Monday 22nd of June 2009
Homeowners with an individual voluntary arrangement (IVA) may wish to seek advice on how falling property values will affect their agreements.
The Bank of England recently revealed that more than one million people are in negative equity on their homes, a situation that could be particularly dangerous amid the recession, the Independent suggested.
Citing debt advice experts, the newspaper said "negative equity can really bite when personal circumstances change, in particular, being made redundant or being unable to work due to ill health or injury".
People in this situation can refer to their IVA proposals for information. Whether the equity is positive or negative, the document details what obligations the homeowner has to their creditors in this regard.
IVA advice can also be sought prior to entering an arrangement to find out exactly how it will affect the property.
In general, future equity is excluded from IVAs for those entering into one when the value of their home is less than the amount of money borrowed against it.
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA support 'increasing in Britain'
