www.iva.co.uk

Help re full and final offer
My hubby and i have been in an iva with gt for 2 years. Our original debt was about 53k (reduced to about 27k by iva) we have paid about 5000 so far. 6 months ago our mortgage went up & we had to reduce payment from 200 to 80pcm. Due to illness my husband does not work and my contract at work will come to an end in august so we will not be able to increase payments. We have equity in our house and want to sell and make a full and final offer. After we have paid off all secured loans we will have around 90k left. We have asked gt for permission to sell, if they would accept 35k as a f&f offer and take our names off /close the iva and give us a cert. We would need the money left over to start again or there is no point in selling. GT didn’t answer the questions except to say “we require a letter of undertaking agreeing to hold the full amount of the net proceeds from the sale for the benefit of Grant Tâ€￾ what does this mean ? does it mean that if we sell they would take all of the money? Also is our offer too low? We have an 85% equity clause thingy. We really would be grateful for any advise. Thank you.

Hi and welcome to the forum.

I'm surprised an IVA was the best solution for you when you have that amount of equity which is less than your debt. However, I'm just someone who's had an IVA and by no means an expert.

What it tells me is they want the whole of the equity... but again wait around for an expert opinion or ask to speak for clarification with a senior member of the team at GT

If you sell the creditors will go for and are entitled to 85% of the equity under the way GT have started interpreting the equity release clause. GT will go for every penny they are able to.

£35k is a generous offer and more than the creditors would get if the IVA were left to run it's natural course. I sense that GT would be happy for the IVA to fail and then, possibly, petition for BR to get the lot --- that might just be the cynic in me talking, but GT seem to be hardening up of late!

You are perfectly entitled to ask GT to make an offer to the creditors -- it is not for GT to decide. You need to make the sale conditional upon the offer being accepted -- if not accepted, then no sale. GT would only be entitled to ask for an undertaking for the accepted offer amount.

Thank you Lesley and Foggy for your replies. We are going to ring gt and ask them to put if forward to the creditors, we will back this up in a letter. I'm with you lesley, i think they would rather we sell first so they can take everything but we really need money left over to re start or there is no point. Anyway thanks for your help. wish me luck x

It might be worth looking at borrowing from family/friends or a secured loan at even less than £35k and offer that as a full and final. Once the IVA has then been closed down you can sell and repay the loan leaving more equity for you both. Do not sell until you know what it will cost you otherwise try and struggle on for the remainder of the term.

Excellent advice from Michael

Hi Michael, thanks for that. Im wondering if we would be able to get a loan , we aleady have a secured loan on the house. IF we did get another loan how would we pay it in the interim whilst we had our house up for sale? and also the terms of the iva say we are not allowed to borrow. and if we were successful in borrowing the extra money paid the iva and then sold our house wouldnt the creditors just come back for more money? any advise? sorry to ask so much of you

Have a word with Shaun Vickery, who is a broker who posts on here. He has access to products which have been used to settle IVA's with secured lending and is conversant with the timing and procedure.

Brilliant , thank you Foggy, i think i found him through looking at other post. i will give him a go.
cheers

It is worth a try and credit is fine is approved by the I.P. Shaun will be able to tell you if it an option or not and hopefully it works.

cheers everyone, this really has been helpful

Hi Karen. As mentioned already I'd certainly recommend that you exercise caution in terms of selling your house due to the claim your creditors are likely to have over the equity. You'd be very wise to make sure of the outcome before you do anything. Unfortunately it probably wouldn't be possible to borrow funds in order to offer a full and final settlement to your creditors prior to selling the property due to the fact that your income will cease in August. Obviously if you are able to secure employment in the meantime or have additional sources of income this might alter my opinion. The only other outside chance might be in securing bridging finance to achieve the same result but this can be very expensive and relies on you being able to sell the property to settle the finance. I'd tread even more carefully there too though, I'm really very nervous about the uncertainty of this sort of solution.

HI Shaun, just seen your note. thank you. We are currently putting a letter together to gt to ask if they will accept a full and final offer of 30k IF we can sell our house. our other concern is if they accept the offer and then later come back for more before the issue of the cc. we are thinking of getting a solicitor who is intouch with conveyancing and iva settlements. its so hard to figure things out, feel overwhelmed. this forum has been a real help. if you know of any solicitors please let us know.

Have I completely misunderstood IVA's and equity, or the experts responses. An original debt of £53k with £5k already paid and the creditors can then take entire equity (or 85% 76.5) of £90k which seems to be what is being said above

Original debt of £53k would take in the order of £8k in supervisors fees, £2k nominees fee and possibly 8% p.a statutory interest to settle in full and this amount, less payments to date are always owed during the IVA. Only at the end is any of this unpaid written off.

So, in this case we'd be looking at around £66,000 to hit the 100% payment.