IVA Full and Final Settlement Offer

Heidibag

Can anyone advise how i go about making a full and final settlement offer for an IVA?

I have 15 months left to pay at £373 a month. I would like to clear this as soon as possible and may be in a position to do so quite soon. However, i don't know if i make an offer or if the creditors tell me what they want paid to clear it. Can anyone explain the process please?

National_Debtline

Hi Heidibag,


You will need to check the terms and conditions of your IVA. A key issue may be, where has this lump sum come from? If you have had a win fall then it may be taken as part of the IVA regardless and then you may need to maintain your monthly payments as well.


If the money has come from a third party then you will need to, again, check the terms and conditions of the IVA and speak to your IVA provider. They may do a full and final offer with the creditors on your behalf but this will be influenced by many factors - such as, can you afford to carry on with the payments (is something changing that will make them unaffordable), do you have a property - is an equity release clause pending, how much is the settlement compared to the remaining payments etc.


Laura
@natdebtline

Stevie_Palimo

Thinking on the above post I would be inclined to leave it running its natural course so that you do not run the risk of upset and further charges.

NotEvanAPot

Agree with above, if you've suddenly got £5.5k free to spend, they're likely to ask lots of questions, grab what they can and expect continued payments.

Keep quiet, 15 months is nothing in the grand scheme of things.

Heidibag

Many thanks for your help.
Basically i have a final salary pension that my employer wants to close. They want to offer a cash lump sum for employees to come out of this pension and either transfer into their new pension or keep it and do what we want with it. Ive checked my terms in my IVA but can only find information regarding windfall, inheritance or assets that must be paid towards the IVA. I would like to take the lump sum and offer a settlement offer to the creditors (or keep it and continue with monthly payment). I've got one year left to pay and i am managing it as ive got no choice but would like rid of it.
Alos, if i dont declare it and the IP finds out then i am in breach of the agreement.

memberme

All the others are correct.

remember a !!!!!! figure is not nessessarily calculated at 15x373 or there abouts. Although this can happen, and often they would prefer to have their money earlier, but they may ask for a higher %age than you're paying. No guarranttees.

As for your example......They are very likely to say it's a windfall and grab it anyway with continued paymnets, unless the amount you're getting clears the debt

National_Debtline

Hello again,


You need to be really careful here. If you took the lump sum and paid into the new pension scheme, it may not be considered a windfall but if you took the lump sum and kept it, I would say it would almost certainly be classed as a windfall. Realistically you may want some financial advice about what is the most financially viable option for you.


If you took the money, how much might you have to pay into the IVA? It could be considerably more than your remaining 15 instalments. What would be the long term benefits and drawbacks of using the new pension scheme?


I hope you get it all sorted, just remember, as you already seem to know, that failure to declare this information can result in a breach of the IVA and it failing which has its own consequences I am afraid.


Laura
@natdebtline

sourcrates

When you took out your IVA you would of been advised that you will make so many payments, after which your remaining debts will be written off.

Now if you suddenly come into money, not withstanding the windfall clause, you would be expected to repay your entire original debt, or as much of it as possible, basically you would lose that money either to the wind fall clause or the full pot.

I'd leave well alone if it was me, let it complete, and be done with it.

Heidibag

Many thanks for the advice.

I did contact my agency who deal with this on my behalf. Whilst they have informed me that they cannot advise me what to do, it is possible to make an offer. They advised to wait and see what the cash lump sum is being offered and then to contact them. The new terms of the pension are not favourable and the company that i work for have being trying to get rid of it for years. So i doubt that it will be available when i finally take retirement.

adyj73

Personally I'd ask them to make the pension payment straight into another pension without coming to you direct. I'd hate to think 5 grand was swallowed up in an IVA when it could be earning money in a pension fund. I'm surprised they are paying it to you as I thought their were rules on pension provision that if one closed the fund was automatically moved to a new provider as I thought you weren't allowed to get it to stop people spending all their pension money ahead of retirement (happy to be corrected of course)