Ending IVA early

Chumpalot

Evening (morning rather) all,

I'm roughly 2.5 years into a 6 year IVA which, if I'm honest has had me feeling down since it started. After reading up on plenty of threads here for the past year or so I'm wondering perhaps whether I was pushed into it.

Anyway, my monthly repayments of £269 have been going well. However a change in cicumstances has made me wonder what to next.

Very briefly, my Grandmother passed away over a year ago now and left quite a bit of money to my Mother (there was nothing directly left to us grandkids in the will as it was obviously thought my mum would know exactly what to do with it). The sum my mum would like to give me is £10k. I'm fully aware that I have to be honest with my IP about any windfalls or inheritances I receive during my IVA. However the money isn't mine yet and is still sitting in my mum's bank account.

I'm thinking of using this money to settle my IVA but not quite sure how to go about it (preferably in a way which would benefit me the most).

- Do I transfer the money to my bank account and let my IP know? or do I inform my IP that a third party is willing to settle my IVA for me?

The sum remaining (from memory) on my IVA is roughly £9,000. Last week I had a timely letter from Varden Nuttal asking for an increase in monthly payments as well as a lump sum of £250 (due to an increase in wages over the last 6 months). I of course would rather get this settled, and start afresh sooner rather than later. Rather than carry on down the road of getting payrises, only to see them swallowed up by Varden Nuttal.

Any help and/or guidance would be greatly appreciated. I'm keen to get back on the straight and narrow as soon as possible and would welcome any help at all.

Thanks

David

mjm3346

Do I transfer the money to my bank account

No, keep it at third party for a start.

Chumpalot

OK, thanks.

Am I right in thinking that when proposing an F&F the original debt amount is taken into account? If this is right then I'd be better off continuing with the IVA until its completion and simply keeping the £10k aside somewhere until it's all done (I really didn't want to do this as I'd like to get myself a mortgage and my own place before I'm 30).

I'd even consider a loan (not taken out by myself) and could easily live with the fixed monthly payments and term rather than an amount that is subject to change every 6 months (i realise this is in my t&cs but still, its added stress and uncertainty). I know its debt to pay debt but it's still an option I'd consider depending on the amount.

james32_uk

What you need to do is tell your IP that your mum is willing to offer a Full and Final lump sum settlement for your IVA. eg I have just had my offer of £7k accepted as a full and final settlement of my outstanding £10k left. This money has been leant from a friend. It is important that you dont take any of this money yourself as then it could be deemed a windfall and taken from you.

Chumpalot

I'm going to take a look at the paperwork now and see how much I'm paying. I'm worried that even though i've paid my monthly contributions every month without fail hardly any cash is going to my creditors.

Chumpalot

What would be the best way of roughly calculating a good offer to make? Due to various complications, my IVA started on 25 March 2009 (though I was making contributions well before that date) and was accepted at 57p/£ based on 72 monthly contributions of £269. I have probably paid roughly £9,000 so far looking at my statements.

FoggyBrain_2

Total dividend due was £19368, less the £9000 paid so far, leaves about 10 -10500 quid to go. Basically you need offer the best you can nearest that figure. James had £7k accepted on a similar amount outstanding. Much will depend on the reason you put forward for ending early too ... make it seem more inviting for your creditors to settle for a smaller sum now, rather than hang on for the full dividend.

Chumpalot

Thank you for your reply.

I shall make an offer of £8k to my creditors next week. My circumstances are due to change and it means I will be leaving my job to start up my own business. How is this likely to be viewed by creditors? Is it likely to make them accept the payment now?

Am I right in thinking that the IVA will still remain on my file for the full 6 years? I.e 25 March 2015? I'm aware of what I can do to clean up my credit file.

Thank you again.

FoggyBrain_2

Hi again. 8k sounds a good offer. If you are leaving your job to start a new business your creditors are more likely to go for a guaranteed £8K now, rather than gambling on your income remaining enough to service the IVA.

Remember the £8k is third party funds, from a relative and you will only be given it to pass on in the event the F&F is accepted.

Yes, the IVA will sit on your file for the full 6 years.

Best of luck.

Chumpalot

Thank you, pretty much as I suspected. I'm going to first ask for a breakdown of payments I've made so far so I know exactly what I've paid.

Thanks again for your help.