Hi there, my partner and i have an IVA (well one each infact) that are both looked after by a practicioner. We have been paying our IVA payment for just over 2.5 years, so halfway through.
Our total debt (together) was £51k, we have been paying £400 a month and at the end of the term we were told we would have to remortgage to repay the outstanding balance. Our House has gone in to negative equity.
Someone has told us that we can make an offer in full and final settlement. My PArents have offered to £15k to pay if it will pay it off.
I assume the £400 was the total payments you and your wife were making which would total £24k over 5 years. You have paid half and have £12k left to pay so £15k is a very generous offer. Regardless of whether you were to pay in full by a remortgage your offer should be readily accepted. The fact that there is negative equity in your property is not a fault of yours and creditors cannot rely on future equity for dividend calculation when no one can foresee the future. Contact your IP with your offer and good luck.
Thank you for your advice. Yes the £400 was a joint amount between myself and my partner. I was to payback £0.85 in the pound and he was to pay back £0.90 in the pound. The out standing amount was via a remortage in year 4. The fact that this would now not be possible, and on the amount we owed (and would still owe) do you still think this i a good offer?
Contact your IP and ask him to put this to the creditors.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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Jan is totally right. Put it forward and I am sure creditors will look favourably upon the offer. If you continue to the end and cannot still release any equity your creditors would likely accept what was paid to date as full and final anyway. We are closing quite a number of cases where there is no equity available [or obtainable] and although some may be extended by 6-12 months to increase the dividend, most are just completed as satisfied.
Your question is not one bit thick but your property must have decreased in value by some amount as to achieve the dividends quoted to creditors would require substantial equity to be released. If the IP was taking 35% of contributions as the fee you would have to have released at least £35k from your property. Since the normal maximum loan to value obtainable in an IVA is 85% the fall in the value of your property must have been horrific.
Our Property was valued at £215l when we had out IVA, we have a mortgage of £160k (interest only at the moment) and the same house in our street has just sold for £155k.
Makes a lot of sense and more than justifies an early settlement. Obtain a valuation and up to date redemption figure on your current mortgage and send them to your IP with the offer so the evidence is on file. Should be more than enough for creditors and again good luck.
If I were your IP, I would want your property to be valued now (it has probably gone down in value in reality) to show creditors what equity there is actually available. I would also work out a settlement for you based upon returning the original dividend - and as Michael says I do not feel you would need to offer the full £15,000 - although this would depend upon your creditors expectations with regard to the property.
I have an estate agent coming round to value the property. and have a redeption figure for the mortgage. I have also asked my neighbour (who has just sold her house) for a copy of her letter confirming the offer on her property.
Once I have all this information, I will make an appointment to see my IP in person and present him with the facts, and take it from there.
Do you think it is worth offering a little less first off..say £12k? Or do you believe a higher offer would be better?
The higher the offer the higher the likelihood of acceptance but if you are borrowing from your parents or using their savings £12k may well be fine. In addition, if creditors reject the £12k your parents could increase the offer and sweeten the deal.
