Hi, I'm new to the forum. Would it be possible to agree a lump sum offer from my pension?

[Van.j]

Hi,
I'm new to the forum. I have about £15,000 of unsecured debt. I work part-time and am only paying £40 a month in a debt management plan. I've got about £70000 equity in my house so do not want to go bankrupt. Unfortunately my wife is disabled and has had to give up work, so I won't be able to afford any payments. In January I expect to receive a lump sum of £17000 from my pension. I know I should pay off all my debts, but that would leave us with nothing. Would it be possible to agree a lump sum IVA for about £8000?

[Foggy]

As you are in a DMP it is possible to negotiate with your creditors, and the creditors might well accept rather than getting £40 per month for ever. Always worth a try.

[Van.j]

Hi Foggy,

Thanks for the quick reply. Is a lump sum IVA out of the question because of the equity in my house? Or because my pension pay-out is a 'windfall'?

[Foggy]

A lump sum IVA is a possibility, but it could be better if the creditors agreed a settlement to the DMP.

I would suggest you talk this through with an Insolvency firm to explore all avenues in the light of your particular circumstances.

[Michael Peoples]

I agree with Foggy that settlements sound like a better option. An IVA is a comparison with bankruptcy which would show creditors would be potentially better off with that option.

While in a DMP most creditors offer early settlements anyway but if you do not wish to negotiate yourself your existing DMP company could help. Otherwise any firm would be able to assist.

[Van.j]

Just read this on the Stepchange website:

'...the person proposing the IVA can often exclude assets such as cars and property. An IVA is a form of insolvency so this will be noted on your credit file, but with a lump sum IVA it is a legally binding agreement and this means your creditors, should they vote to accept the IVA, can’t come back years later and try to overturn any arrangement made informally. This is why a lump sum IVA beats trying to negotiate full and final payments informally.'

[Foggy]

If you negotiate informally and get an agreement to settle the debt, you simply get the agreement in writing and they cannot renege at a later date.

From Step Change point of view a lump sum IVA has the advantage that they get upwards of 15% of the payment in fees.

[Van.j]

Thanks Foggy

[Foggy]

Who is dealing with your DMP at the moment, Van.j ?

[Van.j]

Stepchange

[Foggy]

Ah right. At least with them doing the DMP all of your payments do go to the creditors, who fund StepChange via other routes --- but they still charge the same as everyone else for IVA's.