Can I do an offer to my creditors a bit like an IVa?

psrlva

Hi, 
My husband has a lot of debt all business related, PG's that sort of thing. We have now sold our family home and I have bought him out of our rented property so he has all the cash he owns. Could he write to all of his creditors and offer them the same percentage each to settle all of his debts using all of this money? He is worried they wont accept but there is just nothing more. The percentage would only be about 45% but he would be treating them all fairly and leaving himself with nothing. It would sort of be like a lump sum iva but administered by ourselves. Anyone else done this?

MalMonroe

You could but why wouldn't you use the services of one of the free debt help agencies to help you? Creditors are more likely to agree if you have the backing of a recognised organisation. Stepchange or Citizens Advice or National Debtline. 

All phone calls are free and their advice is free, non-judgemental and knowledgeable. I used Stepchange - my circumstances were different to yours but they are very good at helping with all financial matters. You can try them for nothing. 

https://www.stepchange.org/

One of the agencies can advise the best way to use the cash - and you can either take that advice or do whatever you think best. But really, what have you go to lose - about half an hour on the phone? It's worth it. Or it may not be, it's up to you. But it seems a shame not to try.

sourcrates

Its called "full and final settlement", and is a well recognised way to clear, usually older debts that have been round the houses a few times, but its nothing like an IVA, although I get what you mean.

You can be successful with newer debts, but the process works much better when a debt has been sold on, and bought "second hand" by a debt purchasing company, who will have paid pennies in the pound for it, so can afford to accept a lower lump sum payment for quick settlement.

National Debtline have an excellent template letter just for this purpose, it can be found here -

Sample Letter - Settlement offer | Sample letter | National Debtline | National Debtline

And remember, its ok to negotiate over the phone, but any deal must be agreed in writing before parting with any money.

Because if you fail to do that, then the creditor, quite legally, can sell on the remainder of the debt, and you will have someone else chasing you for the remaining balances.

psrlva

Thank you both for your replies. I did initially go through Stepchange but their remedy was to go bankrupt because one of the debts was to a family member and they dont advise settlements when this is the case because it might cause family tension!
I think the company he owes the largest debt to ( A large well publicised business lender ) will also want him to pay the remainder on a monthly basis for the rest of his working life. But if we do that for them then again we should offer it to all the creditors which unless we were paying them token amounts we just could not afford.