Making a Full and Final Offer

[Soulgrowth]

After a few worrying weeks when it looked like the only option for me was bankruptcy ... light at the end of the tunnel as now started to shine again and I am in a position of having a firm re-mortgage offer that should allow me to be in a position to be able to make a full and final offer to my creditors ... including the creditor that popped up as a liability post IVA agreement and therefore couldn't subsequently be included in the IVA.

My busy IP is preparing a statement for me but I was wondering whether anyone might be able to offer some advice on what a likely figure for a full and final might be. My IVA completed last Sept so I have made nine payments so far. I worked out that the total I would pay over the five years of the IVA plus re-mortaging my house in the final year would be £40,000. The accepted dividend was 26p. Does anyone know whether I will need to pay the full £40,000 ... or more ... or less for a full and final? And are creditors likey to accpet a full and final offer or do they tend to want to stick out for the duration?

Debbie

[keh]

Hi Deborah

Not being an expert but from reading other posts I believe that your creditors will expect at least 26p/£
Will your re-mortgage generate enough equity to cover your iva and new creditor?
By paying off early you should save about £2400 on your ip fees but your creditors might want more money if your equity can afford it

I'm sure Melanie or Andy will tell you the full picture

Keith

The long and winding road will straighten out eventually....keep the faith

[MelanieGiles]

Hi deborah and glad to hear that things are moving along for you now.

You say that you are re-mortgaging to pay off the IVA debts and a post IVA creditor. The level of your settlement will depend upon what creditors originally expected to receive - ie was your property included under the usual 4th year revaluation and equity release provisions. If so, I think your IP will want to see you re-mortgaging to the maximum loan to value and affordability in order to broker a successful settlement with your creditors.

If the property was not included in the original IVA, then an offer similar to the level of outstanding contributions, less a discounted for future IP fees, would be appropriate.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Soulgrowth]

Thanks for your thoughts folks. Yes a stated re-mortgage of £25,000 was included in the original IVA proposal.

Debbie

[Soulgrowth]

Sorry, just to confirm ... the IVA agreement was repayments AND a £25,000 re-mortage in year 4 the total of which amounted to approx £40,000 to pay back.

Debbie

[MelanieGiles]

Deborah

Was the re-mortgage provision set at a maximum of £25,000 or was that just an estimate based upon the value of your property at that time. It is more usual to base the equity figure on a revaluation and a percentage of equity, rather than a set sum. Please check the wording of your proposal to be sure.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Soulgrowth]

Hi Melanie

Yes, the outline proposal states "release of equity in the final year £25,000". I was also surprised that this would not relate to the future value of the property. I hope I have got this right, that seems to have been what was agreed. I think it is simply that McCambridge Duffy did a jolly good job.

Debbie

[Adam Davies]

Hi
Well if that is the case,and I wish it was like that for all,then you should look at proposing the £25k plus all you 60 payments less what you have paid in and four years IP fees.You will then have to add on a variation fee[approx 1k].If you can afford to I would add on a little bit more just to make your offer more tempting.
Good luck
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[cockerhoop]

what the hell is a post iva creditor, sounds like something frightening lurking in the dark, is this usual?

[MelanieGiles]

A debt which has been incurred after an IVA has been accepted. Most trading businesses, funded via usual trading terms, technically incur debts after the IVA has been accepted, but need to ensure that the amounts are paid off within usual trading terms. In this poster's case, she has an ongoing lease liability.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk