IVA Offer help pls

simpywimpy

My friend had an IVA set up 2yrs ago and has been paying £400 per month without fail since. (10k now paid I believe)

Due to a change in income, he now has no disposible income to pay and DFD have asked if he can make an offer.

There is 25k left to pay from 35k original debt.

What shall we offer that they are likely to accept? He has no savings or equity in his house but Im willing to cover the offer as long as it's not too much.

Thanks in advance

Anondebtadvisor

If he has a change in income do you know what he can afford to pay every month

for example if he can afford to pay £80 per month x 36 months remaining = £2880 - i would offer £3100.

simpywimpy

He has nothing left after paying his allowable expenses now so I guess the IVA would fail if he couldnt come up with an offer

Anondebtadvisor

Yeah probably - unless his IP asks creditors to accept payments made to date.

If he cant afford any payments, can he come up with £2000 from a 3rd party by way of an offer?

Anything is likely to be attractive to creditors in the current circumstances

simpywimpy

If we made a low offer of say £700 and they said no, could we then up it slightly? Are you allowed to do that?

Max_Maxwell

I recommend you offer as much as possible. I appreciate you are covering the cost for your friend but when you consider an offer of £700 against a debt of £25k, it doesn't sound very attractive.

An offer should be the best that can be made. If your first offer is refused and you go back with a higher one, the creditors will feel the proposal isn't sincere. They aren't market traders and don't readily warm to the art of haggling.

simpywimpy

Thanks for your replies. I think £700 is the highest I want to go. Will they take into account that he has no disposible income and has already paid off 10k when his position was better?

Anondebtadvisor

I would offer whatever you can afford along with the monies that has been paid across to date or ask the IP to accept payments made to date.

Have a chat with the IP and ask them to call a meeting, based on these figures the IVA will return about 20p in the £ to creditors (depending what their fees are) maybe a litte less - but still a healthy return

simpywimpy

Spoke to DFD tonight and made an offer but the advisor told us my friend has a 6 month payment break built into his agreement and the creditors will expect them to use that first to see if his situation improves. Once that has passed, he has to call back and they will then approach creditors to see if they will accept payments to date as a settlement.

sourcrates

Hi,
I was in similar circumstances earlier this year, my income dropped due to my marriage ending. My debt was £35k, I had paid in £16k, the IP had taken about £9k of this in fees and charges, so only around £7k was left in the pot, I too had 6 month payment break, after this my IP went for payments made to date as full and final settlement, my creditors accepted the offer, I had no spare cash or any assets to offer them, and the only alternative left open to them was bankruptcy, again, this would have cost them more money for no financial gain, as I had no assets, its a no brainer really when you look at it like that, the full and final was there only option, and that's what they did.

simpywimpy

Finally we have had a response from DFD.

Following a 6 month break then sending all the financial statements on income / expenses in, the have now asked for an extended length of osyments and £103 monthly. This has been agreed by the court we are told.

Income has dropped however by £900 a month which they know. Previous payments were £400 a month. This placed my friend into a negative income figure so how can they expect £103pm.

What's the best way forward?