IVA F&F offer

Doglover

Hi all, I wondered if anyone could advise on an appropriate F & F offer. My husband has an IVA which is due to complete Oct 2010 and we'd like to try and clear before then. We understand that it'll stay on his credit file for the full 6 years from the start date.

Any suggestions would be great, thanks in advance.

Not_so_wise_one

Rule of thumb I believe is to initially offer about 40-50% of the total remaining amount as a F&F. Best thing to do is contact your IP would be in the best position to advise you / your husband.

Someone feel free to correct me if I am wrong. :-)

leeds4ever6

hi there. the best person to ask about a full and final offer is ur supervisor. he/she will know best. but my friend offered less than half of amount owed and still was accepted.

Doglover

Thanks for replying. The IVA Co implied that we need to offer as close to the full amount outstanding as poss. so I'm not keen on getting their advice.

So are you suggesting that approx half of the remaining debt should be our offer? Or is it that we should offer half of what we would be paying in monthly payments if we complete it by our normal monthly payments?

Sorry if I'm missing something from the earlier posts - I am grateful to receive your replies.

Thanks again

a2062cad

My IVA was a F & F based on 118k unsecured. Agreed £50k inc IP fee's. This was based on cashing in endowments, family help and some investments.

To me it seems to be about your ability to raise and get CASH versus how long it will take to complete the IVA.

Keep searching this website and then take some advise from, perhaps another IP company.

Good luck

Doglover

a2062cad wrote: »

My IVA was a F & F based on 118k unsecured. Agreed £50k inc IP fee's. This was based on cashing in endowments, family help and some investments.

To me it seems to be about your ability to raise and get CASH versus how long it will take to complete the IVA.

Keep searching this website and then take some advise from, perhaps another IP company.

Good luck

Thank you . . .

Were you paying it for long before completion? If you made the same amount of monthly payments as a lump sum, how much would that have totalled compared to the amount you paid off?

Good advice about speaking to another company, I'll do that. Thanks

a2062cad

Doglover, I paid the £50k in one lump sum to the IP. Of course this was agreed beforehand that this was sufficient to get agreement from creditors.

I did the execise of 5yrs with final equity release vs cashing in policies etc. For me it was much better to do the F & F, less though for the creditors. BUT again it seems that in the current climate having CASH NOW seems to recieve a positive responce.

Hope this helps.

MIVAA

Hi Doglover,

Everyone's case for a Full & Final settlement will be different, and therefore it is really difficult to generalise as to how much the creditors will accept in each case.

Essentially, a new creditors meeting is called to consider the offer. Just as at the first creditors meeting a majority, 75% in debt terms, will be needed before the settlement can be considered accepted.

During this process, the creditors will be shown a comparison between the settlement being proposed and the expected return from the clients bankruptcy.

This is why there are such varying degrees of accepted settlements. If a bankruptcy would generate very little return for the creditors, then in contrast an IVA settlement might only return just a little more than that.

However, with more complicated IVAs, perhaps where there's a property involved, or when scheduled increases were built in to the IVA's payment schedule, it becomes more difficult to assess what creditor's would settle for.

But generally, and in most cases, creditors will agree to a settlement if it is reasonable offer.

One thing is for sure though - by ending the IVA early, you reduce the mount of fees the creditors will have to pay to the supervisor. Therefore, if you know how much of your IVA payment is being paid to the supervisor in fees each month, you can deduct that amount x however many months remain on the IVA from the settlement straight away.

For example: IVA paying £300 with 2 years remaining with £50 going in fees

24 x £300 = £7,200 minus (24 x £50 = £1200) = an offer of approx £6,000.

Hope this sheds a little light.

MIVAA

Doglover

a2062cad wrote: »

Doglover, I paid the £50k in one lump sum to the IP. Of course this was agreed beforehand that this was sufficient to get agreement from creditors.

I did the execise of 5yrs with final equity release vs cashing in policies etc. For me it was much better to do the F & F, less though for the creditors. BUT again it seems that in the current climate having CASH NOW seems to recieve a positive responce.

Hope this helps.

Hi, would you mind letting me know how far into the IVA you were when you paid it off?


Thank you

MIVAA

Hi Doglover,

The offer you make is up to you. Your creditors do not have to accept it, that part is up to them.

Whatever you offer, the worst they can do is say no, but it is worth mentioning that there is a cost involved to the creditors, so you should try to maximise the chances of getting their agreement first time, otherwise you'd have to restart the process again just to make another offer.

When there has been a change in circumstances surrounding the person in the IVA and that persons ability to continue with their IVA payment schedule, then creditors will take note of this. But if someone want rid of an IVA just because they are fed up of it, especially when there has been little or no change in that person's circumstances then the advantage to the creditors rests only with the 'Have some money today rather than a promise of more money tomorrow" argument, which is not so compelling in my opinion.

Make the offer for as much as you think is reasonable in the circumstances - and for what it's worth, I don't think £3,500 will be enough and think you should be looking at around £4,500, but it's not up to me, it's your call.

By the way, I think a2062cad offered a full and final settlement to his creditors instead of entering into a 5 year arrangement, which is completely different to the settlement that you are putting forward. If I'm right a2062cad only made one payment to his creditors, for an agreed amount, specifically designed to clear his debt in full from the start.

Good luck anyway.

MIVAA

Doglover

Hi, thank you all for your advice.

We'll just have to wait and see but I wanted to express my gratitude for the open-ness and advice given by everyone.

Will post an update when we hear