Full & Final Settlement - how to work out offer

[RuMa]

Hi,

Can anyone advise me of how to work out what kind of offer to make in full and final settlement of our IVAs please? (There is a slim chance someone could help us do this if the figure is within his reach)

Here are the facts:

MY IVA

Set up initially to pay £100 per month. 26 payments made at that rate and 9 payments made at a reduced rate of £50.

HUSBAND'S IVA

Set up initially to pay £200 per month. 26 payments made at that rate and 9 payments made at a reduced rate of £100.

I have tried working it out so many times, but each time I come back with a different figure!

Is there a simple way to work it out?

Thank you.

[Gina.gu]

Hi, do you own your own home? The creditors will want as near to the original dividend as possible (how much you would have paid over the term of your iva)

[RuMa]

Our home is mortgaged and we are in (rather large) negative equity.

[Foggy]

Yours: Originally 60 months (?) at £100. So creditors expecting £6000. You have paid in £3050 ...... so an offer near £2950 is what is needed.

Hubbies: Originally 60 months (?) at £200. So creditors expecting £12000. You have paid in £6100 ...... so an offer near £5900 is what is needed.

Assuming you can get them to drop equity claims, which should be possible as it is in negative equity.

[Gina.gu]

Think foggy has answered that one for you. was asking about the mortgage for the same reason. Good luck with it

[RuMa]

Thanks for that Foggy - and that is one of the figures I came up with!

I have found out how I kept getting different figures though - although we thought it was £200 for 60 months for my husband, and £100 for 60 months for me, it's actually not. It seems to be a variable amount - not sure why, and neither of us recall understanding this before.

The 'Offer of Payment' states:

Monthly Contributions

Husband - 48 x £200; 1 x £175; 11 x 274.38

Me - 48 x £100; 1 x £75; 11 x 174.37

This will make it a much higher amount that they would want (unfortunately, probably making the offer impossible).

On these figures, I calculated they would want £6693 from my husband, and £3743 from me - is this correct?

Just a question - will that include Nominee/Supervisor fees? Only if we did settle early, would they be entitled to the full amount? The administration fees amount to approximately £5K in respect of my husband, and £3K in my case.

Thank you.

[luluj]

If you settle early your fees would be reduced somewhat !

[RuMa]

Thank you luluj, I thought they must have to reduce the fees if they don't need to supervise the IVA for the full term. But how do I know how much the final figure would be reduced by, so as I can work out around what sort of an offer we would have to make?

[kazzafunk]

I worked mine out by how many payments were left minus 15% fees. It came back from the IP almost the same but don't forget they charge £1000 for a variation meeting (not much really with all the work they have to do). That wasn't factored in with my calcs and so I am proposing slightly less than expected over the term.

However due to my ill health and retirement at 47 my IP isn't unduly worried about the offer being slightly less than originally afreed.

[Foggy]

The fees thing will depend upon how your IP's fee structure was agreed with the creditors. Some are on a time served basis, and will therefore reduce. Others are on a percentage of monies realised, so they will get 15% of the IVA income, whether it comes in monthly chunks or in one go!

[plasticdaft]

Dont worry about fee reductions etc,just try and table an offer somewhere near the original expected amount that creditors would get. If there are specific reasons why you need to conclude things early then offer a little less. Your IP really should be able to gide you in this process and that includes letting you know what creditors are likely to accept.

Paul

[RuMa]

Thanks for all your replies. Unfortunately, after all the working out it seems that F & F won't be possible after all. The amount we would have to pay is much more than we thought, and our good friend will not now (due to it being a much higher payment than we suggested to him) be able to help us.
Ah well, in 3 years it will all be over.