Third Party Payment

[welshwiz]

We have possibility of third party payoff for iva but have only been in for 12 months, total debt is 21900 payment of 218 permonth paying back 13080 with possible equity release, also have paid in 5500 ppi repayment 3 months ago, do you think a final payment figure of 5000 would be accepted age is 58

[Foggy]

Hi .. looking at this from the creditors point of view -- if you remain in the iva they stand to get at least a further £10464 out of you, plus equity or, £2616 in lieu. To be honest, without a compelling reason, £5k would seem a little light.

[welshwiz]

If you take off admin fees which be a further 1400 and the 5000 with the 2618 and 5500 already paid they would only be writing off approx 6300 and have money up front as due to age don't think a remortgage would be possible (nearly 63 at finish)they would only get another 2616 out of us

[Foggy]

I imagine your admin fees are based on a percentage of what you pay, rather than a fixed amount.

Put it this way:

If you do the full IVA, with an extension in lieu of equity release, you would be contributing 72 x 218 = 15696 plus the ppi of 5500 (was this net of claims fees?), so they will be getting 21196 (assuming no increase in monthly payments), less 15% fees (we will ignore nominees fees, as these will be the same in each case) = £18016.

If they accept the current offer of 5000 in full and final, they will be getting 12 x 218 paid so far = 2616, plus ppi at 5500 (same assumptions as above), plus your offer of 5000. This comes to 13116, less the fees, as above, at 15% = £11148.

Which would you go for ? For them to take a loss of a further 6868 they would need a compelling reason, which would threaten their chances of getting the full amount under the current terms (long term illness, loss of job sort of thing).

I imagine they'd take a smaller offer than the £11686 required to bring them to the amount they now expect, on the basis that a lump now is better than dribs and drabs over the next 5 years. It would depend upon how robustly your IP presents the offer.

[lem]

I do agree with Foggy here, but what I would say is the best person to speak to is your IP, they know your case intimately, they know who your creditors are and how they work and the likelihood of whether they feel this offer would be accepted, they are best placed to advise whether it's viable or not