How much lump sum to end IVA

Debtgeek1979

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

sourcrates

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).

Debtgeek1979

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

PrettyKittyKat

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!

Debtgeek1979

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