settling outstanding debts DURING an IVA.

chinup_3

Is the above possible basically? ie a debtor in a plan has the OFFER of some money to make a 'full and final settlement' to the creditors.

I understand a] the iva supplier is 'in communication' with the creditors so may theoretically get to hear of any independent 'approach ? b] ''independent'' as they would not want to be deprived of their eye-watering fees- thus there must be a ''early settlement fee ie a fixed-rate mortgage ?

thanks in advance for your help. interestingly could not find this on forums.

tuhin23

if you are already in an IVA you would have to offer the settlement via the IVA. Depending on where the money is coming from to settle you should be able to settle creditor would prefer some money now rather in small amount over 5 years. IVA company should reduce the supervisor fee's if you settle early.

If you offer a lump sum amount from family and friends as settlement that is the best way of settling if you receive money before the agreement by creditor they may consider it a windfall and want it in the Va and you are made to continue paying the agreed amounts. Clearly state this money is avail if they agree to settlement.

Any money you pay to creditor outside of the IVA would end up back in the IVA so go through your IP.

chinup_3

thank you for that. anyone else have an idea- experience even ? do they HAVE to use the iva company for F+F settlement? cos they won't want to to see their large profit gone will they.

happychappy74

Hi.

I was in my IVA for 38 months when I was in a position to make a full and final offer, through a third party otherwise it may be construed as a windfall / inheritance etc as they see fit. The offer was for about 40% of the outstanding amount and I am glad to say it was accepted. Athough the vote margin was agreed on 75.55%.

I looked into my total debt and it was explained that the IVA formed a binding agreement and so any offer had to go through the company I was dealing with.

I have just received a letter saying that it has been finalised but I am waiting for the full report and completion certificate now. If you are in a position to make any offer then I will have my fingers crossed for you. Good luck.

chinup_3

Thanks for that happychappy- very informative. guess thats why your'e happy then ie clearing the iva :beer:. interesting points there; 3rd party NOT ''windfall/inheritance'' especially. so if family,ESPECIALLY PARENTS, gave one cash to clear the outstanding a 'full + final' that would instead get swallowed up in the 'debtpile' ? . when does the 'scource' of help NOT come under this bracket i wonder ??

MIVAA

Hi Chinup,

Reaching a Full & Final Settlement to bring an IVA to an early finish is not uncommon, but there is a protocol to follow, which will protect you from breaking the terms of your agreement.

By trying to avoid paying the IP's fees you could possibly miss the bigger picture - and the offer you put to your creditors should reflect the deduction of supervisor costs which they will no longer incur, so try to focus on the settlement amount rather than who will get what out of the money.

As has been said before, the 'Source' of the funds is crucial, but so long as the funds being offered to the creditors through the IP are not your funds, then you should be OK.

Things to note:

The person providing the funds will need to have money laundering checks done on them, so as to prove the source of the money is legit. So make sure they are happy with that.

Make sure the money is definitely and immediately available.

The person providing the funds should keep hold of the money until your IP instructs them to pass the funds over. As said before, if the money is passed to you prior to the agreement being reached you could find the money is deemed your property by way of a gift and therefore taken by creditors under the 'windfall' clause of your IVA.

And finally, be sure to make the offer through the IP as it is undoubtedly in your best interests to do this, and remember, if you manage to get the 75% majority in favour of an agreement then all creditors will be bound which is what it's all about.

Good luck.

MIVAA