Can I settle?

[johnmc]

I am half way through my 5 year IVA. I am finding the going tough but have kept up all repayments thus far. A close friend who has come into money has offered to stump up the cash to settle if I can reach an agreement with my creditors. How is this viewed. My friend will obviously not provide the cash unless it means the end of my IVA.

My original debts for unsecured loans and credit cards came to around £20k. They also included a student loan of £4k but the payments have continued to be taken from my wages despite numerous notifications to my IP. So is this now not included in the debt? I currently pay £365 a month. Would an offer of £8k be suitable to finish early. I think my agreement was 51p in the pound.

Any guidance is appreciated

[james_7]

Hi Johnmc,
My understanding to the key of getting an offer accepted early is that to offer say 2p in the pound more than what was origianlly proprosed, which is a sweetner to your creditors. Also you must make it perfectly clear that this money from your friend is to be paid back with your surplus money this way they cant expect you to pay monthly contributions aswell. If the money was given to you as a gift i beleive that an iva company would treat this as a windfall and expect you to keep up the contributions also. i think i am right but i am sure an expert will correct me if i am wrong. hope this is useful info
james

[johnmc]

Whilst it is a gift of sorts, the gift is being offered to pay the IVA and the IVA only. It is not say available to me as cash so that i could spend however i please. The only way that this money will be provided is on the understanding it ends my IVA.

Under no circumstances will this money go to any other use therefore cannot be classed as a windfall or gist really can it. Either it ends the IVA or it stays in my friends bank account

[MelanieGiles]

Hi johnmc

You will need to put your offer to your IP, but it does not look unreasonable to me. If the money is being given to you by way of an interest free loan, then your disposable income you are currently offering creditors may well be used to fund the loan repayments with your creditors approval.

And just to confirm that the Student Loan company are bound by the terms of your arrangement, so when your Supervisor does eventually effect a distribution to them this will be taken into account if they have not refunded the money by then. Get your Supervisor to chase this up as you must be struggling to maintain payments with that deduction coming straight out of your salary.



Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ivoriva]

As far as I know, this kind of arrangment can be done. I think the friend simply needs to write a letter confirming the funds will only be made available in full and final settlement of the IVA.

The IP will then call a meeting of the creditors and ask them to vote, much like they did originally.

I would think it has a good chance if the F&F offer is in the region of what was initially proposed. Did you have equity release clause in the original proposal as this may make a difference?

[johnmc]

Can anyone advise on the timescales of the process and what exactly happens. My view thus far is ring my IP, discuss what a fair offer may be, submit and await creditors response.

Is this the general way and how quick is it over? Will I ever be able to get a standard mortgage in a few years. Just applications always say ever been bankrupt or had a CCJ - I would always have to say yes wouldnt I.

Thinking way too far ahead I know, just interested in what life might be like out of an IVA!

[MelanieGiles]

John

Speak to your own Supervisor on this specifically. There is no set timescale, so this may vary from firm to firm, and you will certainly be able to get a standard mortgage in years to come, it will just take a little time to restore your credit rating.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk