www.iva.co.uk

Seeing quite a few posts on the F&F topic leads me to ask a question on windfalls early on in an IVA...

If the creditors accepted an offer of £25,000 and within the first year an unexpected amount of £10,000 was injected into the arrangement (ever the optimist), what would be the likely effect of this? Would it reduce the term, and if so, would it be to any proportionality of the original offer?

Apologies if I have misread the question but the wording is a little confusing, do you mean £25000 as a one off payment and then you come into £10000, or do you mean estimated contributions of £25000 over the 60 months but with a windfall of £10000 in the first year?

Regards.

Sorry - yes the latter example, contributions estimated at £25K over the 5 years and £10K windfall at some point in the first year, or in any case at an 'early' point in the five year period.

The windfall would enhance the position for creditors overall, and you will still have to make your contracted payments - unless you were able to pay the debts and costs in full of course.

So any windfall(s) over the 5 years would pretty much have to add up to the original debt (rather than any accepted IVA offer) in order to procure any 'early release'?

I suppose that makes sense.

But a windfall in the final year could facilitate a F&F? or does it always have to be a contribution from family or friend where the money will only be forthcoming if a F&F is accepted...

I'm just curious about the mechanics here.

You cannot use windfalls (unless in very exceptional circumstances) to make offers of settlement to creditors - as creditors are already entitled to those monies in the first place.

Hi there - sorry if I sound dumb [:I] but how else are you likely to be able to make an offer a F&F settlement in the midst of an IVA unless you have some kind of windfall / inheritance? Can you only make a F&F settlement if you are borrowing that money from somewhere else then i.e. a family member or such like? [?]

If you believe that you may receive an inheritance in the future you could put forward a full and final offer if the person is prepared to release the money in advance. However, if you actually receive the money it is a windfall and must be handed over.

Full and final offers of settlement are generally derived from third party funding, however they could be from the realisation of an excluded asset.

So to clarify - sorry - if you are in an IVA and somebody suddenly decides to give you some money to offer a F&F to get rid of the cloud of an IVA how does that work? For example if you were given some early inheritance (ever hopeful!!)can that be used to offer a F&F or is that just seen as a windfall? I'm really sorry if I'm sounding like a numpty but I cant quite get my head around this whole F&F thing...thanks.x

If it were given to you on the agreement that you could only have it to propose a F&F then it would be allowed - if you were given it and then decided to offer a F&F yourself with some of it then the answer would be no !

Thanks lulu but still cant see the difference. If somebody gives you some money if you are in an IVA you would have to hand it over anyway so it just all seems to be a play on words to me.[:I]

It has to be put to your creditors that the money is ONLY available for a full and final settlement, and if this isn't accepted the money will not be given.

Thanks Skippy - so essentially you tell them what they want to hear! x

I should have added that a windfall is something that you will get anyway, like an inheritance or lottery win, not something that is offered to you specifically for a F & F.