Full and final settlement letter help

[Bigdebts]

Hi Guys, I’m now over 3 yrs into my IVA and I have a glimmer of hope to end it early as my Boss has offered be a lump sum to get it cleared off on the basis that it removes any liability from me. The sum covers all remaining Iva payments and a small amount extra.

I spoke to Payplan who will arrange the meeting with creditors however my Boss needs to send them the offer on email first.
Does anyone have a template for a full and final settlement letter that ensures all liability are removed including any equity clause once this amount is paid ??
I don’t want them taking the money then hitting me something else so need it watertight that il be debt and liability free .

Thanks in advance

[Foggy]

Once the offer is agreed and the payment made the IVA will close in the usual way, as if you had made all agreed payments, until then --- the issue of the completion certificate, you will remain liable, as do we all, to the requirements of the IVA except those relating to the regular payments and equity release (more on this in a moment). So, if you won the lottery before the IVA is formally completed by the issue of the completion notice, you would have to pay the winnings into the IVA. Also, even after formal completion the IVA trust will remain and things like PPI, in the future, is still due to the IVA. A F&F will not alter this.

On equity -- you say your offer covers "all remaining Iva payments and a small amount extra" .... does this include an extra 12 payments in lieu of equity release? This could affect the wording of your offer, if you are wanting to attempt to relinquish the need for equity release to be addressed. If equity release is ignored creditors might reject an offer and hold out to see what they might get on top of remaining payments.

[Bigdebts]

Yes if the f and f payment is made then any equity clause will need to be included and closed once payment is made. The amount I can offer is the maximum I have been offered. It covers all payments till the end of the IVA plus maybe 3 of the additional 12 months. At the end ( equity clause ) but as it’s all I can borrow then not much I can do about that.

Can you elaborate on the IVA trust bit ?
How long does this carry on for as I was hoping a f and f payment and a completion certificate gets rid of everything ??

[Foggy]

Under previous legislation it was ruled that a trust is created by the IVA, which survives after completion. It is this trust which empowers an Insolvency Practitioner to deal with the business of the IVA after it has been formally completed and the IP has, for all intents and purposes, relinquished his role as Supervisor.

More recent cases have ruled that refunds like PPI are still due to the IVA, via the trust, after completion, on the grounds that they existed during the IVA, albeit not known about at the time. The same argument would apply if you discovered, well after completion, that a rich relative had died prior to or during the IVA, leaving you a bequest. This bequest would also be due to the IVA trust. In theory, this lasts in perpetuity, in practice IPs are only required to keep records for 6 years after completion and, so, would be unable to distribute anything after the records had been destroyed.

[Bigdebts]

Also pls can you advise if there is a way to remove this trust after the completion is over ?? I just want it all over and done with to be honest and no ties anymore once it’s paid off

[Bigdebts]

Ok I understand now so thanks - is there anywhere I can see a thorough f&f settlement letter that my boss can send that ensures his payment covers everything like equity etc

[Foggy]

There is the standard template here: https://www.iva.co.uk/letter6-f-and-f-offer-during-iva

I would suggest adding something along the lines that the money is for the purposes of a full anf final offer only and, should the offer be rejected, will no longer be made available by the donor.

As regards equity, maybe amend the template here: "This offer is made on the clear understanding that, if accepted, all the debts would be settled in full and we would be released from any liability including, but not limited to, any liability or requirement to release equity. "

There is, of course, the worry that this would bring the equity potential to creditors minds --- which might be why it was never mentioned in the original template, being usually addressed by the addition of the 12 month extension in lieu.