Early repayment

[l_d]

What happens if i was to pay my oustanding iva of in full? Ive had an iva now for a year and half if i was to pay off early would it be the full amount i was in debt by less what ive paid or 75% of the debt less what ive paid im not to sure how it works if i repay early?

[iva_squirrel]

Good evening,


A Full and Final settlement IVA is a legally binding arrangement with your creditors, which allows you to repay a proportion of your debt in a one off lump sum payment. Normally the lump sum is raised by remortgaging your property or introducing a lump sum from relatives.

This is an ideal solution for individuals who are able to raise a sum of money, but after providing for their reasonable costs of living including their increased mortgage payment, do not have any surplus income.
Creditors are likely to accept your full and final settlement if we can demonstrate that this offers a better return than bankruptcy.

I suggest you discuss the amount you are planning to offer with your Supervisor.


Kind regards,


Julia


For more information about IVAs, please visit my website:
www.supersonicsquirrel.net

[Oliver]

As IVAs are individual in nature this would all depend on your personal circumstances so it's best to discuss this with your IP.

Generally your creditors will want you to pay as much as you can. However, the exception to the rule is that on some occasions your creditors will be willing to take a reduced overall amount in exchange for receiving a lump sum of money from you.

An example of this would be a person who owes £40,000 and had a D/I (Disposable Income) of £300 and a property which has releasable equity of £18,000.

The creditors would get the most money by asking for 60 monthly payments of £300 (£18,000) plus an equity release in year 5 (£18,000), which equals a total IVA contribution of £36,000.

However in some instances the creditors may accept that this person makes a Full and Final payment of the £18,000 (equity) to "open and close" the IVA. The person would then complete their IVA as they would no longer have any D/I as this would now be reapportioned to paying for the aforementioned equity release.

How are you planning to pay a lump sum to your creditors?




Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp