Full & Final Settlement - is this right???

timberflake

Ok, so I recently posted on here asking about F&F settlements. I contacted my IP asking what it would cost to settle in full and final now.

I have 10 months left to run on my arrangement @ £386.40 pcm, so £3,864.00.

However, my IP said it would cost £2,900.00 for a F&F settlement to creditors and they said it could take up to 2 months to conveine a creditors meeting. So, taking that to be literally, it could be up to 25th Jan before I get the yay or nay, in which time I'll have to make a further £1,159.00 in contributions. If the offer is accepted thats a total of £4059.00 - £195.00 more than if I just kep up my payments for the remaining 10 months.

They told me I had to keep up my payments in case the creditors don't accept the offer, but I can't work out why it should end up costing me more!

Can anyone advise if this is correct??

Charco_2

This is because you rang up and asked what it would cost to settle the IVA - your IP doesn't know what it would cost to settle, this is just their best guess!

As i explained to you in your other post, your tactic should not have been:
"how much does it cost to settle?"

It should have been:
"look i've had a change in circumstances and it's affecting my ability to pay my monthly contributions, i cannot really afford to continue so i was hoping i could offer a lump sum - as supplied by my friend/aunt/father/child - to settle the IVA. I only have 10 months to run and would really like to avoid failing the proposal. I can offer £2,000"

Its YOUR proposal so your IP could refuse to offer this amount on your behalf, if the creditors rejected it then you would just have to miraculously find a way to continue your payments for the remaining 10 months.

Your IP has - in all likeliness - already earned and banked any fees that are due to them however if they vary your proposal now, they would also earn a small variation fee which is obviously in their interests!

Get your story straight and speak to them again (told you a reason would be important!)

timberflake

Charco wrote: »

This is because you rang up and asked what it would cost to settle the IVA - your IP doesn't know what it would cost to settle, this is just their best guess!

As i explained to you in your other post, your tactic should not have been:
"how much does it cost to settle?"

It should have been:
"look i've had a change in circumstances and it's affecting my ability to pay my monthly contributions, i cannot really afford to continue so i was hoping i could offer a lump sum - as supplied by my friend/aunt/father/child - to settle the IVA. I only have 10 months to run and would really like to avoid failing the proposal. I can offer £2,000"

Its YOUR proposal so your IP could refuse to offer this amount on your behalf, if the creditors rejected it then you would just have to miraculously find a way to continue your payments for the remaining 10 months.

Your IP has - in all likeliness - already earned and banked any fees that are due to them however if they vary your proposal now, they would also earn a small variation fee which is obviously in their interests!

Get your story straight and speak to them again (told you a reason would be important!)

I understand what you're saying, but I couldn't just invent a change in my circumstances that would be acceptable!

To be honest, it was a change in my circumstance that brought me this point, a family member, who helped me out with £200 a month towards my contributions died and I simply won't be able to keep up my monthly payments. However, I can hardly disclose this to my IVA as it will probably get me in more trouble!

Looks like the only way out is to fail the IVA.

Charco_2

It really isn't your only way out.

You can go back and ask again. Explain that your IVA has become unaffordable and that all you'd be able to offer is £2k... I'm not suggesting that you invent a reason, but a white lie aint going to hurt!

Why was your IVA unaffordable? Why was a relative contributing £200?

Stay calm, we can give it another bash before you throw the towel in!
You're on the final straight now. If you give up it'll almost be like you'd never tried, your debts will be coming back to haunt you so hang in - the £2000 should be enough to offer (and it's YOUR proposal so there's nothing to stop you offering) and if it is rejected then you surely could use the £2000 to help with the ongoing contributions!?

timberflake

Charco wrote: »

It really isn't your only way out.

You can go back and ask again. Explain that your IVA has become unaffordable and that all you'd be able to offer is £2k... I'm not suggesting that you invent a reason, but a white lie aint going to hurt!

Why was your IVA unaffordable? Why was a relative contributing £200?

Stay calm, we can give it another bash before you throw the towel in!
You're on the final straight now. If you give up it'll almost be like you'd never tried, your debts will be coming back to haunt you so hang in - the £2000 should be enough to offer (and it's YOUR proposal so there's nothing to stop you offering) and if it is rejected then you surely could use the £2000 to help with the ongoing contributions!?

Long story short, its always been unaffordable and my family has always helped me out with food etc over the last 4 years. When I entered into the IVA I still lived at home and it was the only way I could see of getting out of the mess I was in.

timberflake

They have just replied and said they would be willing to offer a reduced amount as long as they think it is a reasonable offer.

What would you say??

Charco_2

Try the £2000 offer you were originally going to go with. Explain to them that as circumstances changed gradually during your IVA (do you still live at home?) it got harder to make the contributions and a family member helped you out but he is no-longer able to and you dont think you'll be able to afford the monthly contributions now for the remaining 10 months.

Your IP will draw up a new Income and Expenditure to reflect your current true affordable dispoable income (which should be very little you'd hope), but that a good friend is willing to offer a lump sum rather than see the proposal fail.