Full and final iva

Starry1981

Hi, me and my partner are thinking of doing a full and final on our iva as due to a drop in money coming in from my child tax credit which will be happening very soon we won't be able to meet my half of the iva as my partner then has to take on the living expenses I used to pay. My dad has offers us £5000 to do the full and final on a balance of £7500.......

Do you think this will be a good offer and will be accepted as otherwise we will end up failing our iva if not accepted which we don't want to do but if we don't have enough money to pay our iva then that's the obvious thing that's going happen

We only started August/sept 2015 and I've had a ppi claim of £2098 go into the pot so hoping that may help our case too

National_Debtline

Hi

It sounds like a decent offer to me. Your IP will have a better idea of what creditors are likely to accept so discuss it with them. What sort of percentage were your creditors due to receive under your existing IVA proposal?

James
@natdebtline

Starry1981

Hi thank you for your reply

One is 19p the other is 18p but I'm not sure if that was meant to change as 1 creditor each wanted us to pay an extra £5 each a month so that's an extra £600 overall.....I'm not clued up about the dividend end part tbh.

Thanks
Starry

National_Debtline

There will probably be some additional IP fees for arranging a new lump sum proposal, but as long as the creditors are getting a similar percentage or more through the lump sum it seems viable.

James
@natdebtline

Starry1981

Oh right ok aperture didn't mention that to me (I was with cleardebt so still on their terms and conditions) how is that paid ? Is it taken out of the lump sum or all the money that has been put into pot?

Thanks
Kerry

National_Debtline

I'm just assuming there would be more fees as there would be more work for Aperture in making the revised proposal to your creditors. Only they can answer that really so it's best to clarify any details with them.

James
@natdebtline

mwarby

Starry1981 wrote: »

Oh right ok aperture didn't mention that to me (I was with cleardebt so still on their terms and conditions) how is that paid ? Is it taken out of the lump sum or all the money that has been put into pot?

Thanks
Kerry

perhaps worth checking with the IP that their fee is only payable on the creditors accepting the proposal and wouldn't cost you more if declined.

I'd say the creditors would be happy as long as they get about as much as they'd get without the full and final, taking into account your change of circumstances and reduced disposable income.The initial figure is just a guide some end up paying more some less

As long as proposal altogether is accepted i wouldn't worry to much about the fees, only people who gain or lose are your IP and creditors, the outcome for you would be same.

Starry1981

Hi thanks all for replying

Aperture variations team sent me an email today and from what I'm taking from it is we basically have to have a good enough reason for them to accept even to pitch our f&f to the creditors unless it's 100p/£ obviously we can't afford that due our changing circumstances and tbh I don't feel they can really say that, they want to see our i&e form to make that descision themselves but we wouldn't even have thought about involving my dad for an f&f as a gift if we knew would be able to carry on as that's just not us we've always paid our debts even if we've struggled through the years and I've gone without food.

Our debt within the iva together was around £9800 we've paid £2054 to date with another 2-3 payments that's another £300-£450 off the balance with hopefully a £5000 gifted f&f plus the extra ppi that has gone into pot of £2098 so with the extra ppi they would be gettin more as if I had not of had any ppi then they wouldn't be getting as much back, we feel we've done our best and if it wasn't for one of my creditors not listening to me and going straight to debt collectors we would never have needed to enter into an iva as I was paying a little each week to them and never knew they wasn't happy with it even when I sent in our i&e to them it was my council but they wouldn't have anything to do with me and the debt company wldnt listen to me and threatened to take 45% of my tax credits at the time I knew it was illegal as spoke to Hmrc but it didn't stop them threatening me and trying to make me pay ridiculous amounts each week which was how we ended up in the iva sometimes I get angry about it as we was coping and now back to square one basically which all this is giving me sleepless nights yet again.

Thank you for all your help 4 people from aperture have said we have good grounds to put an f&f forward before I received this email unfortunately we've not spoken to our actual ip I'm guessing he's an elusive guy as when we was with cleardebt we had our ip's direct number

mwarby

Sounds to me like aperture are saying they don't want to submit a variation which is unlikely to be accepted by the creditors, probably due to the cost of doing so

It's not clear how you've presented your case to aperture, but I'd think they'd need to clearly be able to see
-your current I&E
-the change of circumstances
-your I&E after the change
-the offer, which should be around months left x disposable income after change

The important thing for IP is to maximize the return for creditors while allowing you to have a normal life. The important thing is not PPI or even the size of the original debts but, getting the best return

The one big thing the full and final has going for it is certainty, once the full and final goes through, the creditors can draw a line under everything, the iva continuing as normal risks later default(as you could lose your job, or similar and be unable to pay)

The big thing is that your offer should be around as good as the creditors can expect to get over the remaining life of the IVA, if they think they can expect 10k (if the expectation is wrong, or likely to chang ty need to be shown), over next 2 years but you offer only 5k they are unlikely to be interested (and you IP won't be interested in putting forward an offer the creditors won't be interested n)

Starry1981

We've not actually presented them with our full as of yet we were just gathering info for is and my dad who gifting us the money and we've not actually spoken to our ip as of yet either as we came from cleardebt we couldn't remember who it was and no one said they would pass the phone call onto him either but now we know who is my partner is going to try and speak to him the email was from the variations team who we are not spoken to either so they don't know our circumstances at the moment.

We will be sending our I&e form to them when I 100% know where we stand financially due to our tax credits reduction but my Iva was basically based on my tax credits basically so know a reduction will not help us in our monthly income as then the household bills fall on my partner alone as he works full time and with 2 kids it's not gonna easy

Basically from my guessing calculations we will not be able to afford to pay the Iva so it's accept the f&f or we fail the Iva or they make us bankrupt which they then get nothing and we don't want to go bankrupt, a few ips from other companies have said an Iva was really not for us and should of been offered something else due to low income together and the fact it wasn't taken into account about changing tax credits every year I'm not sure if all this is true but we don't feel that an Iva was probably right for us as we wanted to pay the full 5 years but not even a year in and we're coming across difficulties ��

By the time we submit out f&f and all sorted with those payments whilst they are doing there thing there will only be about £7000 remaining to pay in the Iva and my dads only said he will gift us £5000 to get us out of the situation

mwarby

Starry1981 wrote: »

Basically from my guessing calculations we will not be able to afford to pay the Iva so it's accept the f&f or we fail the Iva or they make us bankrupt which they then get nothing and we don't want to go bankrupt, a few ips from other companies have said an Iva was really not for us and should of been offered something else due to low income together and the fact it wasn't taken into account about changing tax credits every year I'm not sure if all this is true but we don't feel that an Iva was probably right for us as we wanted to pay the full 5 years but not even a year in and we're coming across difficulties ��

By the time we submit out f&f and all sorted with those payments whilst they are doing there thing there will only be about £7000 remaining to pay in the Iva and my dads only said he will gift us £5000 to get us out of the situation

For clarity when you say 'we will not be able to afford to pay the Iva' do you mean you will have no disposable income at all, or you won't be able to pay the £7k.

If the first bankruptcy may be a good option, if latter it may not be quite as big of a problem

If the latter then the £7k is (i'd think) an estimate of what the IP expects to collect over life of IVA, this can go up or down as circumstances change (although if they change massively the IVA may fail)

The PPI makes very little difference, if you where aiming for 100p in £ it makes a difference (which doesn't sound viable in your case at the moment, unless the £7k is original debts). The reason being is that the creditors already have the right to this money (so it won't sweeten or take away from any new offer)