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 £140,000 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 £30,000 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
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?
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.