finishing IVA early

[fionaj]

Hello
As you know my IVA was approved last monday. My debts were as follows:

alliance and leic - 830
citibank - 880
barclays - 16400
ge money - 130
cahoot - 5400
lloyds - 3000
egg - 6000
ikano - 290
northern rock - 4600
more than - 1800

I will be paying 499 a month = total 29,940. 9,120 of this is the IP fees.

My employee has suggested they may be able to offer me 18,000gbp on the condition this was used as full and final settlement and my iva finished early. I would obviously have to pay them back, probably at the same rate of 499 a month.

Do you think this would be accepted?

Thankyou

[MelanieGiles]

Hi fionaj

I assume you mean your employer do you?

It is a real shame that this was not thought about earlier - ie before you finalised your IVA proposal. Having just got an IVA accepted, neither your IP or the creditor are likely to be mindful to accept an early settlement at this stage. I suffest that you keep this up your sleeve and wait until at least the first anniversary, when you may stand some chance of acceptance.

Was your employer aware that you were proposing an IVA prior to it being submitted to your creditors?


The offer you mention will not return the dividend you have just offered, so you ought to have that target in mind for any early settlement. And you may also find that you are unable to propose a variation within the first two years, as this modification from creditors is becoming increasingly popular.

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

[fionaj]

yes i did mean my employer!

i didn't realise i could have made this sort of offer instead of an iva. I was under the impression I had to have an IVA approved before I could possibly make any offer. How should I have gone about that? Would I have still had to go through an IP?

Also I have just had a look at my modifications and there is nothing about no variations in the first year/two years.

I feel quite confused now - and not sure i have done the right thing with an IVA if there had been a chance a lump sum would have been accepted.

[MelanieGiles]

Hi fiona

I'm suprised that your IP did not give you this option - we always do in my practice, and it is suprising how many people actually propose lump-sum settlements through IVAs.

As you do not have the "no variations in 2 years" modification, this does leave the door open for you to make an offer, but I would have to say if I were your IP I would not be encouraging this at such as early stage, as your and his credibility may be brought into question. Also your offer gives a lower dividend, and there will not be a proportionate saving in IP fees.

My advice is to keep this up your sleeve for a year's time, where you will have made 12 monthly contributions and thus the offer will look more attractive.

What a great employer you have!

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