Should I try F&F settlement?

[trionon]

Dear all

I've got a dilemma and am hoping that smb on this forum might be able to help with some suggestions, pretty please. I've just started my 3rd year in IVA and circumstances are as such that I may need to complete this arrangement early . The amount expected to be paid in is £65,468.55, which includes the equity payment in year 4. I have paid £15,833.25 so far. The outstanding amount is currently £49,635.00. I think it's £0.51 contribution.

PayPlan obviously tell me that creditors would expect an offer as close to the one originally proposed as possible but I know that I won't be able to raise as much as £49K in equity, so what would be the reasonable figure to offer in F&F settlement? Or should I try to see first what equity may be available to me by way of remortgaging?

Grateful for some advice....[?]

[Lisa2009]

Perhaps you could tell us the reasons for wanting/needing to settle early.
It may be worth, like you said, looking into how much you could raise via remortgage and having a word with your IP.

I think only under exceptional circumstances would your creditors accept a lower offer.

[plasticdaft]

I think it will all depend on how much you can raise equity wise.

[trionon]

Perhaps you could tell us the reasons for wanting/needing to settle early.
It may be worth, like you said, looking into how much you could raise via remortgage and having a word with your IP.

I think only under exceptional circumstances would your creditors accept a lower offer.

thank you for your prompt reply. The reason is I am considering a new job but this may involve relocation, so ideally I want to be in the position when I am not worrying about the debts etc while I am settling in a new role and location. My property was originally valued at £82K for the purpose of IVA and I have about £44K outstanding on a mortgage, so think realistically I can expect something like £30K in equity release, will this be to low an offer?

[trionon]

Hi, me again! Well, after long and hard and painfull consideration, it looks like I probably won't be able to raise enough equity on a remortgage which leaves no other alternative but to sell. This way I (hopefully) will be able to make a F&F offer very close to the remaining balance of my IVA, and after taking the estate agent's and solicitor's fees will have practically nothing left but that's no bad thing I suppose as it will allow me to settle the IVA and walk away free to concentrate on the rest of my life. The question remains, do I need my supervisor's permission to put the house on the market etc? Would be really gratefull if anyone can answer who had similar experience....

[Viki.W]

Hey there, You will have to inform your IP, let us know how it all works out, good luck. Viki X

[trionon]

Hey there, You will have to inform your IP, let us know how it all works out, good luck. Viki X

thanks, Viki...thought as much about informing IP. What I might do is get couple of valuations, then put F&F offer and based on that (whether it's accepted or not) will then put a house on the market. Would that be a sensible thing to do, I mean in this order? Sorry to be asking so many questions, it's just I get no joy out of Payplan, all they keep saying is that creditors will expect this and that, but of course I want to pay all that I can and in a best way possible. I am just looking for solutions to make this happen. I get the impression PP don't want me to settle! might be wrong

[Viki.W]

Hey trionon, I think you should definately get your valuations first. What you have to consider is that the creditors would want the rest of their payments AND the equity release. As you're actually selling you may be able to provide close to that amount. I know you're having no joy with payplan but it really is your IP who should be advising you, try emailing them direct when you get the valuations. Good luck, Viki X

[Emily]

Remortgage to pay of debts in any form is going to hard during these monetary crunch days. You may get an offer from subprime brokers,that is becoming unlikely compared to last Autumn. As I have said in these pages Subprime Brokers have 'crystallised' as their Bankers have little faith in Bankrolling them in the IVA/property business.95% of the offers are vanquished. The rates and offers are now no better High street Bank offers in LTV and rates!

Selling your property would also be problematic as you would not get the 'top rate' in the wake of the housing slump.

When the IVA concept started Property prices were on the Up and Up, the 4th year EQ release clause is NOW nearly inoperable if it is based on remortgage as Banks/brokers don't do remortages like a cash machine pay out like they used to - there will be less EQ been redrawn for a very long while.The peak withdraw was around 2004/5.

No one knows how far the housing slump will go but all records have been shattered so far.

FF settements would not restore your borrowing credentials for 6 years and even longer from the day you took out your IVA.....

[trionon]

well, yes, all of this is true, which is why selling is looking like a more practical option. I am not particularly bothered about getting the top price, just enough to clear the IVA (it is an investment property with the tenant in it), nor am I worried about the future borrowings as I've been renting since I took out IVA in 2006 and actually grown to like of not having a responsibility of the house ownership and I figure when the time comes in a few years time and I am in a position or want to buy again, the market might improve along with my credit rating, whatever, life dictates different priorities, and at the moment it's getting rid of debt....

[indebtforever]

there is always a deal to be done it is your right to offer what you think is acceptable and more than likely the debts will have been sold on and if your lucky they may want payment sooner rather than wait 4 years go for it[8D]

[Adam Davies]

Hi Trionon
I think selling and offering the equity now would be welcomed.The only problem would be convincing creditors not to expect continued monthly payments
Regards

[maxdebt]

Hi there. Correct me if I am wrong but your original unsecured debt must be in the region of £120,000 ( similar to mine!) I believe that your creditors are hoping to receive as close to that figure as possible. My 4th year equity release clause says I have to seek a mortgage 85% LTV and to release all the equity into my IVA. If it’s not at least £6000 then I have to pay an additional 12 months of payments (poop!) I hate to be negative but I think your creditors may expect all your equity PLUS monthly payments! You do, of course, need to speak directly to your IP about this

[MelanieGiles]

Andy is correct - whilst creditors will gratefully accept the sale proceeds of your property, if you are left with disposable income following the sale they will expect you to make ongoing repayments for the remainder of the five year term - and so you will need to provide your IP with a detailed statement of income and expenditure - as anticipated following yoru move.

[trionon]

Gosh! it would never have occured to me to consider and ask all those questions. Thank you very much everyone and experts for this additional information. Now I am better "equipped" I have written to my case officer with the following (I think this is clear enough?) , and will let you all know once they've replied:

if selling and offering the equity in F&F settlement will I still be expected to make continued monthly payments for the remainder of the 5 year term, or will my payments cease once the property is sold?

if whilst awaiting the sale I continue to maintain the usual monthly contributions will the outstanding amount be revised upon the sale proceeds of my property, or will the creditors expect all of the equity?

finally, should I decide to go ahead with valuations and consequent sale, what is the process to be followed with the IP etc?

Just for info, I think the original debts across 8 creditors was around £90K and this is what PP told me recently following my year 2 review in April: details of what is outstanding on your IVA. The amount expected to be paid in is £65,468.55, which includes your equity
payment. You have paid £15,833.25 so far. The outstanding amount is
currently £49,635.00.
So, my understanding is £49K is what is required to settle, but like I said I will let you know what PP say.....