Keeping money from windfall

Duncs1989

I am currently in an IVA and have been for 18 months paying £425 a month. The original debt stood at about 40k but I have just sold my house which I received 44k from and now they are wanting 37k to settle and complete my IVA. Do I have to do this as losing all that money in 1 go is not really the option I would like to take but is there anything else I can do or another way round it?

fatbelly

That's what you signed up for. It's difficult to find a way around it now that you have the cash. 

The 37k will be what is required to pay the creditors in full and the IP fees.

From what you say, you will not lose all the money as you will be left with 7k

Duncs1989

What happens if I don't pay and fail the IVA could I potentially go direct to the creditors and pay less? What would you recommend in my position? 

fatbelly

That would have been a better plan, earlier, though I note you have only been in the IVA 18 months.

There are very few failed IVAs where the IP petitions for bankruptcy. I once asked an IP who works for one of the larger companies how often he did it and he said 'four or five times a year'

But you can see how yours might be one of those cases.

Let's see what some of the other regulars think

sourcrates

Well your cover is blown now they know about the house sale.

If you had kept quiet, allowed the IVA to fail, then once the dust had settled, made full and final offers on your debts, that would have been my choice, as it stands, they know you have the money, so could very well petition for your bankruptcy if you do not comply.

It is what it is now, but perhaps advice should have been sort sooner on this one.

User_101122

I don’t see the problem here tbh. You’re in an IVA and have the means to settle it in full and become debt free.

Am I missing something here?

sourcrates

User_101122 said:

I don’t see the problem here tbh. You’re in an IVA and have the means to settle it in full and become debt free.

Am I missing something here?

Been debt free would be beneficial in many ways for the OP, but when you have a large sum of money, its quite hard to just hand most of it over to faceless creditors.

Had they followed the advised route, the OP may have been able to settle their debts for around half of what was originally owed, so would have had the same debt free outcome, but would have had in excess of 25k still sat in their bank account. 

fatbelly

The op probably read the headline 'write off 80% of your debt' and now realises that the very small print said 'you may end up paying 100% of your debt, plus our inflated fees'

User_101122

sourcrates said:

User_101122 said:

I don’t see the problem here tbh. You’re in an IVA and have the means to settle it in full and become debt free.

Am I missing something here?

Been debt free would be beneficial in many ways for the OP, but when you have a large sum of money, its quite hard to just hand most of it over to faceless creditors.

Had they followed the advised route, the OP may have been able to settle their debts for around half of what was originally owed, so would have had the same debt free outcome, but would have had in excess of 25k still sat in their bank account. 

It really isn’t hard at all he has 44k cash and 37k debt.  That leaves him with 7k left once the debt is settled.

Pay them and move with your life is the right and responsible advice here.  The OP is insolvent he has therefore ceded control of his assets to his insolvency practitioner, the cash from the sale of the house isn’t the OPs money, it belongs to his creditors no matter how “faceless” they are.

Sonic101

 can understand the frustration at having to handover 37k out of 44k but I agree with User_101122, above.

Beggars can’t be choosers; at the end of the day they are your debts, they will be wiped out, you’ll be debt-free and you’ll still have 7k in the bank - better than a kick in the teeth.

You’re only 18 months into the IVA, so would have had at least another 3.5 years of it, but instead it’ll be over and done with - a pretty good thing IMO.

Why not just pay up and put a portion of what you’d have been paying into the IVA into savings for the next 3.5 years? Say you were to pay £300 a month that would amount to roughly £12.6 - plus 7k = 19.6 k. Okay so it’s less than half of 44k but still not to be sneezed at…

sourcrates

User_101122 said:

sourcrates said:

User_101122 said:

I don’t see the problem here tbh. You’re in an IVA and have the means to settle it in full and become debt free.

Am I missing something here?

Been debt free would be beneficial in many ways for the OP, but when you have a large sum of money, its quite hard to just hand most of it over to faceless creditors.

Had they followed the advised route, the OP may have been able to settle their debts for around half of what was originally owed, so would have had the same debt free outcome, but would have had in excess of 25k still sat in their bank account. 

It really isn’t hard at all he has 44k cash and 37k debt.  That leaves him with 7k left once the debt is settled.

Pay them and move with your life is the right and responsible advice here.  The OP is insolvent he has therefore ceded control of his assets to his insolvency practitioner, the cash from the sale of the house isn’t the OPs money, it belongs to his creditors no matter how “faceless” they are.

I`m simply playing devils advocate here, not making judgement one way or the other.

There are ways and means of doing things, some work to your advantage, some don`t.
Where money and debt is concerned, its best all round to leave your moral code book at the front door.

If the IVA had failed, he would no longer be bound by its terms and conditions, and would be free to seek the best possible outcome for himself, I`m just pointing out that fact, no doubt the OP has now accepted his fate, and is looking forward to his debt free life, albeit slightly worse off than he could have been.