How to approach Full & Final Offer

[FBS]

Hi All,

I pay £150 x 72 months into an IVA. I am currently 36 months in and would like to get it out of the way as I have the chance to thanks to my cousin who will pay £5,000 to the creditors.

How do I approach my IP? I understand that this site has letter templates but I'm not sure which template to use. From my understanding, I am offering a full and final offer where I'm hoping that the creditors will accept a close offer of the remaining debt. Do I still use letter 6? As letter 6 assumes that a full and final settlement is being made (not a full and final offer)

Would letter 6 only be used if offering the full remaining amount owed in the IVA? (£5,400)

Essentially I am asking which template I should use to make a full and final offer of £5,000.

Thank you.

[Breezy]

Hi. Your offer is not based on the remaining debt, but is based on the remaining agreed payments. So it is a F&F offer, not a settlement. Semantics really. The use of the word settlement can cause confusion as many take this to apply to the debt balances, rather than remaining payments. Templates 5 and 6 really are the same but are used in different circumstances --- with 5 you are stating that you cannot afford to pay the IVA --- so a rejection of the offer might see it cancelled, whereas in 6 you are saying "I am fed up with this and want to end it early" --- so, if rejected by creditors it is easier to get them to accept to leave the IVA run as before.

To be honest, both templates are over wordy. Often the thing can be set in motion with a phone call, although a letter prevents surprise questions catching you on the hop ! I would simply write saying that you wish to make a Full and Final offer to bring the IVA to an early, successful conclusion on payment of a lump sum of £5,000, which is being kindly provided by a family member. They will ask for proof of ID of the donor and existence of the funds (usually a bank statement from the donor, showing the funds are there. The statement can be redacted). This is for money laundering regulations.

Best of luck.

[FBS]

Hi Breezy,

Thank you for clearing this up, I really appreciate your response.

I'm now in the middle of drafting a letter to the IP, and will follow up via phone. Should the letter mention other reasons for wanting to end it early, apart from having access to the money to finish the iva via a family member?

I'm assuming that the process up to accepting my offer (hopefully) will take a few months, should 2-3 months worth of payments be deducted from the f&f offer? Or would my IP advise on offer amounts once they believe variation is possible? Would the offer on my letter be flexible after sending it to the IP or fixed?

Thanks,
R

[Breezy]

The offer is yours to make and, usually, an IP will not advise on the amount. As for reasons --- yes, if you have other reasons than just "wanting out", it is a good idea to air them, especially if they relate to health (physical or mental).

Yes, the process will take a couple of months. You could stipulate that any payments after a given date will de deducted from the lump sum amount, or give the creditors the added bonus of getting a couple more payments, which will make them happier to accept. Some agree a hold on further payments with the IP, pending the outcome of the offer.

[FBS]

Hi Breezy,

Thanks for the help over the last few replies.

When I initially started my IVA, the terms and conditions of the IVA said that my variation fee could not exceed £300. I received a letter today which I must sign in order to confirm that I am happy with the f&f offer made etc and a 'supervisor fee' of £500 which supposedly pays for the admin work related to the variation meeting.

Am I correct in thinking that this 'supervisor fee' of £500 is the variation fee? Or are the variation fee and supervisor fees both separate fees that I must pay? The letter does not make any reference to or specifically use the term 'variation fee'

Thanks,

R

[Breezy]

Hi. It sounds like this £500 is the fee for the F&F offer, which is usually between £300 and £500. Depending on your original agreement your IP will get supervisors fees of around 15% of realisations ( monies paid in ) as well. Often, in a F&F, the IP will ask for £500 and get knocked back to £300 by creditors.

[FBS]

Hi Breezy,

Thanks for clarifying this. So I should expect to pay the variation fee and a supervisor fee (which could get brought down)?

Do I have a leg to stand on regarding the price of the supervisor fee? I understand that I am close to closing my IVA, but I feel like they are taking liberties at this point. They are paid for administering my IVA but would like more money to do the job they are already getting paid for?

Thanks,

R

[Breezy]

Do I have a leg to stand on regarding the price of the supervisor fee? I understand that I am close to closing my IVA, but I feel like they are taking liberties at this point. They are paid for administering my IVA but would like more money to do the job they are already getting paid for?

It's a difficult, "rock and a hard place" situation (and morally reprehensible) ---- you depend on your IP's support to get the offer accepted, so upsetting him or her could damage your chances. Although it is your offer, they are the ones presenting it and can put any flavour they wish !

These monies are coming out of the offer, not added to it, so it may be best to bite the bullet. Some IP firms are notoriously fee centred and a few are just struggling to keep afloat.

[FBS]

Hi Breezy,

Thank you for the help above across this thread. I managed to submit a F&F which was accepted and my IVA has officially been closed.

Very happy to get this all behind me...until I received a letter from Link claiming I had a remaining debt of approx £1,300.00 from an old joint credit card with the Mrs. I checked my IVA docs and they are right, its was not a part of my IVA.

Not a problem, I called to make an offer instead of paying the full balance. They said they would consider this and get back to me. They said I should be aware that if the offer is accepted, the payment will be recorded on my credit file as a 'partial payment'. Is a partial payment on my record something to be wary of? Cannot seem to find anything online.

Thanks,
R

[Breezy]

Congratulations on finishing the IVA

A partial payment mark will, in any case, be eclipsed by the IVA remaining on your records for the next 3 years, so no biggy. Then it will sit there for another 3 years --- it is not disastrous.