Full & Final Suggested Amount

[BobBaxter]

Hi

I'm about 12 months into an IVA with contributions totalling £21,000 remaining.

I recently discussed my situation with a relative and they have offered me a gift of £17,500 to make a full and final offer.

Do you think this is sufficient to be accepted?

[kallis3]

Hi and welcome,

That sounds like a reasonable amount to me. Is there an equity clause to be considered at all?

You need to make sure the IP is aware that this amount is available for a full and final only and will be withdrawn if not accepted.

[BobBaxter]

Hi Kallis.

Thanks for the quick reply. Does the equity clause you mention relate to owned property? If so I live in rented accommodation.

[kallis3]

It does so you will be ok on that score.

You would probably be ok making a much smaller offer given what you have already contributed.

The best thing is to go in low and possibly up the deal.

One of the experts will be along (probably on Monday) to give a more definitive answer.

[BobBaxter]

Thanks again Kallis. I'm pleased you said that as I'm keen for the gift to be as small as possible.

I'm thinking given what you've said £15k - but any advice greatly received.

Just for clarity I've contributed around £4,500 so far - 12 months in.

[kallis3]

Bear in mind that you will still have to factor in some fees you might be able to go lower.

However, I'm not an expert and this is just my opinion. Lisa Thomas is the IP who posts on here at the moment and will more than likely be on here on Monday and will give you a better idea as to what might be acceptable.

[Lisa Thomas]

I would personally not offer that much - there are 4 to 5 years to go.

Worth making a smaller offer and testing the water to see how creditors react.

Do not tell them your relative can afford more though or they will want more.

I would agree with Bob to offer perhaps somewhere close to £15k.

[Foggy]

I agree that 15 is a good starting point --- both the creditors and IP will be saving a deal in administration costs over the next few years. Also it is good for the creditors to get toxic debt off of their books ( which is why they often sell it at knockdown prices).

[BobBaxter]

Thanks Lisa/Foggy (& Kallis3). So pleased I found the forum - I'll offer 15k and start there.

[kallis3]

Let us know how you get on Bob.

[Foggy]

Best of luck

[BobBaxter]

Hi all

So I proposed the offer to the IVA company, the Supervisor has now asked why I want to conclude the IVA early, and explained that creditors would receive more if they allowed the IVA to continue.

The reality is that I confided in my relative about my circumstances just before the annual review and it was at that point he made the offer, concluding early means that I can move on with my life and the stress of the IVA - I am also self employed and there are no guarantees my income will be maintained, especially in light of the EU referendum and it's unpredictable impact on the economy.

My relative does not have unlimited funds and made the gift offer to me on the basis of what he has available.

Any thoughts on how best to reply to the company?

[kallis3]

Tell them the truth - you want out of the IVA with your reason (which are good ones) and this way the creditors get paid early and you save on fees.

[Foggy]

As Kallis says, the reasoning you have put in your post seems perfectly valid. Yes, the creditors are getting less, on paper ---- they ( and the IP) will save a fair chunk on 4 years administration fees as well. There is every chance that they will sell the debt on during the term for considerably less, as well as the chance, due to the uncertainties you outlined, that the IVA will fail and they will then get less. "A bird in the hand is worth two in the bush".

That all said, it is not in gift of your IP to second guess what the creditors will decide, this is up to your creditors to weigh the pros and cons.

[kallis3]

You must also make sure that the creditors are aware that this offer is available only for a full and final and will be withdrawn if not accepted.