Settling an IVA early

Brummie123

My partner has an IVA (2.5 years old) from before we met, but her income has now increased (and should continue to do so) so she is having to pay more than the minimum £200 per month.

It may be better for us to try to settle the IVA early, and in previous threads I've been advised that we may be able to make the creditors an offer of less than the full debt as they may accept a guaranteed lump sum rather than the amount they would get through the reminder of the IVA.

We have contact the IVA company (Blair Endersby) who have written to us stating the following.

Contruibutions received to date: £6,176

Settlement figure of £7,100 would result in a return to the creditors of 27.78p in the £. This return is similar to what creditors were expecting under the terms of the arrangement.

Settlement figure of £26,700 would result in creditors being paid in full.

The end of the letter basically says they woudl have to convene a meeting of the creditors if we were offering a full and final settlement.

It's unrealisistic that we can settle the full amount, but may be able to pay something in between.

Firstly can anyone clarify exactly what the above means to us (why do they state the lower settlement amount if we have to settle in full?).

Also, can anyone recommend the best course of action. Obviously we're looking for the cheapest option and the least negative impact on our credit status.

Many thanks in advance

Paddywhack

I think you will find that the settlement figure of £7,100 is what the creditors are likely to accept if you were to offer a Full and Final settlement. The total figure of £26k is what the actual total debt was when you entered the IVA.
The creditors meeting is where they get a chance to vote on acceptance of your offer. As you have already paid in £6176 they are saying if you can raise another £1000 ish to get the total contributed to £7,100 then the creditors would be likely to accept, as this is all they would get if the IVA runs the full term. Worth a punt in my opinion.

Brummie123

Thank you. I think we will propose to settle on the basis of what would they were expecting to receive should it have ran it's course.

I spoke to the UK Insolvency helpline earlier today and they advised the same, i.e. that they should accept that amount.

Almost sounds to good to be true though, as can't believe it will be that straight forward to get out of.

Any other thoughts or opinions would be gratefully received.

infopremiere

Hi,

Im in an IVA and from my experience i think my debt managaement company or you guys may be making an error.

My father offered £7k to settle a £36k IVA and this was rejected out of hand!

My debt management company told me that the creditors look at the Initial total Debt -That is the £80k initially.

They would want at least 18p in the pound of this amount and not the £36k IVA amount that was agreed!

Therefore, I would require a lump sum of around £22.5k to come to a Full and Final settlement with the creditors .

Can someone who is proposing an IVA settlement or proposed one please clarify??

Thanks