How much should offer for a full and final settlement for IVA?

savingsavy

Hi, 

In IVA for just over 5 years. Now in extended time due to payment breaks. The last payment is due in August 2024. A family member has offered to pay for the rest of the IVA to finish it and save our worry and stress. We are not homeowners.
How much should I offer the IVA people if what's left is £900 to pay? 
Is there a particular form or template to do so?

Full story: 
My partner and I have a joint IVA with Credit Fix, our debts are around £17000. We have been in this for just over 5yrs which was the initial term. We took several payment breaks and now the IVA ends with the last payment in August 2024. We are not homeowners.

Our financial situation is not great but without the IVA we break even. Our situation has changed since the IVA, my partner is suffering from depression very badly, it is classed as a disability under the Equality Act and he has been on sick leave for over 1yr and following recent Occupational Health he is looking at several more months off work. We scraped and still managed to pay the £100 monthly IVA payments with the payment break when necessary. 

I am now made redundant and looking for work. With benefits and tightening our belts, we break even. A family member has offered to pay off the remaining amount for the IVA, which is £900. 

I have looked through the IVA paperwork and cannot see anything about paying it early. Looking through the forum here, I can see it is possible and called a 'full and final settlement'. 

Thank you for taking the time to read and help me out. 

jlfrs01

I think your best course of action is to speak with your Insolvency Practitioner to find out A: if you can settle early and B: if so, whether an offer is likely to be accepted and if so, how much. If you are not allowed to settle early, perhaps your family member could give you the money and you pay down the debt until it's fully cleared. 

sourcrates

Bad decision to take an IVA being non homeowners, but that boat has now sailed.

If you are not working, then save your family members money, and offer to settle the arrangement for payments made to date.

Don`t mess about with settlement offers, as the payments that remain outstanding will not be the actual balance currently owed, that would be what you would pay if the IVA ran it`s full term, according to the budget you gave them at the start.

If you attempt to settle early, your offer would have to be based on the full outstanding original debt, plus any remaining fee`s to be paid, there would be no write off as is the case currently, this is a common IVA mis-conception.

There is no form or template for this, tell your IVA company you are now out of work, (so make no more payments to this arrangement anyway), and ask them to convene a meeting of your creditors to discuss taking payments made to date in full and final settlement of your arrangement.

Even if they refuse, you cannot afford £100 a month on a benefit income for an IVA, so advice would be to let it fail, and deal with any outstanding amounts as and when it becomes necessary.

savingsavy

Thank you both for your advice. I agree, an IVA was not the right solution. Things were desperate and I did not do enough research for it. When I searched online Credit Fix came up and they appeared to be so helpful. Then there was the shame and the urgency of debt collectors and CCJs. The council were going to send bailiffs. We know better now and we are better at managing money.

A big chunk of the debts are for approx £2500 for council tax and approx £4000 for the HMRC. If the IVA fails they will become due and it will cost more than the remaining £900. So letting the IVA fail may not be the ideal option. Just 9 months short of getting to the end of that tunnel and after 5 years of it. 

I am going to take your advice and do our i&e which is due now. This will show we cannot afford the current payment then follow up with an email and a call to ask to settle for payments already made. I did not know that was an option, so thank you @sourcrates . 

Should this fail, I'll ask about settling for the remaining IVA payments. If this fails, then we'll just borrow the money and finish the monthly IVA payments. 

I'll keep this thread updated to help others. Thank you so much for your help. 

sourcrates

That makes sense given the circumstances.