How will an IVA affect the equity in my house, home or property?
Effects of an IVA on your equity
We receive a lot of calls and emails from the public asking; "How will IVA affect the equity in my house?".
In this section of the site we will explain the confusing topic of how the equity in the property will be affected in an IVA. An IVA is an offer to your creditors that will include paying a monthly amount back each month for up to 5 years.
If you own a house, home or property then the creditors will want to know how much equity you have because this equity is an asset they would like some of it. This is only fair because if you went bankrupt they could force you to sell the house, home or property and therefore get all the equity.
Under the terms of an IVA you will not be forced to sell your home, house or property. In some IVAs the creditors may request you release some of any equity from the property and then pay it into the IVA, for payment to the creditors. The creditors can request up to 75% of the equity payable either during or at the end of the IVA.
In some IVA cases people may be unable to release 75% of the equity. If this situation occurs then the creditors sometimes accept a lower. To make up for the lower amount the credits may ask you to offer 12 months further payments. This would mean you will not lose your home, house or property; instead your IVA would be 6 years instead of 5.
Stages in dealing with the equity in the home, house or property in an IVA
- If it is reasonable up to 75% of the equity in the home, house or property will need to be released
- Most people do a remortgage to release equity in the home, house or property for the IVA.
- Most people remortgage or release equity in the final year of the IVA. However ever case is different
- The fist stage to releasing equity is obtain the following documents; valuation on the property from 2-3 local estate agents, get some clipping from the local papers showing the prices of similar properties for sale and obtain a mortgage redemption certificate from your lenders. The IVA Insolvency Practitioner will want to see all this information so he can work out your equity.
- The IVA Creditors usually request as much equity as possible but end up receiving as much as your remortgage allows you.
- Due to the recent “Credit Crunch “where banks are not lending such high mortgages this will mean your equity will be far lower.
- If a remortgage is not possible then the IVA creditors will ask you to extend the IVA to 6 years.
If you wish to discuss the Individual Voluntary Arrangement (IVA) procedure and understand how it can help you please complete the following form or telephone freephone 0800 074 6918.
The UK Insolvency Helpline’s IVA team are experts in this difficult area and will help you understand how an Individual Voluntary Arrangement –IVA will affect the equity in your house.
IVA Knowledge Base Menu
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- Why should I choose an IVA? |
- What will an IVA cost? |
- Are there any additional fees after my monthly contributions to my IVA? |
- Is an IVA the best option? |
- Will I lose my home, house or property in an IVA? |
- How will an IVA affect the equity in my house, home or property? |
- Can I still obtain a mortgage with an IVA? |
- What happens if some of my creditors disagree with the IVA? |
- Is the IVA registered on your credit file? |
- Are there any disadvantages to an IVA? |
- What happens if I come into money whist I am in an IVA? |
- Can I include family members that I owe money to in an IVA? |
- Can I still have a bank account with an IVA? |
- How do I settle my IVA early? |
- Will an IVA affect the people I live with? |
- Can self employed people do an IVA? |
- Can I get an IVA while living abroad? |
- Who can enter an IVA? |
- Will I lose my house with an IVA? |
- Can I stay in business with an IVA? |
- I am a professional person will it affect my position with an IVA? |
- Will an IVA become public knowledge? |
- How long does an IVA last? |
- Which creditors can be included in an IVA? |
- Can I enter into an IVA if I have already received a Statutory Demand? |
- Can I obtain an IVA if a Bankruptcy Order has been made against me? |
- What happens if I don't keep up the payments on my IVA? |
- What happens once I finish paying my IVA? |
- Can I enter an IVA if I already have CCJs against me? |
- Does it make a difference if I am a homeowner with an IVA? |
- Do I have to tell my partner if I do an IVA? |
- Does an IVA cover all of my debts? |
- What is the difference between a secured and unsecured debt? |
- Do creditors have to accept an IVA? |
- Can an individual creditor refuse to accept an IVA? |
- Will the IVA prevent my creditors taking further recovery action? |
- What if my circumstances change whilst in an IVA? |
- Can I cancel the IVA once it is set up? |
- What happens if I just stop paying into the IVA? |
- How long does it take to set up an IVA? |
- Will interest and other charges be frozen while the IVA is being set up? |
- Can a creditor take further recovery action before the IVA is approved? |
- What happens if the IVA is not approved? |
- What Does IVA Stand For? |
- How do I work out how much I can afford to pay per month in to an IVA? |
- I am considering an IVA. How does it work? |
- Do I have to attend IVA meetings, or can this all be done by post? |
- What do creditors expect from an IVA? |
- How likely is it that an IVA will be accepted? |
- Are all creditors forced to accept the IVA majority decision? |
- What happens if the creditors don't like the IVA deal? |
- What do I do if the IVA is rejected? |
- IVA - Individual Voluntary Arrangement |
- I've buried my head in the sand, now I've got a bankruptcy petition hearing next week. Can I do an IVA at this late stage?
- Will an IVA really write off all of my debts?
- Will I live in poverty for the duration of the IVA? |
- What if I win the lottery whilst in an IVA? |
- What if I get a pay rise whilst in an IVA?
- Will my IVA appear in the newspapers? |
- Will people know about my IVA? |
- Will I ever be able to get credit again after an IVA? |
- Is an IVA more expensive than just going bankrupt?
- What will happen to my house in an IVA? |
- What will happen to my furniture in an IVA? |
- What will happen to my car in an IVA? |
- I run a business. What will happen to my business in an IVA?
- Will my partner have to contribute to my IVA?
- My partner and I have joint debts. Can we lump them all together in the same IVA?
- What happens if I'm unable to keep up with the IVA payments?
- What happens at the end of the IVA arrangement?
- Are there any upfront fees with an IVA? |
- Why should I consider an IVA over bankruptcy? |
- What are the advantages of an IVA over a debt management plan? |
- How will an IVA Improve my life? |
- Is there immediate relief if I do an IVA? |
- How much debt do I need to do an IVA? |
- What types of debt can an IVA deal with? |
- Can utility bills be included in an IVA? |
- Will an IVA stop collection calls? |
- Will an IVA freeze my interest rates? |
- Will I have to sell my house if I do an IVA? |
- Will an IVA stop home repossession? |
- How will An IVA affect my home equity? |
- Can I keep my car if I do an IVA? |
- What assets might an IVA affect? |
- Will an IVA be reflected on my credit file? |
- Can I still use the credit cards I've included in an IVA? (no content) |
- Do I need to include all my creditors in an IVA? |
- Can I apply for credit while I'm in an IVA? |
- Will I need to change bank accounts in an IVA? |
- What will my monthly payment be on an IVA? |
- What if I am unable to keep up with my payments in an IVA? |
- Can my IVA payments go up? |
- Under what circumstances can I reduce my IVA payment? |
- Who will know if I do an IVA? |
- Will my landlord need to know if I do an IVA? |
- I've decided to do an IVA, should i stop paying my creditors now? |
- Will an IVA affect my employment or my ability to get a job? |
- I'm in an IVA and I've lost my job, what can I do? |
- What situations would prevent me from doing an IVA? |
- I've been told I can't do an IVA, what should I do? |
- Can I exit out of my IVA before five years? |
- Under what circumstances can an IVA proposal be rejected? |
- What percentage of IVA's are blocked by creditors? |
- What happens if my IVA fails? |
- What if I can't remortgage as per my IVA proposal? |
- Can I include HM Inland Revenue and Customs (TAX) debt in an IVA? |
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