Settling Early

[gracey84]

After reading through a few of the posts on the forum i've seen a number of people have made a final offer to their creditors to finish their IVa early. How does this work? Would I have had to pay extra into the account before offering this? How early can this be proposed?

I've been in my IVA 2years 3months, never missed a payment. My payments have always been between £350-£410 with £19k in total been owed from the beginning.

Thanks for any advice.

[ianmillington]

Hi

Yes it's doable so long as it can be demonstrated to the creditors that receipt of a lump sum early is a sensible deal in the light of the proposal. You need to have something to offer though and your post conveys little information.

Do you own your home, is there equity, was it included in the proposal?

If you don't own your house how do you intend to raise the money to pay the IVA off early?

Ian

[gracey84]

Ahh, I think I misunderstood how a settlement works. I thought that I could just propose that what i'd paid was enough. I didn't realise i''d have to throw a lump sum on top of that too! Guess i'll have to continue for the next 2 years 9 months!

[ianmillington]

To put a positive spin on it think of it as being 2years 9 months to go on your interest-free loan [:)]

Ian

[gracey84]

I think the only positive spin I can put on my IVA is that my budgetting skills are fantastic now!

[ianmillington]

Just think though, as a result in 3 years you'll have no debt and £400 per month surplus income. Meets the age-old definition of financial bliss!

[gracey84]

Roll on Jan 2011!

[craigbeas]

I am speaking to our IVA staff about settlement by selling our house which was excluded at time IVA was taken out. Due to increase in prices our property should be enough to pay off the minumum dividend of 45p per pound and also leave us 10% which is the minimum we need for deposit on another property. I am being told though that the creditor will be looking for more and would only look to leave between 2-5000 and not the 14500 that we are hoping for. What is your view please?

[Adam Davies]

Hi
If your property is excluded and you can return the original dividend then this should be accepted by your creditors,no trouble.
I have a feeling that you are dealing with a jobs worth in a large company.
Put your offer in writing to your IP
Regards

[luluj]

excluded assets are just that and cannot at a later date be bought in to be included in your IVA!

[craigbeas]

Thanks Andy & Lulu. This is getting hard, it is Grant Thorton who have taken over our debtmatters IVA. They are also trying to get us to change to there T & C's. They say one of the creditors is RBS and they look badly on relisations from property. We want to be in a position where we buy a much smaller house and the mimimum deposit we would need is 10% as max mortgage we could get is 90% as we have been in a IVA. If we put it in and it is turned down do you have to wait to try again? Thanks for help.

[MelanieGiles]

I cannot see what the problem is with your offer Craig, indeed I have answered this on an earlier post. I have not encountered any difficulties with RBS in the past, so I suggest you advise GT that you will agree to the terms of their proposed variation, so long as they agree to the terms of yours! Creditors can only say no!

[ianmillington]

A deal is a deal. For some reason (presumably negative or inadequate equity at the time of the creditors meeting) the property is excluded. Unless that exclusion was as a result of some mis-representation or deliberate undervalue, the fact that the property has now gone up in value is of little relevance to your IVA. You are free to offer the equity to your creditors in full and final settlement. They are free to accept or reject it on commercial grounds. The fact that this may not suit your new Supervisor should really be secondary.

It is patently wrong to say that RBS look badly on realisations from property when they routinely vote in favour of proposals containing equity release clauses. An IVA proposal is a 2 way street, when a variation is proposed it must take account of your position too.

Ian