Full and final offer amount ?

in IVA & DRO
14 replies 2.8K views
Hi all

I was wondering if I could get some help ideally. I got myself into a financial pickle and managed to have an IVA accepted. I've recently told my parents about this and my dad has offered to pay an offer to close the IVA..

I'm now 9 months into my IVA having paid £215 each month not missing one.

The IVA was for £9,650.

10x £215
50x £150

I've so far paid £1,935.

I had an estate agents valuation manager out today who valued my property at 125k-130k which means it's gone up loads since I purchased it and the equity is definitely now over the 5k mark as I own a 25% share.

My mortgage statement shows I have £22,081 remaining. An exit fee of 199 bringing the total to redeem the mortgage at £22,280.

My IVA has 1 payment of 215 left then 50 payments of 150.. plus the equity clause. So 62 payments of 150. The dividend was 26p/ £.

What sort of an offer would you recommend to make that would have a good chance of being accepted?

Many thanks in advance,
«1

Replies

  • Is it a shared ownership with a housing association?
  • sourcratessourcrates Forumite, Board Guide
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    Hi,

    Your creditors will look at this purely from a monetary point of view.
    If they can get a better return from allowing the IVA to complete along with any equity release, then they will insist on that.

    You may find you have to offer the full amount outstanding by way of payments, and try to negotiate a figure to cover what the equity release would of been.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
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  • mwarbymwarby Forumite
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    Bear in mind they might also consider income increases/decreases over the term(the repayment isn't fixed) and also the change in available equity over the term. If they see no threat to income in short to medium term, they might want to let it run, and see if they get more.

    Of course the other way works too, better to get a certain value now, than maybe more in the future (you could have expenses up income down, and equity down)

    The normal starting point is number payments left x payment amount
  • Interesting. I thought the idea of the creditors receiving money now instead of waiting seems more attractive to them? And also that they'd save on cost. So I should offer the full iva amount rather than offer a bit Lower?
  • sourcratessourcrates Forumite, Board Guide
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    Interesting. I thought the idea of the creditors receiving money now instead of waiting seems more attractive to them? And also that they'd save on cost. So I should offer the full iva amount rather than offer a bit Lower?

    You need to be very careful here, as suddenly coming into a large amount of money will be classed as a "windfall", and your IP could take the lot.

    Get some advice from National Debtline about the approach you should make to your IP, you will need to be explicitly clear that the money is coming from a 3rd party, and you have no access to it, with no other issues regarding your income, you must offer a sum that means they will not be out of pocket by allowing the arrangement to run its course, see what ND recommend by way of an offer, but i very much doubt they will accept much less than what they can gain by allowing the IVA to complete.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • sourcratessourcrates Forumite, Board Guide
    24.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    Interesting. I thought the idea of the creditors receiving money now instead of waiting seems more attractive to them? And also that they'd save on cost. So I should offer the full iva amount rather than offer a bit Lower?

    The thing with an IVA is that it not only protects you legally, it also protects them.
    Now if you were to lose your job for instance, they may snap your hand off for a good settlement, but as you have no issues in that area, they may insist the IVA continues and yields them the full amount promised at the outset.

    It all depends on your individual situation you see.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • mwarbymwarby Forumite
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    sourcrates wrote: »
    You need to be very careful here, as suddenly coming into a large amount of money will be classed as a "windfall", and your IP could take the lot.

    Get some advice from National Debtline about the approach you should make to your IP, you will need to be explicitly clear that the money is coming from a 3rd party, and you have no access to it, with no other issues regarding your income, you must offer a sum that means they will not be out of pocket by allowing the arrangement to run its course, see what ND recommend by way of an offer, but i very much doubt they will accept much less than what they can gain by allowing the IVA to complete.

    I thought the OP was wanting to do what amounts to early equity release(selling/remortgaging own home), so funds would not be from 3rd party. The biggest issue here IMHO is that your basically offering the creditors something they already have
  • mwarbymwarby Forumite
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    Looking at first post the OP has around £30k of equity and £22k of mortgage, so if he sells he can get around £10k, which is about the same as payments left on IVA
  • sourcratessourcrates Forumite, Board Guide
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    mwarby wrote: »
    I thought the OP was wanting to do what amounts to early equity release(selling/remortgaging own home), so funds would not be from 3rd party. The biggest issue here IMHO is that your basically offering the creditors something they already have

    Sorry, slight confusion, in the opening post he states his dad wants to pay it off for him ?
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
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