I have a question with regards to a full and final settlement of my iva. My IVA started in April 2009 and was originally due to end in April 2014. This was extended to October 2015 due to missed payments.
My initial payments were £192 per month which went up to £242 after a year.
My figure for the IVA in total over the term is £15750, based on the £242 per month and to date I have paid £7194.
A relative has offered me a settlement figure to repay the loan in January 2013 of £2,500 by which time I will have paid a further £726 making a total of £10,420. This would repay the loan 1 year and 8 months early.
There is little equity in my house and not enough to remortgage.
Do you think this is a reasonable offer to make? Also if the offer is refused do the creditors advise a figure they would settle the debt for?
Also what paperwork would they need from my relative? and do they require any paperwork from me?
Sorry for so many questions, my relative requires the information prior to writing to my IVA company and making the offer.
I look forward to your replies and any assistance will be much appreciated.
Hi Sadie. We too are in the early stages of going for an F&F.
It seems a bit of a grey area what the creditors would accept. All I can say is it should be as close as possible to the remainder of the payments under the Arrangements, and you have already done that calculation. However I believe creditors also take into account your personal circumstances and the reason you want to settle early. Each case is taken on it`s own merits I guess.
Is there an equity clause in your Arrangement? We only commenced ours in March and it has a payment at the end in lieu of not being able to remortgage. Our equity was fairly high though.
We got a list of things to do from our IP to set the process in motion. You talked to yours yet?[?]
I have very little equity in my house and the IVA states I only have to remortgage if there is at least 5K in the property and I can remortgage at 80% which is not possible as I don't have the equity.
I know they say you should offer the full amount but there doesn't seem much point in finishing the IVA early if that is the case.
Most of my original creditor debts have been sold on to other companies for which I would imagine were very low ammounts and much less than the debts I owed the original creditors who signed up for the IVA.
My relative just wants to pay off the IVA for the best offer they can get. Including the money I have paid and the £2,500 final settlement this works out at 67% of the amount at the increased payment of £242.
I haven't spoken to my IP yet, what sort of list did you get?
Yes I have a close family member who is funding the F&F. The 4 things my IP have asked for (so far) ;
1. A letter from my relative detailing their offer.
2. A letter from us detailing the offer, and the reasons for making it.
3. A current written house valuation.
4. Mortgage redemption statement.
I asked the IP if there were any template letters for 1&2, but there weren`t. However I put a search in on the forum and found one that I`ve used.
I`ve also been told that if the offer is over £10k then they need to carry out money laundering checks on the relative.
No 3 ; we attempted to sell the house not long before we took out the IVA and the estate agent has kindly supplied us with his valuation, in the form of a short simple letter.
No 4 ; phoned our mortgage provider and it`s already arrived.
Hope this is useful. Not sure if it`s the same stuff needed for all people.
I think the IVA companies have something against F&Fs to be honest from what I`ve read, and indeed their response or lack of it confirms that. Maybe they get more fees if it runs the full term? And if your offer is a low one don`t let that alone put you off, your case should be judged on its merits.
Get in touch with your IP, and let me know how you get on. I`d be interested in swapping notes.[;)]
Last edited by Hyperdrive on Sun Nov 04, 2012 8:50 pm, edited 1 time in total.
Ah -- but not if F&F is near original divvy -- same (ish fee) -- less work Yes, I agree if the F&F is much lower than anticipated -- but they will still be doing less work.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Contrary to Hyperdrive's thoughts - I can say that most IPs do actually favour full and final settlements as they represent a win-win-win situation for clients, creditors and the IP who will get paid those fees perhaps a lot earlier than they had originally expected.
Thanks for all the replies, much appreciated. I can understand that the IP and creditors may think the offer is on the low side with payments and the £2500 making a return of around 67% of the ammount on the payments of £242 per month.
Like all of us costs for everything have risen a lot in the last year or so and I haven't had a payrise for two years and the monthly bonus included in my IVA will not be paid after December this year.
Can someone advise the situation if my relative offers the £2500 to repay the loan. Will the IVA company propose it or just say it is too low? I understand there is a cost to putting the proposal to the creditors. If they refuse the offer will the creditors or the IVA company come back to me and say what amount they will settle for?
Sorry for so many questions but I would like to know the situation before putting a proposal for a full and final settlement to the IVA company and the creditors
I can afford the monthly payments but only because my relative helps me out with things such as the costs to keep my car on the road and other unexpected expenses related to running a house. Can you explain the process if I make an offer to the creditors via the IVA company? I know you think my offer is too low and I can understand that. My understanding is the iVA company have to put the offer to the creditors which involves a creditors meeting at an additional cost to the arrangement. If the creditors say no to the offer will they provide some idea of the amount they would be prepared to accept for a full and final settlement?
I don't think they come back with a counter offer, they will want as near to the original dividend as possible, if you are having extra costs that have not been accounted for in your IVA or are in excess of the allowances you have been set then you will need to provide receipts as proof to be able to justify to creditors why they should accept a much lower amount. What are the additional expenses relating to running your home? wouldn't it be better to try to get this accounted for in your allowances?
Yes, I agree if the F&F is much lower than anticipated -- but they will still be doing less work.