Friend is offering to settle my IVA - what is the procedure?

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:j

Long and short of it is, a good friend of mine is willing to settle my IVA for me. Great im thinking, but I dont know the best way to go about this.
  • IVA balance £6000 Maximum
  • Mortgage balance £94'000 (possibly a little more due to missed payments)
  • House valued by Indepandant Surveyer at £110'000
Am i right in thinking that although I am repaying £142.00 monthly, my IP would still have to address any equity in my property... so £6000 is not the final figure, I need to calculate how much equity I have too?

If I multiply the value by 0.85 because no lender will lend me more than 85% then take away my outstanding mortgage this will give me the figure im going to have to address from my equity as well as the £6000 IVA balance!


If the bold is correct I am in negative equity.

£110000 x 0.85 = £93500

£93500 - £94000 = -£500

I know I need to offer a figure in writing "without prejudice" and i will be telling them that this money from a friend is availble for a limited period and will be paid directly from the friend.

Can anyone tell me if I am presuming and doing the right thing?

After this IVA has gone I have 1 more loan to pay off before I am debt free!!!

Any help is much appreciated.

Max
£12'800 Halifax Loan
£6000 IVA
£400 British Gas
£200 United Utilities Debt Free Date Goal 31/12/2011
Proud to be dealing with my debts! :D
Christmas 2010 savings @ a poor poor £50 :(

Comments

  • missfendiuk
    Options
    Remember the friend is going to definitely undergo a money laundering check (which involves them leaving there address, dob etc), all IP have to do it for the person lending the money...
    also, it takes a minimum 28 days notice to the lenders to alert them of a variation, plus a very recent year review normally must take place

    good luck
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Why do you have one more loan? Unless it is secured (like your mortgage or car HP) then it should be included in your IVA - this could be a problem as you would be treating this loan preferrentially!

    Most of what you are saying is correct, but I would get your story in line too!

    "I just wanna end my IVA" - doesn't cut much mustard with your creditors. If you are agreed to pay £6k then that's what you'll have to offer at least. Your creditors don't want to think that you're simply taking an easier way out... some of them can be a bit huffy and refuse to play ball (even if the money adds up!)

    Is there any potential change in your circumstances? Good or bad!?
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • Max7051
    Max7051 Posts: 31 Forumite
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    Charco wrote: »
    Why do you have one more loan? Unless it is secured (like your mortgage or car HP) then it should be included in your IVA - this could be a problem as you would be treating this loan preferrentially!

    Most of what you are saying is correct, but I would get your story in line too!

    "I just wanna end my IVA" - doesn't cut much mustard with your creditors. If you are agreed to pay £6k then that's what you'll have to offer at least. Your creditors don't want to think that you're simply taking an easier way out... some of them can be a bit huffy and refuse to play ball (even if the money adds up!)

    Is there any potential change in your circumstances? Good or bad!?

    Thanks

    Charco wrote: »
    Why do you have one more loan? My Halifax Loan is Secured to my property so could not be taking into my IVA. Unless it is secured (like your mortgage or car HP) then it should be included in your IVA - this could be a problem as you would be treating this loan preferrentially!

    Most of what you are saying is correct, but I would get your story in line too!

    "I just wanna end my IVA" - doesn't cut much mustard with your creditors. How else should I approach it? I want to clear my debts with my creditors. If you are agreed to pay £6k I have not agreed anything yet. I am going to offer 1/2 (£3k) then that's what you'll have to offer at least. Your creditors don't want to think that you're simply taking an easier way out... some of them can be a bit huffy and refuse to play ball (even if the money adds up!)

    Is there any potential change in your circumstances? Good or bad!? Circumstances are my ex left me and children last Nov and he went bankrupt but left me with the joint secured loan and my iva and a mortgage to pay. Nothing changed since except my friend offering to help me out, its a gift, not a loan. Will I be better saying its a gift or a loan? The cash is there waiting for me to use.
    £12'800 Halifax Loan
    £6000 IVA
    £400 British Gas
    £200 United Utilities Debt Free Date Goal 31/12/2011
    Proud to be dealing with my debts! :D
    Christmas 2010 savings @ a poor poor £50 :(
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
    Options
    Much better!

    As I've literally just mentioned on another thread, sympathetic stories will be looked on sympathetically.

    When I said "if you're agreed to repay £6k", i meant as ongoing repayments towards your IVA.

    So you do have £6k outstanding if you added up all the payments over the remaining months of your IVA!? You're roughly 1/3 the way through your IVA (20ish months done).

    Then the way to approach the subject is to contact your IP and explain that you can no-longer afford your ongoing monthly contributions and you would like to propose a F&F variation to your IVA.

    £3k would probably be just pushing the boundaries of a reasonable offer... £6k remaining minus fees... probably £5k to your creditors if you saw out your remaining IVA...

    Remember to concentrate on your story... changed circumstances, partner left leaving you with the kids, can't afford you ongoing monthly repayments... friend making you an offer (doesn't matter if it's a loan or a gift, it's help)... then simply insist that your IP puts forward this offer to your creditors. If your creditors reject the new offer, you will still have your IVA, it doesn't automatically fail.
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • Max7051
    Max7051 Posts: 31 Forumite
    Options
    Thanks Charco,

    Ill get a letter written ASAP, would it look better if stated in the letter the ammount I propose to pay each creditor, paying more to the creditor I owe the most?

    And whats this about a money laundering check? My friend is either going to pay cash or onto his credit card, will credit card be a problem or is it a case of money is money in their eyes? He said he will feel safer using his credit card for the payment.

    Thanks again

    Max
    £12'800 Halifax Loan
    £6000 IVA
    £400 British Gas
    £200 United Utilities Debt Free Date Goal 31/12/2011
    Proud to be dealing with my debts! :D
    Christmas 2010 savings @ a poor poor £50 :(
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
    Options
    Dont bother breaking it down, your IP will do that. Contact your IP first to discuss your problems and that you are really struggling. Then say that a friend has offered to lend you the money. Your IP will take care of the rest. It'll be up to your IP to draw up a variation to your proposal then...
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
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