Lump sum IVA..how much?

Pennypanj

Hi I have read about lump sum IVAs ( the ones where you pay a lump sum at the beginning then have monthly payments for around a year) but need to know how much of an upfront lump sum is deemed reasonable. Is there a guideline percentage based on your outstanding debt amount? I.e I have 55k debt and I currently have a 20k lump sum ...would this be likely to be accepted or do I need more? Also, I have some equity in the house but got refused extra borrowing on it (to clear my debts) due to affordability...would the IVA need me to still release that equity somehow. I do not want to sell the house.
Many thanks 🤔

sourcrates

Hi,

I was going to move your post to the IVA board, but to be honest, the traffic on that board is not great, so i think its best leaving it here.
I can help you some of the way with this, lump sum IVA`s are quite rare, and they only really work if you have a really good reason why the creditors should accept a lump sum, instead of traditional monthly payments, as they may realise a better return using the normal route, so for example, if you were ill, and unable to work, or you have just been made redundant and future work is looking a long way off, or you had some other good reason why they should accept the offer, it is likely they will reject the proposal.

There are some exceptions to this, if the lump sum is pretty close to the amount you owe, they may vote to accept it, the people that make these decisions have to do so on the basis of obtaining the best possible return for their client you see, its all about the numbers, if you present a good case why they should accept less than what they could recover over time, then they will accept it, if you can`t, they won`t.

I am unsure if an equity clause would apply to a lump sum IVA, they do apply in a normal IVA, if you are a homeowner, also it is getting more common now to be asked to take out a secured loan in year 5 to end the IVA, you need to get some good, independent advice, from someone who is not interested in selling you anything, National Debtline would be my choice (be careful using Google, as many shyster companies pop up using similar names to National Debtline) they will give you free, and very impartial advice on your options, pro`s/con`s etc.

Good luck with it.