which firm are you talking to about an IVA?
How much will your mortgage go up to if the rate your get is say 5.5%. Do the arithmetic now.
It looks highly likely to me that you mortgage will be going up by more than £500 a month. Plus some for the HTB part. So you will no longer be able to afford to pay £275 a month to the DMP or IVA… Not remotely close. It isn’t clear to me that this IVA will be approved bu your creditors.
1. Using the £275/month as an example. Is my computation correct as shown. @5 years is £16.5k and @6 years is 19.8k?
Not really – that isn’t how an IVA works. You don’t fix an amount at the start that stays the same for 5 or 6 years. You will be expected to pay more if your income goes up.
2. From your experience how is the indicative write offs that an IVA will offer?
That depends on your situation and who the creditors are.
3. What’s the success rate of an ER because remortgaging might not be possible due to my IVA so I will be higher rates
oh you won’t be able to remortgage. Highly unlikely. But Select specialise in finding bad credit lenders to give a very expensive secured loan to release equity. That is your problem, not a remortgage.
4. Can HTB be one of the deterrent reasons for EQ? What else can you suggest
yes probably at the moment. But if there are falling mortgage rates and rising house prices in 5 years time who knows?
5. I still don’t understand why the IVA might fail if my wife will not participate like providing her income?
The simple thing is for her to state at the start that she will not be prepared to release equity and insist on that being written into the IVA at the begining. Whether the IVA firm will be happy with that, I have no idea.
Noel says
1. I’m looking to use Stepchange for the IVA. They are also the one who established my DMP.
2. Due to the increase in the rate and my current DMP payment so will I need to go for bankruptcy? I need to get an advise to avoid this situation otherwise it might trigger my mental issue.
3. Are there any other specialize lender aside from select?
4. What can you advise if 5 years remortgage will be before the 5 years when select approached me
Sara (Debt Camel) says
StepChange – they are the best firm to use in this situation. I have never heard of them referring an IVA client to Select or any similar bad credit broker.
I suggest you park worrying about equity release and instead look at the viability of an IVA. And what alternatives you have.
How much will your mortgage go up to? Here is Barclays general page for new mortgage fixes https://www.barclays.co.uk/content/dam/documents/personal/mortgages/emcrewardcustomerratesheet.pdf. I don’t know if HTB makes a difference to this. Find out your options now – this doesn’t commit you, but it is going to clarify a lot.
Bankruptcy is VERY. VERY unlikely to be a good option for you as the house would need to be sold (not immediately but within 3 years) and you would lose all your equity. Also having transferred your car into your wife’s name would be a problem in bankruptcy if it has happened in the last few years. Almost certainly better to sell the house now and use your equity to make settlement offers to your creditors than choose bankruptcy.
So what are your other options? How long has your DMP been running? Could you list the debts in the DMP – original lender, very rough balance (nearest £500 is fine), has the debt been sold to a debt collector.
Noel says
Like I said I just recovered from my suicidal attempts so it took some time to heal my body and address my mental issue so the DMP is just less than a year meaning most are still with the original lenders.
What’s the benefit of my unsecured loan being sold.
I believe the viability will depend on my wife and me. I assumed any cost of living l like mortgage should be divided into 2 even if she don’t provide her payslips. If that’s the case then the assumed £500 increase will only be £250. Is that the case?
We are trying to avoid bankruptcy because we need to hold on the house for my 4 minor kids. The first step is get a new 5 years new fix with Barclays then offer F&F before the new fix ends with the amount proposed by the IP. BTW the F&F might happen before the 54 months of the IVA wherein a specialist lender will attempt for us to avail the ER
Noel says
Here are the creditors that I can recall
1. Zopa: £35k
2. First Direct: £9.7
3. MBNA: £19.7
4. Curry: £7k
5. John Lewis: £3k
6. Argos: £1k
7. Couldn’t remember: £10k
8. Capital One: £1.5k
9. Natwest: £8.1k
I hired a specialist solicitor to recover my scam money so I’m hoping to secure at least half of them but it will take 8-14 months.
The recovered money will be my F&F which is the reason for the delay in IVA because I don’t want it to be a windfall so I’m still using DMP.
When you say my wife needs to show her income does it mean provide payslips which might be fine but she still not keen on equity release
My kids are 6,12, 6months and 2 years old
Barclays new fix rate is 5.2% and start paying help to buy using the max because it increase every year will be not more than £180+/month for the next 5 years
Sara (Debt Camel) says
If you get money back through this specialist solicitor, that will be a windfall which is would have to be paid in full into your IVA. This will not reduce your IVA payments or end the IVA sooner. It is not available to use to make a settlement offer to the IVA.
So you cannot start the IVA until that money has been received. And at that point you can use it to make settlement offers that may mean there is no need for an IVA at all.
So your DMP has to continue. Except that you need to reduce the payments when your new fix kicks in to an affordable amount. Which may only be a token £1 a month. That isn’t bad, it means your creditors are more likely to sell the debts or accept a settlement offer.
In the meanwhile, I suggest you make affordability complaints against all creditors in your DMP. Some of them have lent you way too much money…
Read the relevant articles here: https://debtcamel.co.uk/tag/refunds/. Add to the template letters that you were scammed out of a lot of money in [some details] and you subsequently tried to kill yourself. Attach some evidence. Ask for your case to be handled by their vulnerable customer team.
And make a time line – what did you borrow and when.
Many of these complaints may need to go to the Ombudsman, don’t be fobbed off by rejections.
Noel says
The amount I borrowed was in short duration to fund the scam meaning in a span of 1.5months
I’m also afraid about being a accused of fraud because I used my former company’s details and salary just to finance the scam even I was made redundant because I was desperate to get a job so the scam was an offer of employment.
Still few more questions
1. What is the affordability complaints? How I can I benefit from it? How do I raise it?
2. What’s the requirement for a token payment? How I become eligible?
3. Are there organizations that can help me with the financial ombudsman preferably free?
4. Please explain to me why I don’t need an IVA if I’m just getting half of it that’s the ideal but it might be less but not below than 15%
Sara (Debt Camel) says
Borrowing it all in short duration may be a problem for affordability complaints. But the later debts should have been able to see the earlier ones on your credit record. That is why I suggested a time line.
Potential fraud is also a complication. You need to think what did this lender know, what did I tell them and did they make sufficient checks.
Token payments Are acceptable if you can’t afford any more. Eg if your mortgage has risen a large amount. See https://debtcamel.co.uk/token-payment-debt/
Claims companies are no better at taking cases to the Ombudsman than you are
You must not start an IVA if you think you may receive a large payment back from the scam. Because that payment will not help end your IVA any sooner.
If it is outside an IVA you can use it to make settlement offers. Say your debts are 75k and you get 25k back. At that point you have been making token payments and shown the creditors an income and expenditure statement proving you have no spare money each month. So you offer them all 33%. Some of them would rather take that than wait around for a very long time for your finances to improve.
There is even the possibility of making this offer in the form of a lump sum IVA payment…
But all that is is in the future and little point in speculating about it now. For now the important things are – get your mortgage fix sorted. StepChange should confirm this – nothing can be done about an IVA or loosing at other options u til you have your mortgage fix sorted.
Noel says
Hi
1. Can I convert my DMP to Token Payment or wait until the new fix rate came into fruition?
2. Can Stepchange help with the conversion?
3. Are you telling me the money I get within 1.5months might not be able to get affordability claims? Please tell me why?
4. During the Token or DMP like you said some creditors (assuming already been sold to collection agencies) might agree with the settlement and some might not. Question 1. for those who agree what’s the range to offer the settlement Question 2. for those who don’t want to settle will I include them into an IVA or just continue paying with the DMP or Token?
Sara (Debt Camel) says
1. Are your current DMP payments affordable? The only reason to make token payments is if you can’t afford any more. Which may well be the case after your mortgage goes up, but is it now?
2. If you can no longer make DMP payments when you mortgage goes up, StepChange may be prepared to run token payments for some months. After that it’s pretty easy to run your self
3. The problem with having borrowed a lot of money very fast is that many of the creditors may not have seen any recent borrowing when they looked at your credit record. So may have had no reason to think the borrowing was unaffordable, so yo7 won’t win affordability complaints. Getting a timeline of what you borrowed And when can help with this.
4. You don’t ask if a creditor will accept an offer, you make the offer. And in your case you offer everything you can. It’s really impossible to work through all the permutations now. It depends what your situation is after the now mortgage fix, how much money you get back, when you get the money back, and how many creditors accept.
I understand you want a clear path forward. But you are Nowhere near that now. You just Have to take this step by step.
Come back and chat about your options when the mortgage has gone up. And then later if you get a settlement.
Noel says
Hi
1. DMP is still affordable and will not be when the new fix start next year
2. What do you mean run the token payment by myself?
3. Do you think applying for affordability will be successful especially for new unsecured loans that I get in less than 2 months? I had been paying diligently the minimum amount for loans prior to being scam and a couple of them extend new loans during the scam. Can I still claim affordability
4. After the defaults had been recorded and they were taken out because they were more than 6 years old, do I need to pay the creditors because I still have outstanding loans with them?
5. What is arranged payments and payment in 6 months? Why they are difficult and take long time to drop off in the credit report? What can I do to make them shorter?
Sara (Debt Camel) says
1. Then you have no reason to make token payments at the moment.
2. Read that link I gave about token payments
3. No idea. Draw up a timeline of what you borrowed when and post about it on this other thread https://debtcamel.co.uk/refunds-large-high-cost-loans/
4. Read https://debtcamel.co.uk/debt-not-on-my-credit-file/
5. Read https://debtcamel.co.uk/debt-default-date/
Noel says
Hi,
How do you settle the Arranged to Pay early?
Sara (Debt Camel) says
The same way as you try to settle any other debt – make an offer in full and final settlement, see https://debtcamel.co.uk/debt-options/less-common/full-final/
You are asking questions about a wide range of things which have nothing to do with equity release in an IVA. I will be moving some of them to more relevant pages and I suggest you start asking any further questions on those pages:
settlement offers – https://debtcamel.co.uk/debt-options/less-common/full-final/
payment arrangements – https://debtcamel.co.uk/arrangement-to-pay/
the DMP or IVA decision – https://debtcamel.co.uk/hard-choices/iva-dmp/
credit records in a DMP – https://debtcamel.co.uk/dmp-credit-rating/
speeding up a DMP – https://debtcamel.co.uk/7-ways-to-speed-up-a-dmp-so-it-finishes-sooner/
token payments – https://debtcamel.co.uk/token-payment-debt/
Graeme says
Hi can you please advise me on equity and iva, I’ve been told that there is too much equity in my property to apply for an iva, the current value is around £210000 top quote, my mortgage is a joint account but only I will be applying for an iva, the remaining balance amount is £105000 ,which includes a £21000 secured loan, any assistance would be appreciated.
Sara (Debt Camel) says
how large are your debts? How much would you be paying to an IVA per month, was that discussed or was it just ruled out because of the equity?
is most of your debt recent consumer credit debt? cards, loans etc?
do any of the companies have a large amount of the debt? have you defaulted on any of it already?
Graeme says
Hi total debt is £45000, the monthly iva payment was going to be £220 , this was until the valuation came in at £210000 ,then an iva wasn’t an option, a dmp was suggested for 18 years at £220, but I was told creditors would want be to go bankrupt?
Sainsbury’s credit card £10000 and 2 MBNA credit cards combined total £15000
haven’t defaulted or missed any payments as of yet, making minimum payment only
Sara (Debt Camel) says
Which IVA firm told you there would be problems?
There is a potential way around this, but it isn’t guaranteed to work and it would probably take several months. Are you in difficulty making the payments at the moment? Before setting off on this it’s worth looking at whether an IVA is really a good idea at all… sorry a lot of questions
Did they say how large your IVA payments would be each month?
What is your current mortgage rate, who is the lender and when does the mortgage fix end?
When does the secured loan end and is that a variable or fixed rate?
Do you have a car on finance, when does that end and will you own the car at that point?
The MBNA accounts – how long ago was the second card given? At that point were you only making mininmum payments to the first MBNA card?
Did Sainsburys increase your limit while you were only making minimum payments?
do you have any loans in the mix that you feel you should never have been given?
Graeme says
Hi,the company was stepchange, they said the monthly payment would of been £216, current mortgage rate is 0.95% lifetime tracker with
barclays, secured loan and mortgage end in around 15 years,no cars on finance, the 2nd MBNA card I estimate was around 2-3 years ago, I’ve mostly always paid the minimum monthly amount, and I don’t think sainsbury’s have ever increased the limit, the loans I have were online and were given quite easily.
Sara (Debt Camel) says
oh nice mortgage!
Are the minimum payments on the debts manageable at the moment?
The loans – who are the lenders and what sort of interest rates?
Graeme says
Thanks, minimum monthly payments are manageable using the overdraft, then when my wages go in the account I’m no longer in the overdraft till I start making the minimum payments and direct debits,the loans are with novanu I think around 6% Apr and hitachi again I think about 7% Apr.
Sara (Debt Camel) says
When does the first loan end?
how large are the loans payments? And the minimum payments on the cards in total?
How many days of the month are you in your overdraft? How long has this been going on for?
My proposal for getting an IVA approved isnt going to work if you have ways of managing except for insolvency…
(PS please do not leave duplicate comments!)
Graeme says
One of the loans ends 2025, the other 2026, my was the iva not going ahead due to equity??, but my worries are I’m only managing minimum payments and no more, surely companies won’t keep excepting them forever?. Really appreciate your help and support, I really need a solution
The loan payments are £126,the other £150, the credit card payments are around £1000 pm minimum monthly payments
Sara (Debt Camel) says
One option for you now is to ask the credit cards for a payment arrangement to pay less and have the interest frozen. When the first loan ends, you can then increase the amounts going to the credit cards.
You can also look at making affordability complaints against any credit card that gave you an unmanageably high limit at the start (possibly ok as a balance transfer but not when interest started to be charged) or which increased your limit too high when you were only making minimum payments.
Graeme says
is an iva out the question because of the equity? Would the 18 year dmp not work?
Sara (Debt Camel) says
IVAs have to be approved by your creditors voting on them – the voting for most creditors is done by a firm they emply as their voting agent. Stepchange know the voting agent’s habits well enough to be ablke to predict when one one is likely to vote agiants an IVA eg because there is too much equity.
One possible way round this is for you to go directly to the larger creditors and set out why you need an IVA and why you have no sensible alternative. I want to stress that I am not aware of anyone who has scucceeded in doing this, but because of the “Consumer Duty” that was intruduced last July, there is a case to be made that it may be possible (see https://debtcamel.co.uk/fca-consumer-duty/ for more abiout the Consumer Duty.)
However in your sitution you have not yet actually defaulted on any of the debts. This doesnt seem to me to be a good place to start making a complicated argument as to why a lender should change its normal IVA voting procedures in your case. You could waste the best part of a year asking a lender to agree to an IVA, then saying No, making a formal complaint, rejected, going to the Finacial Ombudsman with a novel argument that is simply not that strong…
Instead I think you should set off with a long term DMP. Bankruptcy or selling the house seem foolish options given your extremely cheap mortgage. So you are left with a DMP or payments arrangements. If the loans were ending soon, you could try payments arrangements for the cards, repay the loans in full and then up the payments to the cards – but the loans don’t end soo so a DMP for all your debts, including the overdraft sounds like a better idea.
Very few creditors will reject a StepChange DMP or refuse to stop adding new interest at the start. I suggest you should set off on a DMP. And at the same time start looking at affordability complaints against all of the debts in the DMP – see https://debtcamel.co.uk/tag/refunds/ for more about these complaints and templates to use. Any you win will result in lower balances and so the DMP will end sooner.
After a year you may want to review the DMP – how is it going? could you pay more to it? have the balances dropped? If it still looks very prolonged, at that point an IVA could be reconsidered.
Graeme says
Thank you so much for your advice I really appreciate your time and assistance, can’t thank you enough, I will look into the DMP route with stepchange, this might sound a cheeky question but is it possible to use the credit cards before entering into a DMP?, again a huge thanks 😊
Sara (Debt Camel) says
really you shouldn’t. Every time you increase the balance, you make the amount you have to clear jigher the time it takes longer.
To be clear, if the value of your house goes up, it will become even harder to get an IVA. You should not assume that you will be able to just write off more in an IVA. Time to stop using the cards and set about clearing them.
Graeme says
Hopefully I’ll get sorted with stepchange, just to stop me stressing, if I go onto a DMP, there’s no way creditors can force me to sell my house is there?, I have 4 children, 3 that still depend on me I the thought of going homeless or bankrupt is terrifying me,
Sara (Debt Camel) says
if I go onto a DMP, there’s no way creditors can force me to sell my house is there?,
So this is literally worst case, but you asked…
A creditor can in theory go to court for a CCJ. This only normally happens for business loans, guarantor loans or some bad credit lenders, not credit cards.
If they get a CCJ, then they can in theory get a charging order. These are much much rarer. See the statistics in this post https://debtcamel.co.uk/charging-order-sale/ – they are old stats but they haven’t changed much.
Then if you do not make the CCJ payments set by the court (which you can get varied so they are affordable) then a creditor can get an order for Sale. These are incredibly rare as the above link says.
n mathew says
Hi,
me and my husband have a joint mortgage and our IVA was for 6 year and this is 5th year. Select partnership contacted us for equity release, early re-payment and re-mortgage etc., We never missed any IVA contribution and can at end of the term. Do we need to agree with equity release? Can we refuse them to go for ER and happy to continue with current payment at the end. Please advise
Sara (Debt Camel) says
when does your current mortgage fix end?
is your mortgage a standard mortgage or a help to buy or shared ownership?
how affordable are the current IVA payments?
what are the numbers for your situation how much is the house worth? how large is your mortgage? how large are your IVA payments?
Lou says
I am 4.5 years into my IVA and I have been contacted by select regarding equity release.
I had one appointment last week to go through my income and expenditure and I had no affordability, I am going to struggle with the increase in my bills that take affect this month . She recognised that I couldn’t manage and asked how I was managing so I explained I wasn’t and was having to borrow!!
She then said she would complete a credit search and mentioned for fraud (I’ve no idea what she meant). She mentioned about remortgaging and buying my ex partner out, I thought that any remortgage could not take me past my mortgage term or cost more than half of my Iva payment now?
She had still referred me for a further appointment to discuss remortgage options next week
Can you advise me what to expect please
Sara (Debt Camel) says
what is your current IVA payment? when does your current mortgage fix end?
Lou says
£126
Dec 2027
Sara (Debt Camel) says
what is your current mortgage rate?
and the £126 monthly payments are not affordable at the moment because of bill increases?
Lou says
Interest rate 5.10
Not since the increase I’ve managed to reduce my energy bill by £100 to accommodate the increase of some but I’m still awaiting on the council tax bill to see what that has increased by
Sara (Debt Camel) says
then you should go back to your IVA firm and say the current payments are not affordable and you would like your IVA to complete at the end of the 5 years as you will not be able to afford an extra year of IVA payments or any equity release.
Lou says
I already told them This before they sent me to select but said I had to go anyway
Then when I had the first call from select it was obvious I had no spare income and with the new increases I was over my budget but still Sent me to the mortgage advisor which my appointment is Tuesday
Will see what Tuesday brings then go back to my Iva firm
Nick H says
Hello, I am with Creditfix and into my final year so they have asked Select to contact me about equity release. I currently pay £115 a month which is affordable, however our fixed term on our mortgage ends next year currently at 1.84% so expected to go up considerably and when partner goes back to work after Mat leave she will be dropping a day. Zoopla values house at £300K there is 160K left on mortgage jointly owned with wife who isn’t in an IVA have first call with select on Wednesday and just worried about it all, any advice please? Should I contact the bank I have my mortgage with? Thanks
Sara (Debt Camel) says
This doesnt sound like it should be a problem for you for two reasons:
– equity release can only be for half the amount of your current monthly payment, whoich is too low an amount for equity release to be practical
– you can point out to Select you will have difficulty making the current mortgage payments at that point and any secured loan will be unaffordable
You should also tell Creditfix if they want to extend your payments by another year that this will be impossible when your mortgage increases.
Syed says
I have a draft proposal of an IVA with StepChange at £305. I have joint ownership of the house with my brother and my mother. They have sent a letter explaining equity release and what will happen to the home and asked the remaining two co-owners to sign the document. In line with the IVA protocol 2021 and current lending criteria detailed, I’m likely to be able to re-mortgage. What does this mean?
My question is that should the co-owners sign the paperwork stating these term and conditions and if so come the 54 month can they refuse to sign a secure loan offer from their specialist broker on the house? also what are the chances of my IVA going to 72 months and not having to hassle paying through remortgage the house or secure loan against the property? Also please explain 2021 protocol where it states that I am likely to be accepted for a remortgage? Even-though I am not the sole owner of the property and I have 1/3 of the share.
Sara (Debt Camel) says
Can you tell me about the house and why there is joint ownership – who actually lives in the house?
how large is the mortgage and when does the current fix end?
How large are your debts that would go into the IVA?
Syed says
The house was council’s and we live with parents so bought outright and the deed poll was on joint names. We still live in the house.
No mortgage on the house as bought outright on 3 equal shares. My debts are around 64k and consists of loans, credit cards, overdrafts and catalogues such as Very and Littlewoods. All of them are unsecured debt.
Sara (Debt Camel) says
It’s up to your co-owners if they want to sign the document – they may want to consider taking their own legal advice on this.
But they CANNOT plan to sign now and refuse to agree to a mortgage in the last year of your IVA. You should not suggest to them that this is possible and that you will then just have to pay for another year. It is very likely that your creditors will only accept your IVA because of the remortgage at the end and if that doesn’t happen you will be in breach of the IVA and it may well fail leaving you back with the debts.
You appear to have acquired a lot of debt for someone who doesn’t have any rent/mortgage to pay. Was any of this incurred to get you enough money to pay for your share of the house?
Nicola Thompson says
Hi, we have an Iva and the 5 year payments ended at the end of 2022, they have now passed our details on to The Select Partnership to see about releasing equity. We are now really worried because our mortgage is paid up in 5 years and because we have no pension our plan was to then put the payments away for retirement however I have read that they can make you remortgage up until retirement age.
Also when we took the IVA out we was told this was not likely to happen and nor was the extra year of payments so I feel we were missold it and should have gone down the bankruptcy route instead.
Iva debt £87,000
Payments made £30,000
Payments were reduced in the last year to £420.
House valued £150,00”
Outstanding mortgage £24,000
You can see we have the equity to repay the debt but can’t afford extra payments and do not want to have to remortgage until retirement age.
Have you any advice?
Sara (Debt Camel) says
Can you say how old you are?
Was the 420 affordable? Have your expenses increased What is your current mortgage rate and if this is fixed, when does the fix end?
Nicola says
Hi I am 43 and my husband is 45.
We could probably afford the £420 it originally £780 but we couldn’t afford that after 2 years of the iva being active.
Our current rate is 1.5% but will end soon and is moving to a 3 year fixed at 5.4%.
Sara (Debt Camel) says
“Probably” but have your costs gone up since? The additional cost of aremortgage or secured loan cannot cost more than 50% of your Iva payments. If you can Get another £50 off the IVA now, that is £25 off the ongoing ghost of a new mortgage.
“End soon” how soon?
How much will that mortgage rate hike increase your mortgage payment?
Tracey says
Hello,
I am looking for some advice in regard to equity release. My IVA was for 5 years commenced 2020. As I am a home owner I am aware of the remortgage/equity release clause/6th year extension which would be April 2025.
My current mortgage has approx 62k remaining fixed term rate until 2027. I have another secured joint loan against the property 26k remaining approx which partner currently pays.
Monthly payment for both are approx 900£.
Looking online, my home is worth approximately 105k
What are my options here? I am managing my contributions currently never missed any always on-time, these are due to increase in October from 150 to 403.
I am concerned any remortgage would be unaffordable
Sara (Debt Camel) says
Why are your contributions going up so much in October?
Has your mortgage gone up during the IVA so far?
Jenny Fisher says
Hi,
I am after some advice with my IVA, the 5 years will be up in March 2025 with Creditfix. I have been paying £259 a month. Not missed any payments or had any breaks within the 5 years. The IVA is joint and unfortunately myself and my husband have seperated and we will have to sell the property. What is the best advise to do here. Creditfix are not forthcoming in giving any settlement figures they are asking for a “draft completion statement” from my solicitor. I haven’t appointed a solicitor yet as they have advised me not to do anything until i receive a figure from them that everyone is agreed on. I have been reading alot of post’s in similar situations and there is equity in the property as there is only 4 years left on the mortgage. I have been contacted by the company on behalf of Credtifix to look at releasing the equity. To which i explained my situation and they said a remortage would not be an option and would close the file and inform Creditifix. But this company changes the goal posts everytime you speak or email. You never ever receive the same information so my head is blown with what is the right way to go about this?
Sara (Debt Camel) says
How large were your debts that went into the IVA?
is the £259 now no longer affordable?
Nicola says
Hello,
I am looking for some advice please regarding the ER clause. I am in my 5th year of IVA with Creditfix. My payment is £420 a month and I have been referred to the Select partnership to remortgage. My partner has a separate IVA £236 a month and is just going into her 5th year but with IVA.org. Our house is worth approx 200k and we have a joint mortgage with 112k outstanding. The current mortgage rate ends in May 2025.
Select partnership has found us a secured loan for 36k to pay off both Iva’s 26k for mine and 10k for my partners. The cost of this loan is £374 a month, which is lower than our IVA payments. However, I am concerned that once our current mortgage ends the repayment is definitely going to go up by at least £200 per month. Meaning which we will be no better off than with the Iva payments and with this debt for another 21 years, means we will be paying nearly three times our original debt. Please can you advise me on what my best course of action as in the long term I feel a remortgage will be unaffordable and we will be in a worse position than when we started as we now have a bad credit file. Many Thanks
Sara (Debt Camel) says
When does your IVA end?
How long is this proposed secured loan and what interest rate?
What is your current mortgage rate?
Nicola says
Hi
My IVA ends in May 2025. My partners ends Sept 2025. Our current mortgage rate is 1.8 %and ends in May 2025. It will probably go up to 4.6 % if Barclays allow us to remortgage as an existing customer without credit checks. This will increase the payment by around £200. The secured loan that Select have found is at 11% and for over 21 years. Our current mortgage has 16 years left.
Sara (Debt Camel) says
How old are both of you?
How affordable are the current IVA payments?
Nicola says
I am 46 and partner is 43 which is why the secured loan can be up to 21 years. We just manage current iva but only because my partner works night. However, night shifts are not something that he can do long term and the shift premium is not guaranteed. One of the reasons we went into an iVA is that night shifts were cancelled for two years. Also we just about manage payments but don’t have much spare cash to fix cars or the house when things go wrong. When taking out the iva we were told the remortgage wouldn’t go through so we could just pay the extra year. If we had known a secured loan was what we had to take out over 21 years we would have looked at alternatives to pay our debt.
Sara (Debt Camel) says
I agree with you that this secured loan will be unaffordable. Everyone at the end of an IVA has elderly cards and a backlog of things in the house that will soon need replacing. And it is not reasonable to expect him to work nigh shifts until he retires.
One of the ‘protections’ that is built into equity release under standard IVA terms is that a secured loan cannot cost more than half of your current IVA payments – the one being proposed here at 374 is more than half of your combined IVA payments.
I also think the increased mortgage rate should be taken into account as that would reduce both your IVA payments if you were making a 6th year of payment in instead of releasing equity.
I suggest you make these points to Select and to Creditfix. And tell Select that they are not acting in your best interest and so are in breach of the consumer duty by proposing that you take an secured loan that is very likely to be unaffordable.
let me know what happens.
Berti says
Hi Nicola, I was in the same boat and I felt the select partnership were proposing an unfair deal. I raised this with the insolvency practiser Samantha.Warburton@creditfix.co.uk and she was very understanding and agreed to extend for a further year. To my surprise she was very supportive. I recommend doing the same for anyone in same position. By the way this advice was given to me by our magnificent Sara.
Nicola says
Thought I’d let you know that we followed all of your suggestions and contacted Sam Warburton. Creditfix came back and offered the extra 12 months. We now need to try and get two rejection letters from mortgage providers. Thanks again for your help.
Sara (Debt Camel) says
did she agree that your payment could be reduced for the 6th year when your mortgage goes up?
Nicola says
Many thanks I will do.
Nicola says
No they haven’t mentioned anything about the payment being reduced. Do I wait until my mortgage increases or ask for a reduction now?
Sara (Debt Camel) says
Go back to them and point out that you will need a reduction in the 6th year as your mortgage is going up but you don’t know when
sahar khan says
Hi,
I am after some advice with my IVA, the 5 years will be up in March 2025 with Creditfix. I have been paying £135 a month. Not missed any payments or had any breaks within the 5 years. IVA is just on my own name. Now received letters from Select and Creditfix that they are looking for equity release. All mortgages home & BTL are on my husband name. I have no job or any other income since Jan 2021 but keeping my payments up-to date with support from my husband and father in law.
my husband will not agree to re-mortgage to pay my IVA debts and I do not have any income to afford new loan payments etc. what are the options available in my case?
Sara (Debt Camel) says
All mortgages home & BTL are on my husband name.
So your house isnt in joint names?
sahar khan says
House is also only husband`s name. No joint names on any mortgage. all are on my husband name only.
Sara (Debt Camel) says
Then tell Creditfix and Select that you do not own any property and you have no equity to release.
Anon says
Hello,
I have an IVA with Credit fix (just over 3 years in), my current mortgage deal ends in December.
– Is it easy to remortgage with an IVA? I have been reading online and some say it’s difficult, when I first got the IVA Credit fix told me an IVA wouldn’t affect me when I try to remortgage.
– Do I need to contact them before I remortgage?
– If I can’t remortgage do I just leave my mortgage running on the base rate?
Thanks
Sara (Debt Camel) says
who is your mortgage lender?
what is your current IVA payments?
how much do you expect your mortgage to go up in December?
Anon says
Hi Sara,
Mortgage lender is Virgin Money
Current IVA payment are £140
Mortgage increase if I can’t remortgage will probably increase by £150-200
Thanks
Sara (Debt Camel) says
“Mortgage increase if I can’t remortgage will probably increase by £150-200”
There are three options here:
1) you get a new fix with virgin
2) you get a remortgage with Virgin eg boring more
3) you get a remortgage with a different lender
2) and 3) are very unlikely when you are in an IVA as you will fail affordability checks.
1) should be straightforward. Virgin will not do an affordability check as they have already lent to you.
The Bank of England hasn’t changed base rates today. It may drop rates by 0.25% in November. But that may not have a major effect on mortgage rates which are already expecting this to happen.
How much will your mortgage go up a month if you get a new fix from Virgin at the current rates on offer?
Anon says
Thank you Sara
Can I do option one without going through CreditFix? Or do they need to approve it?
If I get a new 5 year deal I think about £90
Thanks
Sara (Debt Camel) says
No you don’t need to ask Creditfix. But the problem is that your IVA payments will no longer be affordable, unless they are very easy at the moment?
Karen says
Hello,
I have been in an IVA for 5 years. I am being told I have to re-mortgage to close my IVA down., I have been passed over to another company to sort this. They are saying its a re-mortgage but in fact this looks like a high interest loan as I am already in a fixed rate mortgage until May 2025. The one they are suggesting is 10% running next to my current mortgage fixed rate for 3 years. If my current mortgage goes up! what am I supposed to do as this other remortgage will be for just under 10 years and actually is increasing my debt. I am also expected to pay to further lots of fees having already paid a fee for the IVA and another fee. I thought things should have been sorted after 5 years but my stress levels are actually sky high!
Sara (Debt Camel) says
how much are you paying to the IVA at the moment? is this affordable or have your expenses been increasing?
you current mortgage – how large is it? how long until it ends? the current fix – what rate is that at at the moment? How much are you paying a month?
How large will the new secured loan be?
“10% running next to my current mortgage fixed rate for 3 years”
does this mean the new secured loan will be a variable rate, fixed for the first three years at 10% and then variable for another 7?
Barbara turner says
Hi I hope you can advice
My IVA is coming to and end and I have just received an email asking for my mortgage statement and the possibility to remortgage the house, probably not possible as I have an IVA but I have read that is possible! House is on my and husband name and he is not in an IVA so how it works if I get accepted? And what happened if I wasn’t working? I have separated and living abroad in Europe.
Any advice as I am getting a bit confused as I thought after 5 years paying without missing a payment now I have to remortgage, thanks in advance
Sara (Debt Camel) says
you are currently in Europe and not working? who is paying the IVA amount? is this affordable for you?
John says
Hi Sara,
Firstly can I say this is the most informative site I’ve seen on IVA equity release, thank you!
I am currently in the last few months of my IVA with Creditfix. In month 54 I was approached by their ‘partner’ Select Partnership who advised Creditfix had asked them to offer me an equity release. The style of the approach initially got my back up, as being from a sales background it felt very scripted but not entirely factual.
I went through the process and initially they were reasonable and advised they could offer a product with a repayment by more than half my IVA (so circa £200 per month). They asked if I would consider a full remortgage, but as I have a good fixed rate for the next 4 years (around 4%) I felt that it made sense for a 2nd mortgage. They went through the calculations and concluded that it was not viable and asked if I would pay more, to which I said no.
Next they went on to say they could offer me a full remortgage on my property and settle IVA in full (i.e. pay every penny I owed originally). The offer was at 14% for the whole value, which is essence meant I would be paying more than £10k per annum in interest alone, taking my mortgage more or less to retirement age. I said I didn’t see that as viable as I would have been paying less interest on the debt if my IVA failed and I took the debt back! I said I would look at alternative options, such as my bank; to which they said you’ll get rejected and Creditfix will not accept that as trying. It got a bit heated and I felt as though I was being bullied down a route that was not in my best interests. I asked to end the conversation and that all my information was kept confidential and not relayed back to Creditfix, to which they said they have to inform them!
Since this time I have approached two high street banks (including my mortgage provider) who rejected me. I’ve also approached Fluent Finance who are more specialist in these situations, and they concluded that ultimately it was not financially viable or in my best interest for a loan that would take me 20+ years to pay off. The last option was an IVA settlement loan from a company who offered £6k to settle my IVA early, which I’ve proposed but Creditfix are hesitant to even call a meeting with the creditors; and are being very slow in responding to emails.
I feel as though I’m trying reasonable efforts, Am I doing things right? Can I be forced to accept a rediculous offer that cripples me for life? I’m hoping to just get the final 12 months confirmed so I can plan for the future.
Additionally on my creditors report I can see a huge amount of my debt (about 60%) has ‘no proof of debt’ marked against it; and as such no monies have been paid to them. Is this normal and what happens when IVA ends for these, is there a chance they won’t be cleared/settled? My concern is poor Admin means that it will come back to bite me down the line.
Thanks for your assistance.
Sara (Debt Camel) says
So Select are being unhelpful – no surprise there! You could have told Select that what they were proposing something that was not in your interest, that this is against the Consumer Duty and if they carry on doing this you will make a formal complaint about this and send it to the ombudsman. You can’t take complaints about an IVA to the ombudsman but Select are FCA regulated as a loan provider and you can complain if they are proposing something unsuitable.
You need to tell Creditfix about all of this.
The “no proof of debt” should not be a problem later for you. Creditfix will explain this is you ask.
John says
Hi Sara,
Thank you for taking your time to read my epic comment and coming back to me. Your words are much appreciated and reassuring.
Samantha Warburton says
Hi John
My name is Samantha Warburton I am one of the Insolvency Practitioners at Creditfix, please could you contact me directly and I will look into this matter for you.
Kind regards
Sam
John says
Hi Sam,
Thank you for reaching out. I’ll email you directly tomorrow.
Kind Regards,
john says
Hi All,
I can confirm that CreditFix have been in touch to resolve issue. I have had my 12 month extension confirmed and feel much happier that I know where I am at going forward.
Sue says
Almost in year 4 of an iva – I owed 25k debt. Iva has got me back on track. Currently have paid around 8k into Iva and current payments are 196.
The equity release clause is confusing me and know it will be coming providing annual review goes to plan.
Initial contributions were 135 and now 196 which is fine. No issues with payments. In initial proposal they mentioned about 1600 to be released as equity for debts. I’ve read about this online and unsure how it will work.
Value of current house is 125,000 online and then I owe like 74000 on house so I know there is equity there. I’m fixed in til 2027 at 395 a month.
How much will they expect me to release. It’s just confusing me a little and some further clarity would be appreciated or even the process
Thank you
Sara (Debt Camel) says
Do you know how the £1600 figure was calculated?
How old are you and when does your mortgage end?
What is your current mortgage rate?
Sue says
Hello
This was based on 135×60 monthly Iva payments and when house prices were much lower. So initially agreement was taken out when I had just over 5k equity on house but since the house prices have increased it’s increased equity I think?
I am 31 years old and mortgage payments are 395 a month current mortgage rate is like 4% fixed in until 2027.
In the proposal initially that was roughly the amount of equity the creditors agreed to on the basis of that been released.
My mortgage was 30 years taken out 6 years ago. So like 24 years left
Sara (Debt Camel) says
So equity release will be through a new mortgage (very unlikely) or a secured loan (massively more likely.)
The £1,600 was just an illustration. It doesn’t affect what will actually happen.
On those numbers you have about 50k of equity. You have to be left with 15% of the value of your house, so about 19k. That leaves the equity that could potentially be released as 31k.
The cost of the additional mortgage/loan cannot be more than half of your monthly IVA contribution. So if you are paying £196 a month, no more than £98 a month. This means that if you can get the current contribution reduced (bills going up in April?) that will reduce the cost of the secured loan. This is well worth doing!
Sue says
So I will need to take a secured loan out to close my iva?
I did try and get a sprout loan last year to close the Iva and they said no….dunno just feels abit crazy.
If they expecting me to release 31k equity then that is more than my initial debt so confused with this? Are they aloud to do that. I owed 25k and have paid around 8k by time iva finishes will be just over 10k. Can they take the full equity in that case?
Sara (Debt Camel) says
No you won’t have to release more than than the total debt plus the IVA fees less the payments you have made.
Sue says
Okay
So annual review is coming hopefully of less payments mainly due to a change in a job where I have took a sight pay cut.
Payments are manageable so hopefully on annual review payments come down more. A secured loan for a few thousand pounds with a payment of 98 over a few years doesn’t sound that bad but we will see