How much lump sum to end IVA

Hi all,

First time posting so apologise if I’m not up to speed with etiquette but looking for some advice.

Basically, I have been in an IVA for two years which is reasonably well managed (payments up to date etc). Mental health and single parenting role led to original debt and I am now living within my means etc.

I am in a relationship which has started since the IVA. My partner knows about it and is supportive. We would like to live together eventually and my Case Officer suggested a lump sum and my partner is considering doing this but CO can’t advise about how much this would need to be for creditors to accept.

We are just wondering if anyone else has any experience of this so we can consider whether it is viable for him to do it.

I think I would pay approx another £3500 if IVA would continue to end. Would they expect this? Or would they expect more? Or accept a partial settlement?

Any advice greatly appreciated.

DG1979

Comments

  • sourcrates
    sourcrates Posts: 28,711
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    edited 19 January 2020 at 5:22PM
    Hi,

    Best to pose the same question just the once, then you don`t get multiple answers in different places, for the same thread.

    You usually need a good reason why the creditors should accept a settlement offer, such as you are losing your job, or you are ill and your income is decreasing, or some other reason why they should accept it, because otherwise they will just want to wait out the arrangement and get what they were originally promised.

    If you don`t have a good reason, and just want to end the IVA as quickly as possible, then the offer you make would have to be in excess of, or equal too, what the creditors would normally expect to get, should the arrangement reach its full term (inc fee`s).
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Ah right ok, I didn’t think it was an option, it was my Case Officer who suggested it as a possibility but didn’t say anything about needing a good rationale for why. She appeared to suggest it was commonplace but maybe I have misunderstood. Thanks for the reply
  • debtgeek1979 - typically what is needed to reach the original amount expected is a good figure to go from. Your IVA company can't tell you exactly as it is all down to the creditors. However that is a good guide - a little bit more would be more of an incentive to accept.

    Your reason can be what you have put - you are in a new relationship and would like the ability to move forward with this relationship without the stress of the IVA. Your partner can see the pressure and worry it puts you under so has offered a gift of £x available only if it enables your IVA to complete. The worst that can happen is that the creditors say no and things continue as normal. The best is they say yes!
  • Thank you so much for all your advice. I don’t think we are going to be able to offer as much as the life term of the IVA would yield as it is at present. There is a chance my payments will be reduced at my next review due to some changes in household income so actually what we would offer them would probably be more longer term but I doubt they will see the logic in that. Was worth exploring though x
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