Paying an iva off early?

[chris2202]

Hi All,

This is a probably a really silly question but if you pay more into your IVA than originally proposed, which figure is the completion figure. In my case the 42p in £ or 100p? I'm guessing it's the latter?

[chris2202]

Sorry, that's probably not clear.....I mean if you end up paying back before the 60 months is up

[ianmillington]

Hi Chris

Depends upon the circumstances but generally the proposal is the minimum offer. If you are fortunate enough to be actually able enough to pay more then the creditors expect it. So it's anything up to 100p in the £.

Bear in mind that what you do is promise to do certain things, rather than simply pay a specific sum, so even if you come up with the agreed sum before the 60 months are up (say 3rd party money) then the creditors are getting paid in a different way. This in my view needs a variation (although I'm aware of some IPs who disagree with me).

That help?

Ian

[Oliver]

You will have to pay to the best of your ability up to 100% of the total debt, plus IP fees and potential statutory interest.

If an IVA proposal is agreed at 40p in the Pound and the proposer actually can afford to pay more and reaches 40p in the Pound earlier than the 60 months they will continue to pay into the IVA until it expires (i.e. the 60th payment is met) or they reach 100% of the debt plus the IP fees plus potential statutory interest.

[chris2202]

Hi Ian / Oliver,

Thanks for the prompt replies, that makes sense. Unfortunately for me, it was just a hypothetical question

[Oliver]

You are more than welcome.

You may find that your income increases during the IVA but as this is usually purely an inflationary increase this can often be offset agains increased living costs.

[ianmillington]

Best to know what the score is if you have a bit of good luck[:)]