Clearing an IVA

R_Wilkinson · 18 January 2018 at 11:10PM

Hi All,

I have looked though many forums and cannot find a straight answer to my question so I thought I would ask it outright.

I am 10 months into my IVA which is fairly sizeable. The total debt was calculated at £78000 which I am currently paying back at £750 per month.

My parents are due to come into a large sum of money and have offered to give me £100000 of the windfall. This is where I cant find a straight answer.

I have to declare the windfall as per the terms of my IVA, but can I just offer to pay the total balance ~£71000 to clear the IVA in full.

Most forum posts I have found are all about offering a percentage of the outstanding amount via a third party as a time limited full and final offer, but non address contacting my IVA provider and paying off the total remaining balance.

I understand its an unusual way of clearing an IVA, however I am due to receive my pension in two years time, and I dont want to enter my pension and immediately lose my lump sum to an ongoing IVA.

Regards and thanks for any advice

National_Debtline · 19 January 2018 at 2:30PM

Hello and welcome to the forum.

There is no good reason that you can't approach your insolvency practitioner with a proposal to complete the IVA early and in full. You just need clarification from them of what the precise settlement figure would be and take it from there. Pending those discussions, it would be wise for your parents to hold fire on gifting you any money in the meantime.

Dennis
@natdebtline

Berniefc · 8 May 2018 at 2:45PM

Hi I!!!8217;m looking for some advice I!!!8217;ve been in an IVA for 2 years and recently had a child which has had a significant impact on my life as you can imagine. When I started my IVA I was renting a room to make sure I could afford it but now I need to get my own place so that I can have my son on weekends this would mean my I couldn!!!8217;t keep up my payments to same the amount am paying currently which is 346 a month would this be a fair reason to offer early settlement as I have opportunity to loan the money off a family member who can get a loan for 9500 which would have a cheaper payments than my existing but would mean me taking a loan before getting it accepted I wouldn!!!8217;t tell my IP it was from a loan I!!!8217;d just say it was a gift. Would this be reasonable ?

mwarby · 9 May 2018 at 6:46AM

:A

Berniefc wrote: »

Hi I!!!8217;m looking for some advice I!!!8217;ve been in an IVA for 2 years and recently had a child which has had a significant impact on my life as you can imagine. When I started my IVA I was renting a room to make sure I could afford it but now I need to get my own place so that I can have my son on weekends this would mean my I couldn!!!8217;t keep up my payments to same the amount am paying currently which is 346 a month would this be a fair reason to offer early settlement as I have opportunity to loan the money off a family member who can get a loan for 9500 which would have a cheaper payments than my existing but would mean me taking a loan before getting it accepted I wouldn!!!8217;t tell my IP it was from a loan I!!!8217;d just say it was a gift. Would this be reasonable ?

Worth you and family member considering what would happen if circumstances change again. Your family member could be stuck with the loan (it wouldn't legally be your debt). Have your talked to your IVA company about the payment difficulties, they maybe able to propose a modification to lower your repayments

Berniefc · 9 May 2018 at 7:29AM

they won!!!8217;t lower my payments I!!!8217;ve already asked seems like am stuck right now

mwarby · 9 May 2018 at 5:43PM

Have you considered bankruptcy ?

The big plus being no new debt, and you can't fail it. If budget is really tight you may not get an IPA so could be free in a year

The big negative is it's 6 more years of poor credit

Berniefc · 9 May 2018 at 7:01PM

I would consider bankruptcy but that will leave me no disposable money for 3 years where as Iva leaves me a little each month

Somerset_mum72 · 12 September 2018 at 9:32PM

I’m stumped by my Iva. Was supposed to end April and I was waiting for creditor meeting when I got my divorce settlement in June
I let them know I now had money to complete
The total debt at start of IVA was around £20k and so far I’d paid off £13k. The final figure I’ve been given is £17k which means the initial £20k of debt will now cost me £40k to settle and this is after the IVA was supposed to have ended. Surely 50% more than initial debt can’t be right?

utterly_ashamed · 12 September 2018 at 11:03PM

Why would BR leave you with no disposable income?

Craig1981 · 13 September 2018 at 6:10AM

Somerset_mum72 wrote: »

I’m stumped by my Iva. Was supposed to end April and I was waiting for creditor meeting when I got my divorce settlement in June
I let them know I now had money to complete
The total debt at start of IVA was around £20k and so far I’d paid off £13k. The final figure I’ve been given is £17k which means the initial £20k of debt will now cost me £40k to settle and this is after the IVA was supposed to have ended. Surely 50% more than initial debt can’t be right?

the IP costs can be anywhere up to £10k, dependant on the IP. this is paid off first before your debts are paid, as per the IVA contract
13k plus 17k = 30k... not sure where the 40k comes in?

so, you have paid £13k, this has cleared the costs and only a small amount so far to the creditors...
but the £30k total (debt plus costs) does seem right

Somerset_mum72 · 13 September 2018 at 9:28AM

Gutted! As I assumed the IVA prevented lots of interest etc
Yep the £40k was my tired brain last night 😂

Clearing an IVA

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