Ending IVA early

pulman69

Potentially facing redundancy very soon and well into IVA, would rather settle the IVA than extend it further and dont want to put it on hold. How would the offer of using all my redundancy monies to settle the IVA early sit with creditors and would they be willing to take potentially 75% of the outstanding balance based on what could be a rather precarious situation if I dont obtain new employment. Current outstanding balance would be £20k.

MrFrugalFever

This is a question you’ll need to propose to your IP, however, a redundancy payment is normally classed as a windfall and therefore will be party to the clause I.e most will need to be paid in to the agreement, which won’t change your monthly payments or improve your situation. The standard process (from memory) is that you can keep up to 6 months worth of redundancy payments which is to enable you to continue to seek employment and not be in financial hardship, there is also the option of a payment holiday period Of up to 9 months with most arrangements. 

You will need to read your IVA contract and consult your IP to understand whether it can be considered a F&F settlement, however, when I did my F&F offer, at the creditors variation meeting they would only accept an offer which was basically all of the current monthly payments remaining which at the time was 19 x £413 to reach a specific dividend yield. 

pulman69

Our offer of 75% of outstanding balance from another party was accepted by all creditors (that’s before the 6th year was factored in) so a very pleasing outcome. The current financial plight may have influenced this decision the alternative would have been a request for a permanent reduction based on the increase in living costs.

So IVA complete in just short of 3 years.