Should I settle early?

sgiye

Hi

I'm just about to complete year 3 of my IVA and have 25 payments of £200 left. I own my house so have the clause where they will look at my house in 4th year and then if I can't remortgage to release equity they will add another 12 payments onto the IVA.

My situation has changed a lot since starting the IVA. My husband left me and we have divorced. I got the house and all the debt and he basically just walked away, but he's still on the mortgage until I can get him off the mortgage.

My fixed rate is due to finish this month too so I will be going on a variable rate.

There's the background! If anyone could give me advice on the following I would be grateful.

My boss has offered to lend me the money to get out the IVA. But is it the sensible option to settle early?

I called my IP and they said the ideal amount to settle would be £5000 as I have 25 payments left at £200. My boss has offered to lend me £3500. I would make another payment before the meeting to discuss the settlement anyway so it would drop to £4800. Is £3500 realistic for my creditors to accept? Or am I getting out the frying pan into the fire kinda thing?

Any advice greatly appreciated

GlamGirlie

Hi,

Obviously each case is assessed on it's own merit but I would think £3.5k would probably be too low.

Check your IVA agreement - does it have a minimum dividend/return to the creditors? Mine does. If yours does, you know you need to achieve at least that much (eg 44p in the £1). Anything under that wouldn't be accepted as they know they'll do better by continuing the IVA.

Also, borrowing from your boss could potentially cause an almightly mess. The old adage is never borrow from friends or family - but your boss could be much worse.

He/she may seem nice enough now, but the problems they could cause you later on if they decide they want the money back could ruin your career.

Be wary!

Gimpsdad

WIth your situation changing, and your mortgage payment going up, whilst I don't disagree with GlamGirlie, it may still be well worth thinking about. If it can be proven that your disposable income is now so low that it makes the IVA very difficult for you, then they may be persuaded that a bird in the hand is worth 2 in the bush. Do an SOA on here at your new circumstances if you wish and that may throw up some clues.