Settlement question

[arsenalfan]

Hi,

I'm imminently about to begin an IVA that will total about £30k (including fees etc).

At the minute, it's the only option for me. My family aren't happy with it, but realise it's all I can do right now. However, my brother is in a position where he may be getting a bonus of £50k in about September time (he's far too clever for his own good!)

He's said that he would be willing to lend me the outstanding amount on my IVA come Sept in order to get me out of it, on the understanding that I pay it back over however long it takes. The main reason being that it takes the cloud away from over my head, and reduces the risk of bankruptcy should I lose my job at any point etc.

Am I right in thinking that the creditor would go for this? It takes away their risk, and they get their money back in double quick time.

Would this work? Or am I going to hit any major obstacles?

Thanks

[MelanieGiles]

Is he definately getting the bonus? If so, it may be better that you propose a full and final settlement IVA in the first place, on the assumption that he will lend you the money within the next 12 months, rather than offering one based on contributions.

There is a certain reluctance by creditors to accept full and final settlements so soon after a contributions IVA has been accepted, so seek the advice of the IP who is acting for you to ensure you have considered all avenues.

[arsenalfan]

Thanks for the reply.

Could you please elaborate on your first paragraph? What is a full and final settlement IVA? I've not come across that before.

As for the bonus, yes, it is more or less confirmed. He puts it at a 95% certainty, the lucky git!

Thanks

[MelanieGiles]

It means that you offer a lump sum in full and final settlement rather than ongoing contributions, with the advantage that the IVA only lasts for one year and the creditors get paid a lot earlier.

He is indeed fortunate to have such a good job, and you are very fortunate to have a very generous brother! I do a lot of these types of IVA proposal, and they are quite popular with creditors.

Good luck!

[arsenalfan]

Ahhhhhhhhaaaa!!! Never knew about those. So am I right in thinking that I make no contributions to the IVA, but I agree to make the agreed settlement within 12 months via my brother?

Would it affect my p/£ settlement figure? At the minute, I'm all set for 26p/£, and if I was to run a contributions based IVA that is all I could afford, naturally. The figs I've run past my brother are based on the 26p figure, and if it was to be any higher than that, my brother won't go for it.

And yes, i am lucky to have such a generous brother! He's a city banker, I work in IT. Think I chose the wrong career! [:D]

[MelanieGiles]

How much do you actually owe to your creditors?

[arsenalfan]

The amount I owe is pretty much bang on £80k.

[wen]

Wrong career maybe... but right club [:D]

[MelanieGiles]

Then I feel that an offer in the region of £25k would be a good start, but if you have an IP already involved and acting for you what have they advised? And how much were you going to be paying into your IVA each month?

[arsenalfan]

To be honest, I've not mentioned my brother's (potential) offer to the IP. It's only really come up in the last few days. The IVA is/was going to work out at £490 per month or so.

[MelanieGiles]

I would see what they say and if they would be prepared to make such an offer on your behalf. If I were them, and the lump sum is certain, I would much prefer to see if this could be done and dusted sooner rather than later, and it will be interesting to get your feedback in due course.

[arsenalfan]

Many thanks for your advice Melanie. I'll come back with feedback as soon as I hear anything.