Full and final settlement or IVA?

[Deleted User]

Hi there, first post but I have lurked for a little while. I am after some advice in the best way to move forward with my current situation.

I have unsecured debts of approx 29.5k, I'm currently on a DMP paying in £90 a month. So I should be debt free just after the next ice age.

I have within the last year lost my career due to mental ill health. I am working, but my income has gone down around 20k a year and as as my DMP suggests my surplus income is about £90 a month.

As part of my dismissal I am due to be paid compensation. After clearing some debt with friends and family not in the DMP I will be left with 15k ish.

I'm currently a single father, and my daughter lives with me full time. However her mother and I are going to be moving to a joint custody arrangement in the next few weeks. In order for this to be viable for her, I have had to transfer the child benifit and relinquish my child tax credits so the ex can claim Housing benefit and drop to 16 hours so she can do the school runs etc.

So I will be about £320 a month worse off, obviously meaning I don't have a surplus anymore. Fourtunatly my budget was quite generous for shopping allowance etc as there was two of us, so I'm confident I can live within my means and keep up the £90 payment. Just.

My question is, do I attempt to make full and final offers based on the amount of compensation money I have? Would a one off IVA be a realistic option?

My DMP is going smoothly at the moment, all my creditors have frozen the interest and no one is contacting me. I am reluctant to speak to the DMP company, or creditors about my compensation because I think they would become more aggressive in their recovery tactics.

This isn't about trying to keep the money and not pay my debts, this is about trying to get it right and use that money to be debt free. It really is a one time thing, I have no other way of getting money, my income is likely to remain low for the foreseeable future. I won't be able to get back into my old profession and my mental health is very unstable at times.

Would it be possible to say that family are offering to make the payments, so if any full and final offers were rejected they wouldn't assume I have the cash in the bank and go after me through the courts? However I'd imagine there would be some scrutiny about the origin of the money? Is there a way around this?

Sorry for the war and peace post, I'm just sick of this hanging around my neck and want it sorted, but don't want to rush into anything. Any advice would be greatly appreciated.

DorisTrousers

A single premium IVA, as a general rule, is almost always accepted, and is almost always a cheaper way of clearing it than by negotiating directly with creditors.

Of course, there are exceptions to every rule so be aware of that. If there is good reason, although creditors would want the lump sum in full in an ideal world, then it may also be possible to "exempt" some of the money from the offer, so it isn't necessarily the case that you would have to relinquish all of it.

Feel free to PM me if you need any more assistance, although the good folk on here are always happy to help as well.