What should I offer in Full & Final?

timberflake

I have 10 months left to run on my IVA and am currently paying £386.40 per calendar month. So, over my remaining term, I would pay £3,864.00.

A friend has now offered to clear the IVA, but we obviously want to get it at the best deal possible. Now, my contributions go out on the 25th of every month, so taking into account Novembers payment this reduces the total to £3,477.60.

Does anyone have any suggestion as to what we should offer in F&F? We were thinking about offering £3,000 and stating that for every monthly contribution made between now and the creditors meeting the offer would reduce by £386.40.

I know nothing about the how F&F works so would really appreciate any input people have.

MIVAA

Best thing to do is to dig out your IVA proposal.

Have a look at the fees that your creditors are being charged in supervisory fees by your IP.

Multiply this figure by the amount of months left to pay - and deduct it from the total amount still outstanding. this will give you a starting point from which to negotiate.

Your IP will not be able to suggest an offer for you to make, as they are supposed to be acting as a neutral, but bear in mind that it is 'your offer' to creditors, and if the creditors refuse to accept it, then you can still carry on making your normal contributions.

HTH

MIVAA

Charco_2

Just as important as the AMOUNT you wish to offer is the REASON you are offering. ↲If your husband died in Afghanistan leaving you no income and 20months to pay to an iva for joint debts then you could easily offer £000.00 per month and expect it to be accepted by your creditors. Alternatively you could offer the full £3864.00 and be rejected. ↲Your creditors want to know you're learning responsibility. They want you to know an IVA is not an easy out.

timberflake

Charco wrote: »

Just as important as the AMOUNT you wish to offer is the REASON you are offering. ↲If your husband died in Afghanistan leaving you no income and 20months to pay to an iva for joint debts then you could easily offer £000.00 per month and expect it to be accepted by your creditors. Alternatively you could offer the full £3864.00 and be rejected. ↲Your creditors want to know you're learning responsibility. They want you to know an IVA is not an easy out.

Not that I'm saying your wrong, but do you have any experience to back this up? Its just that I find it very hard to believe that creditors would no accept a reasonable offer in F&F because they didn't believe I'd learnt my lesson lol.

At the end of the day, they just want their money, they don't care how they get it, hence all the underhanded tactics they use to get money out of people.

By your logic, your saying there's a chance of them accepting £0 a month if I can prove I've learnt my lesson, and also a chance they won't accept 100% of what I owe now because they think they need to teach me a lesson!

Charco_2

timberflake wrote: »

Not that I'm saying your wrong, but do you have any experience to back this up? Its just that I find it very hard to believe that creditors would no accept a reasonable offer in F&F because they didn't believe I'd learnt my lesson lol.

At the end of the day, they just want their money, they don't care how they get it, hence all the underhanded tactics they use to get money out of people.

By your logic, your saying there's a chance of them accepting £0 a month if I can prove I've learnt my lesson, and also a chance they won't accept 100% of what I owe now because they think they need to teach me a lesson!

Not quite ha ha. I was using an extreme case (i.e the £0 offer) which i know has happens - but it is NOT obviously the norm!

But the point still stands that the reason can be as important as the offer.
You have 10 months to run and want to offer £3864 to your creditors. They'll get back what you have agreed to pay in the IVA, you'll get a clean sheet 10 months early and everybody's happy - until you win the lottery in two months time and your creditors gave up their claim on it by releasing you from your duties early! So instead of them getting all their money paid back in full plus statutory interest they've just got 30p in the £ for the sake of not holding on for a few months and just because you wanted to end your IVA early. (I know i'm being facetious or whatever but you should know what i mean!)

An Example
You've gotten your girlfriend pregnant. You're going to marry her now. Her father wants you to provide properly for his little girl and the new arrival so offers to wipe your slate clean with a £2k F&F offer to your creditors. Your creditors know that with the new arrival and family situation, your ability to pay your monthly contributions is going to be affected anyway so it makes sense to just accept the offer and wish you luck, send you on your merry way.

OR

You get offered a new job with better pay. You'll get a signing on bonus of £1000. You'll be able to afford to comfortably double your monthly contributions to your IVA but you dont wanna! You offer your creditors the £3864 to settle it now coz if you dont it's gonna cost you over £7k - are your creditor going to accept that? Would they accept £5k even? Even if they don't know about your new job, if you don't give them a reason to settle early then they're going to wonder "why now? What's changed?"

Your reason doesn't have to be complicated, but a good reason can mean you can offer less money, a bad reason could mean you'd have to offer more to get thei agreement.

As for MIVAA's suggestion, it doesn't really stack up. Your IP gets paid two ways.
1 Nominees: work done in reaerching, drafting, producing and holding a meeting for your IVA Proposal (which they would have been paid for by now - Probably £1,500 collected in the first five months of your IVA)
2. Supvisors: a fee they earn each year of your IVA for monitoring and administering your IVA (this is usually say £600 a year and is usually collected in the first months of each year).
If you are in your last 10 months then this will already have been paid and so the entire £3864 to be collected now is all going towards your creditors

Even without those fees though, your IP would probably have to earn a variation fee for changes carried out to your proposal at this stage to bring your F&F to a creditors meeting where they vote on your offer.

timberflake

Charco wrote: »

Not quite ha ha. I was using an extreme case (i.e the £0 offer) which i know has happens - but it is NOT obviously the norm!

But the point still stands that the reason can be as important as the offer.
You have 10 months to run and want to offer £3864 to your creditors. They'll get back what you have agreed to pay in the IVA, you'll get a clean sheet 10 months early and everybody's happy - until you win the lottery in two months time and your creditors gave up their claim on it by releasing you from your duties early! So instead of them getting all their money paid back in full plus statutory interest they've just got 30p in the £ for the sake of not holding on for a few months and just because you wanted to end your IVA early. (I know i'm being facetious or whatever but you should know what i mean!)

An Example
You've gotten your girlfriend pregnant. You're going to marry her now. Her father wants you to provide properly for his little girl and the new arrival so offers to wipe your slate clean with a £2k F&F offer to your creditors. Your creditors know that with the new arrival and family situation, your ability to pay your monthly contributions is going to be affected anyway so it makes sense to just accept the offer and wish you luck, send you on your merry way.

OR

You get offered a new job with better pay. You'll get a signing on bonus of £1000. You'll be able to afford to comfortably double your monthly contributions to your IVA but you dont wanna! You offer your creditors the £3864 to settle it now coz if you dont it's gonna cost you over £7k - are your creditor going to accept that? Would they accept £5k even? Even if they don't know about your new job, if you don't give them a reason to settle early then they're going to wonder "why now? What's changed?"

Your reason doesn't have to be complicated, but a good reason can mean you can offer less money, a bad reason could mean you'd have to offer more to get thei agreement.

As for MIVAA's suggestion, it doesn't really stack up. Your IP gets paid two ways.
1 Nominees: work done in reaerching, drafting, producing and holding a meeting for your IVA Proposal (which they would have been paid for by now - Probably £1,500 collected in the first five months of your IVA)
2. Supvisors: a fee they earn each year of your IVA for monitoring and administering your IVA (this is usually say £600 a year and is usually collected in the first months of each year).
If you are in your last 10 months then this will already have been paid and so the entire £3864 to be collected now is all going towards your creditors

Even without those fees though, your IP would probably have to earn a variation fee for changes carried out to your proposal at this stage to bring your F&F to a creditors meeting where they vote on your offer.

My reason is simple, I've been struggling to meet my contributions each month and I've already had my payments lowered once 2 years ago. I can't see how I am going to manage to meet my contributions over the next 10 months so a friend had offered the money and I will pay him back at a reduced monthly payment.

Charco_2

Not all your creditors will be interested in the reason (some of them will) but your IP will have to say whether or not he recommends the variation to your creditors and so he'll definitely need a reason to base this on.

Continued affordability of your contributions is definitely a reason worth considering offering a F&F for (but i wouldn't mention to the creditors that you'll be paying him back over a longer time frame, just that he is willing to offer this now. It's money you wouldn't be able to offer yourself).

There are no set guidelines governing what might be considered an acceptable F&F offer. It just has to be a representation of what you can reasonably afford to offer. If your friend can offer £1000 then that's all you can offer (it may be unlikely to be accepted but there ye go!)

It would be worth checking your IVA proposal for this though:
What would constitute a breach of the IVA for which your IP would fail you?
Usually three missed payments would get you a fail but you'd probably get away with two missed payments that you'd make up later - you could even discuss this with the IP or his company. You don't have to miss the payments even!

You are expected to pay £3864 over the next 10 months - £386.40 a month!
If you could pay this over the next 12 months then it would only be £322 a month - is that any more affordable? 13 months = £300 a month!

However, if your friend is willing to offer the £2k and you'll repay him then that probably is your best option - provided you dont fall out over it - and stands a good chance of being accepted if dressed up the right way!

First, show that your contributions have become somehow more unaffordable (a new expense in your life, or a cut in your earnings) and that perhaps your friend has been kind of helping you out each month anyway... then your friend said "enough is enough, lets put an end to this". So this is what you can offer, £2k to end the misery.

As MIVVA said above, if the offer is rejected you can still try to finish your out your IVA, no harm no foul! (perhaps your friend would be willing to help you out with the contributions in this case because if your IVA fails you'll be back to square one with your creditors)