IVA Final settlement questions

spittingpink

Hi guys, newbie to the site!

I am 10 months into an IVA with PayPlan. My agreement was for £14400 (60 months at £240).

I am potentially facing redundancy and as such a family member has offered to clear my debt.

With a final settlement, do I just owe £14400 less the £2400 I have paid off? or do the creditors want interest on top of that?

Also, I know it is illegal for me to offer a pay off to my creditors whilst in an IVA, so is it possible to get out of the IVA (legally) and then offer to pay them? (I have heard that creditors will often accept a lot less than they are owed).

It is a weight off my shoulders being helped like this, but I don't want to take any more than I absolutely need from my family member, so what is the best way of doing this?

manzanilla

With a final settlement, do I just owe £14400 less the £2400 I have paid off? or do the creditors want interest on top of that?

A change in your IVA has to be voted on and approved by your creditors. But if you make it clear that the money is comming from your relative, not you - and assuming you haven't just received ££££££ as a redundancy payout, then an offer to pay off £14400 less £2400 is VERY VERY likely to be accepted.

Also, I know it is illegal for me to offer a pay off to my creditors whilst in an IVA, so is it possible to get out of the IVA (legally) and then offer to pay them?

You can default on your IVA. And then make F&F offers to your creditors. But they will then decide individually to accept or refuse these; the huge advantage of the IVA is that all creditors are bound by it.

Whether your creditors will accept a lot less will depend on your circumstances. If your are 57 and not in good health, then probably you wont find another job. If you are 35 then probably you will. If you have equity in your proparty, then creditors may refuse a very short settlement. If you are renting then they are more likely to accept.

spittingpink

the money is defo coming from a relative and if I do lose my job I wouldn't get a large redundancy maybe £4k if that.

I'm 31 and in good health but the job market where I live is really bad, very few jobs at mid range salary so I would have to probably take a pay cut to stay in work. I currently rent and have no other equity.

danieln_2

Worth asking the question, your ip should give you some guidance. I did a f&f this year from my employer following issues it has caused with my ex-wife...

I'm also 31 and now have no iva!

Good luck

debtfree2016

Hello danieln, was your F&F the full amount less already paid or was it less?

Anondebtadvisor

It should be for less what you have already paid, but if you have a change in circumstances which means that you can no longer pay what you originally agreed you can offer less. If you have already paid 10months you offer should be around £11,600 as a starting point.

techno1029

Do you own your property and if so is there any equity in it. If there is your F&F will be a little more complicated. If not and you word your letter correctly stating the reasons why your IVA may fail if you cannot secure further employment etc I would be making my initial offer at around the 10k mark. You will be surprised at some of the offers that have been accepted.
do a little more investigating on some of the F&F threads on here mate.
Good Luck.

spittingpink

I currently rent and have no other equity.

I called my IVA people (payplan) and they suggested £8k or £9k.

They said it would take 2-3 months if my offer was accepted and I would still have to make my monthly payments (at £240), but it it was declined it would be another 2 or 3 months to increase my offer.

now I dont know if I should risk £8k and it take 4-6 months to resolve if rejected or save my family member £1k. Or, do I play it safer at £9k?

Iva_failure

Hello I am new to this forum. Myself and my husband entered an IVA at the start of this year after struggling with unsecured debts for over 10 years. The situation had got so bad we were using credit cards to feed our family and two small children. My husband had a huge wage cut £3,500 per year a couple of months ago which has left us in a position where we cannot afford the £200 IVA payment. We have continued to pay borrowing enough to last us the month from our elderly parents but this month have no money left with two weeks until pay day. We just cannot go on like this anymore. I was wondering if we might be better off filing for bankruptcy we have around £10k equity in our property but we are frightened that this will be taken if property is forced sale and then we will have no-where to live. Please can someone provide any advice on this situation? I have contacted the IVA company and they are going to talk to me about a possible reduction but the thing is that after paying essentials like mortgage gas electricity council tax and food we have no disposable income left. What will happen

manzanilla

hi Iva Failure

sorry to hear your IVA isn't going well. Can I suggest that you start a new thread so more people will see it? On here click on http://forums.moneysavingexpert.com/forumdisplay.php?f=159 click on the blue 'new Thread' button at the top of the list of posts.

It would also help if you could post a Statement of Affairs as this will let people see the full picture. Use the calculator here: http://www.stoozing.com/calculator/soa.php

techno1029

spittingpink wrote: »

I currently rent and have no other equity.

I called my IVA people (payplan) and they suggested £8k or £9k.

They said it would take 2-3 months if my offer was accepted and I would still have to make my monthly payments (at £240), but it it was declined it would be another 2 or 3 months to increase my offer.

now I dont know if I should risk £8k and it take 4-6 months to resolve if rejected or save my family member £1k. Or, do I play it safer at £9k?

I wouldnt want to suggest going for the lower figure and it not getting accepted as I would feel quite awful but dont forget if you make the offer then continue paying for 2-3 months you will be adding at least another £700+ into it. If you word your settlement letter correctly stating the factors that your IVA could fail I am sure your creditors would look very favourably in receiveing a lump sum early especially as you have no property to worry about either. Dont forget to state the money you are receiving is a gift and not a loan and is only available for you to settle your IVA. Good luck.