settling iva early advice please

danp100

hi,
i have only made 7 payments of 190 so far, however i have been thinking about asking my brother or sister to help me end me iva early, having read other similar posts. if i made my 10th payment and then had 190 times 50 months left to pay 9500 pounds, what sort of offer do you think might get excepted. i have seen on other posts that you could offer less than you would pay if you just continued the monthly payments? i am also wondering if a final offer would ever get accepted this early into the agreement? many thanks for the advice

FoggyBrain_2

Hi. Much will depend upon the reasons put forward for wishing to settle early. The more compelling the reason ( ill health, unemployment etc) the more likely the creditors will be to accept a lesser offer ( bird in the hand and all that).

At the end of the day, for them, it is a business decision. Yes, it is good to have a large lump sooner rather than later, but .. they might prefer to wait it out to see if there is any likleyhood that in the future your payments might increase ( pay rises etc) and they end up getting more in the long run.

danp100

hi,
thanks for the reply, do i really need a reason other than my sister is willing to help settle this early?
the reason i wonder about offering a lower amount is on another post someone had 30 months left and was told an offer of 3k could be acceptable?
I also mentioned in another post that i have moved and so i am now actually saving some cash, i guess my payments should really be increasing now? I have told my iva company my new address and stuff and they havent asked for any sort of review, so should i just wait for the yearly review to come round? what do they actually need to see at the yearly review, another reason i would like to end this early really if possible. guess there are a lot of different options its hard to know what the best thing to do is
thanks again for the advice

FoggyBrain_2

Hi again. The reason for just wanting to get on with your life is a valid one, but, in this instance the creditors will most likely want to see something approaching what they agreed to in the first place. They would still have the advantage of getting the money sooner rather than later, which has got to be a bonus!

On the move front, yes, you should be sorting out a new I&E with your IP --- better to sort this sooner, rather than later too, to avoid any shocks at review, when the IP might want back what they think you should have been paying over.

What they want at review varies, mine wanted three months wage slips and my P60, as well as evidence of changes in expenditure if I was claiming more on my allowances ( increase in electricity etc).

If, after 10 months, you still have something like £9500 to pay, there is no way they will accept £3k. I would say more like £8k (but, you never know). Don't forget that they will also be writing off a portion of your original debt too, so any offer is really to be measured against the original debt -- in an IVA the creditors have already agreed to take a loss -- in a F&F you might be asking them to take another loss.

danp100

thanks, i was thinking of offering around 8.5k sorry that was a bit misleading when i mentioned the 3k example. with the move i basically said my outgoings where the same, and they have never questioned it. i might be moving before the yearly review anyway, or as i said thinking of making the offer. do you think i should mention the offer to my IP now and see what advice they can give?

thanks again

FoggyBrain_2

Yes, I would run it by your IP now as by the time everything is sorted you will be making that 10th payment in any case ( time flies!). Hopefully you have a helpful IP who will put a good variation together for you.

danp100

thanks i will get onto this, maybe a dumb question but what do you mean by variation? does this include a final settlement, cheers

FoggyBrain_2

A variation is when the IP goes back to the creditoprs to change any of the agreed terms of the IVA. A full and final offer will be varying the terms by making a one off lump sum to end the agreement earlier than originally agreed.

danp100

if i make a final offer should i consider the fees? i mean i have just had a look over my arrangement and i am paying 190 a month, after fees my creditors will only get back 8420 in total. so if i have 50 months left should be looking at offering 50 times 190, or work out how much it would be after the fees, possibly as little as 7k?
thanks

FoggyBrain_2

It depends on how the fees are calculated. Mine are a percentage of my payments, so it doesn't matter if I pay early, they get the same. If the fees are on a time spent basis, obviously, the earlier you finish the less time your IP has to spend on your case, and so will charge less in fees.

oplus

IPs don't like early settlement because they can lose a chunk of income.