Full and Final IVA

Really dumb question but what is a full and final IVA? Can you make a big payment to your creditors during your IVA to end it? Do you have to pay the total amount or is it a percentage of what you owe?


ps have finally decided to go with the IVA rather than BR so will no doubt be around here a bit more now although hopefully with a decreasing number of stupid questions lol!
Finally getting my life on track. Onwards and upwards.
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  • Charco_2
    Charco_2 Posts: 1,677 Forumite
    edited 20 February 2010 at 12:45PM
    A full and final is a one off lump sum payment to settle the outstanding debts - generally within an IVA. Your IVA could be based on a one off lump payment from the very start OR at some stage during your IVA your circumstances may change which means you can now offer a one-off payment.

    You can do it at any stage, but obviously you'd need to be offering money that you wouldn't otherwise have to bring into the arrangement. It can be the full amount outstanding or just a percentage - but should reflect the most you can reasonably afford to offer (but often its a guess of what your creditors will accept and what can get away with ha ha).

    I'm only using my phone to post this and it's a bit crappy so i'll stop now - i'm sure others will be along to fill out your knowledge and i'll be back too. (PS - The only dumb question is the one not asked... Wouldn't it be sillier to be sat there confused or wondering and NOT trying to find out)
    Would you ask the wolves to look after the sheep?
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  • happychappy74
    Charco is quite right.

    I finished my IVA last summer by way of Full and Final offer. I was 3 years, 3 months into it.

    There is no ready calculation to figure out what is a reasonable offer and so it is hard to suggest a figure.

    I sat down and worked out how much I would have paid back in the course of the full run of my IVA, compared to how much I had paid out to that date. I then offered a little more than 50% of the difference (and crossed my fingers).

    I also took into account that there are fees by the IP for setting up the meeting for the proposal (which were quite high and made me realise I am in the wrong line of work). This is deducted from the IVA payments, so if it is a reasonable offer then it is in the creditors interests to accept it rather than reject and have me make another offer at a later date, thus reducing their return even further.

    In the end my offer was accepted by a margin of LESS than 1%!!!!!!! so those crossed fingers really did pay off.

    I got the distinct feeling that some creditors view the whole IVA/Full and Final offer process as more of a punishment than a financial/legal agreement and so would reject it anyway out of hand. I say this as the same companies that rejected the IVA or didnt vote followed that same pattern in the Full and Final offer.

    Remember that if u approach your IP stating that you have come into a big wedge of money then they will say 'Thank you very much its classed an an additional windfall, hand it over'. Likewise if you just want the IVA off your back then the creditors may be less considerate and view it that you just want to cut and run at their cost.

    BUT.....if, for example, there are factors in your household that will potentially affect your future payments i.e. your job/wifes job at risk, yours/wifes health, execting a baby etc then should a member of the family wish to assist you back onto your feet by making that offer then it may just go a long way.

    Sit down, work it out and make the offer. They really can only say no. In which case you just make an offer at a later date.

    Good luck.
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