Help with early settlement offer

Lottie83

Hello

I am currently on month 20 of my 5 year arrangement and my payment is £314 per month. My circumstances are shortly going to change and instead of living with my parents, I will soon have to make arrangements to live by myself.

As things stand, I will not be able to afford the increase in rent and bills, so my IVA will eventually fail. I am therefore considering making an early settlement offer (if I can manage to obtain the funds). Can anyone give me a rough idea of what figure would be realistic?

Thank you in advance

Charco_2

You have 40 months left of payments of £314... multiply it out to see what you will be expected to pay over the next forty months... £12,560
minus three years of supervision fees (probably about £1,200) so your creditors will be expecting £11,360 I suppose.

The reality is, you should offer as much as you can afford to offer. If you can afford £11/12k then offer that... However, certain circumstances will be taken into account too!

Personally, unless a friend or family member has offered to help you out or you can suddenly afford a lump sum that you wouldn't otherwise already have to put into your IVA then I would simply speak to your IP about reviewing your payments.

When you do move in on your own, your circumstances will change and you obvioulsy wont be able to afford £314 a month... but will you be able to afford any amount? There will be a lot of bills to consider so you probably wont have much I'd imagine but it's worth reveiwing the I&E now to see exactly where you are!

Why are you moving out??? (and how much were your debts when you started the IVA?)

This could end up being important! A change in circumstances doesn't necessarily mean that your IVA would have to fail, you can simply ask your creditors to look at a different offer!

As regards offering the lump sum (your original question) i would say it will depend on how much you can actually afford. Your circumstances are changing so there is reason for you to change your offer.

However, if you're moving out to party in a flat with your friends then this is going to be looked onless favourably than you're amking a home with your partner as you're expecting a bundle of joy in the coming months. OR you are heading off to make a go of it at University.

Basically, as well as the actual money you are offering, you are going to need to offer your creditors a reason. Sympathetic stories will be looked on sympathetically, hardship stories will be looked at in terms of what is the best financial outcome. BR usually results in a zero return for creditors so they will usually only corner you with that if you've taken them for a ride.

Lottie83

Thank you for your helpful reply.

My original debt was around £26k (I haven’t got the paperwork with me so can’t check the actual figure). The reason I need to move out is my parents are relocating and I need to stay in my current area for my job.

I won’t be able to offer 11/12k, a family member has provisionally offered to help me but the figure would be more like 7k. I have spoken to the company that deals with my IVA as I am obviously concerned about the future and they have advised that I would still need to make a payment of at least £150 per month and the agreement would have to be extended to cover the shortfall. I don’t want to be tied into my IVA for an extra 3 years (making the total 8 years!) so for me, this is not an option. Also, I am not sure if realistically I would even be able to afford that.

If I cannot make a reasonable settlement offer would my only other option be BR? This would be something that I do not want to happen but am struggling to see a way forward at present.

Thanks again