www.iva.co.uk

Hi, i'm currently 14 months into an IVA. Ill be honest I had the proposal and wish I had spoke with independent financial adviser as not sure of what every thing means on it. Included breakdown below:

Break down of my IVA at beginning:
Total Unsecured Creditors - £18473
Proposed Total Contribution - £12274
Nominees Fee - £2700
Supervisory Fee - £1375
Disbursements - £100
VAT - £714
Dividends 39p in £.

Right, from my 12 month review, it says I have paid a total of £2774 with £1300 in Distributions to Unsecured Creditors.

My disposable income has increased and so has monthly contributions which is not a problem.

I have seen people talk on here about settling IVA with F&F payment, as I believe there is no other way to get out of an IVA.

What would be the implications of a 3rd party getting a loan to pay and end the IVA. Like other people have stated, id be much happier paying relatives. Would the settlement figure be the initial total debt minus what Ive paid or would it be the proposed contribution in my IVA. Also would I have to pay all the IVA fees as set out in proposal?

Another question on the other side of the coin...if I could increase my monthly payments (as I already have)...would I continue to pay my IVA for 5 years no matter what or would it end early if the with the increased payments I paid the proposed total contribution.
To put it simple - initial proposal was £200 pm with the above figures. If this went up to £400 pm to make it simple, would I pay off in 2.5 years?
I'm confusing myself now.

Basically with relatives taking loan and paying off MY debt would leave me with ability to do more work and earn more and pay more each month meaning the loan term would be shorter than the IVA and a whole lot simpler.

Yes, you could get a relative to put up some money for a F & F settlement, although you need to have extenuating circumstances for proposing such a settlement. If you paid more into your IVA, it would not finish early, but your creditors would receive a better dividend. The only time it would finish early, would be if you managed to pay back 100% of your debt, plus fees and possibly some interest. Whichever way you settle your IVA, it will still remain on your credit file for 6 years as will any defaults. Only when you have completed the full term of your IVA (including releasing equity if available) then will any outstanding debt be wiped out. Hope this helps.

Luckystew, you are still liable for your total debts until the IVA is finished so paying extra just gives a better return to creditors, unless as KAYKAY says you are in the great position to pay 100% plus fees and possibly interest.
If you could get a relative to help I would estimate a figure close to the remaining IVA payments, as I am sure the creditors would prefer to get that amount now as a lump sum that over a longer period.

hi luckystew,
i believe it would be possible to propose a lump sum payment from a third party also known as a full and final offer. where there are extenuating circumstances sometimes an offer slightly less than what would have been paid during the term of the iva is accepted, however where there are none, creditors would expect to get back at least the same or occassionally ever so slightly less, because they are getting their money earlier.
i have just completed early with a full and final and my offer was accepted at 1p/£ less than what they would have got over the full term of the iva. But remember if a family member is taking out a loan and you intend to pay them back, then there will be interest on that loan and you will probably end up paying more back than you would have in your full term iva!! the money i used came from my parents savings, i am paying them back but without interest, so it made sense for me to do this.

Nothing stopping you putting forward a proposal for an early settlement,your IVA firm should be able to guide you towards what may be acceptable but a figure close to what you expected to repay would be a decent estimate. Remember however that if you are now paying more into the IVA creditors may be happy to sit tight and get more of a return.

Do the answers given help at all? If anything isnt clear please let us know and we will help you out as best we can.

Paul

Thanks all for the quick replies. My main question then is, what would be an example of excruciating circumstances?

One of my reasons behind this query is...at the moment I am paying 10% of my wages into a pension fund. I will obviously need to speak to a financial adviser before making any drastic moves, however as I read the terms of the pension, I am able to opt out once and opt back in at a later date (should I still be in the job of course). This opting out period would increase my disposable income which I would want to use to pay off my debt. I've done the calculations and I estimate with the increased payments I could maybe pay off the 100% debt a year early.
So I understand from the replies that its usually a 100% payment of the original debt that has to be paid to end early? I'm still a little lost as you have stated that the creditors would expect a payment of what they would have received over the IVA term. As I currently stand, as I am paying more each month now that figure would have increased since the proposal. On that basis, the final total I will pay over the 5 years will be about £4000 less of the original 100% debt (inc proposed fees).
Now with a relatives loan of this new figure from the 5 years of current payments, the increased income from pension would mean shorter loan period with higher monthly payments and interest would be less than the total original debt.

To example in simple numbers:
Debt at start of IVA - 20,000
Proposed payment to creditors when IVA accepted - 12,000
Amount creditors will rec after 5 years of current monthly payments - 15,000

Say I opt out pension giving me X amount pm on top of current Y amount I am paying:

Stay in IVA - 100% original debt paid using X plus Y - 3 years.
VS
Loan for 15,000 with interest paying monthly payments of X plus Y - 2 years.

I feel like I'm trying to play the system here. Just feel with some alterations I could pay more each month but not sure I would really benefit from the effort. Only about a 3rd of the money I had paid in my first 12 months went to my creditors according to my report and I am still receiving debt collection letters. Is this normal? Suppose I have a few trust issues with my IVA company also :/