Full & Final Settlement

[discojen]

Hello all

Just wanted to ask for some advice about paying off my IVA. There is a strong possibility that a family member can lend me the money to pay off the remainder of my IVA. I have paid three years worth already.

I have spoken to my IP and been told that my next step is to write a letter offering a F & F settlement. How does this work? If I say I can pay the remainder, and the creditors don't agree to the settlement, can they just take the offer money? Would I be made to pay more per month? I don't want to do anything to mess up my situation. Do I still have to keep paying my monthly payment while they are sorting out my offer? I believe it can take a few months to go through (if agreed).

Also, my IP told me that in some cases a person has offered the full amount and it was not accepted, and other people offer less and they get accepted. I am a bit confused about it all - any help gratefully received!

Thanks!

[Lisa2009]

Make an offer as close to the original agreed dividend as you can.
You can knock off the supervisors fees for the time you wont need to pay them if its accepted.
If they refuse you can always try to increase the offer.

Remember to state that the money will only be available to you IF the settlement is agreed and that you would be then required to pay the family member back.

[MelanieGiles]

Would love to know what case your IP put forward which was rejected for payment in full! I've being doing this sort of work now for a lot of years, and have never had a variation turned down. Maybe I am just lucky!

[jpj]

Hi Discojen

You need to write the letter to your IP (not your creditors)
I would push your IP for a full and final offer figure (as opposed to trying to work it out yourself!)
You do have to keep paying your monthly contributions until the F+F is agreed,but dont forget that every months worth is still counted against the figure (so if you agree £15k offer and pay £1k in the meantime,you only owe £14k)
It may take several months for an offer to be put together by your IP.

Good Luck!

[Adam Davies]

Hi
If you post details of payments made,dividend proposed and time left to run on your IVA I can work out a guide figure for you
Regards

[discojen]

Thanks everyone for your help so far.

This is my current situation. I owed £18,090 at the start of my IVA. I pay £300 a month, I have paid 36 months. The IP told me I have paid £10,890 so far, and still owe £7,200 (24 months to go). I also owe £256 extra, as in the 3 months before Christmas I earned more than usual and the £256 is part of the '50% extra' clause. According to my original Chairman's Report, the estimated dividend is 27%. Actually, when I looked at the original documents (Summary sheet) it said 'distribution to creditors is £11,528', and the estimated dividend is 26%.

So, I owe £7,456. I am guessing I should offer this as a figure?

To Andy: I hope these are the figures you need!

Will I owe my IP any extra money to end the agreement early, or is their fee included in what I already pay?

Thank you.

[MelanieGiles]

They may charge an additional fee for calling a variation which you may have to also bear, so best to check in the first place.

[discojen]

Also, (sorry to keep asking questions!!) what happens to my credit rating if I manage to pay the IVA early? I understood that the fact I had an IVA stays on my record for six years. Is there any way to change that? I read somewhere that you can write to Experian and tell them you have paid off the IVA and they may change their records - is this true?

Thank you!

[Skippy]

The IVA will stay on your credit file for 6 years from the date it was accepted regardless of when it's paid.

[Adam Davies]

Hi
Try 6k,and ask your IP to confirm that this figure will return the original dividend.
State that the loan from your family will only be made if it is to conclude your IVA and that your disposible income will be used to repay the debt.

Good luck

[discojen]

Hi Andy

Thank you for replying so quickly! I will give that a try.

One other thing I wanted to know is that the original amount in my IVA that I had to pay to my creditors was £11,528. So, that means the IP are getting about £6,500 over the five years. Does the fact that I am planning to repay the IVA early mean that they are more likely to accept a lower offer? If I am honest, I don't really understand what the IP does with that money!

A sincere thank you again to everyone who has sent me a reply. This has really cheered me up, and even though we are all going through (or have gone through) a tough time, it is lovely that despite that people can find it in their hearts to help each other. I am going to make that offer, and I shall let you know what happens! Thank you!

[MelanieGiles]

Well as an IP in practive, I can assure you that that money is probably very well earned - there is actually quite a lot of work involved in proposing and supervising an IVA. And if you compare the fees to the interest you would have paid over the same period you can probably put things into perspective.

There definately ought to be a discount on the fees if the IVA is concluded early, and let's hope you get the result you are looking for in a couple of days.

[discojen]

Hello again

My partner has now said he will lend me the money to pay off my IVA. Is this acceptable? He was nothing to do with my original debts, but I just wanted to check that would be OK. Would there be a problem with the person I live with giving me the money?

Thanks again. I know I have asked loads of questions, but I would rather be sure.

Also, an apology to Melanie!! I worded my last post badly - I am not for one minute suggesting that my IP was taking more money than they should. I know that they work very hard, and the time that Melanie spends on this site helping people tells me her attitude is beyond reproach. Her point about how much I would have been spending in interest on my previous debt made me think very seriously about how lucky I have been.

[MelanieGiles]

No need for apology - we IPs are used to people having a go about our fees all the time!! Have developed very broad shoulders over the last 20 years or so!

It's a great idea if your partner is prepared to lend you the money to settle the IVA, and one which you should have no problem getting accepted. Ask your IP to work out a settlement figure for you and they can then put your offer before creditors.