My dad has kindly offered to help out financially with finishing my IVA.
Before I approach Payplan with a F&F settlement offer, would someone please have a look through the following to see if my understanding of the process is correct and if not, please give me some guidance.
I am 4yrs and 3 months in to my IVA and never missed or been late with a payment. I know I will not be able to release any equity from my home so know I will have to extend by 12 months. I currently pay £222 pm plus regular overtime of roughly £160pm.
Firstly, my share of the equity is approx. 70k, if I cannot re mortgage, once the extended 12 months is up or if my F&F is accepted, is that me done and dusted or do my creditors have any future hold over the equity.
2. I have twins and our child benefit of £149 will stop in August, I assume this will be deducted from my surplus.
3. That means I have 4 payments left at £222 followed by 17 payments at £73 (allowing for the loss of family benefit) which means my creditors would expect receive £2129 in total. Again I assume my overtime would not be included as although regular, it can never be taken as guaranteed.
If my calculations are correct, I would be more than happy to offer 2.5k. Or am I way off track?
You cannot rely on a reduction to compensate for the loss of the child benefit as Payplan has a habit of then reducing your other allowances as they are no longer considered dependant children ( I know -- but Payplan do not operate in the real world inhabited by the rest of us).
So working on 21 payments of £222, your creditors would be expecting £4662 (assuming the 17 includes the extra 12).
Bearing in mind the savings in admin costs, the "bird in the hand factor" and the fact that you have been regularly over paying (so to speak), they might still consider £2,500. Payplan will kick and scream as they do not like low offers. They will also threaten the possibility of bankruptcy ( as well as suggest this as an option to the creditors --- insist they remove any reference to BR in your offer).
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
The 17 months does include the extra 12. I must admit that I was not expecting that the loss of child benefit would not reduce my surplus. If both my kids do not manage to get jobs sharpish, then without their 'rent' we are going to struggle big time so a successful F&F offer is a must.
The figure of 2.5k I mentioned was based on my workings out, my dad has offered a maximum of 5k.
If my creditors are expecting to receive £4662, do you think an offer of 4k would be sufficient? I don't want to be cheeky and take my dads full 5k.
I would offer a full and final of around £3500 - taking into account the time it takes to have the f & f offered and accepted by creditors. Make sure your IP knows that this money will only be offered for the purpose of a f & f offer being accepted and you won't have accesd to it if not agreed.
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
I agree with luluj. £3.5k should be tempting enough. I imagine, with the overtime paid over in the past, that they are getting well above the predicted dividend anyway, so are already on to a winner.
Many IP's are quick to increase payments for any reason but slow to reduce them. Payplan do operate an IVA differently to the majority in certain aspects and, so, their reaction would be difficult to predict and I can only surmise based upon comments made on this forum over the past few years and we do only tend to get the ill reported on here, rather than the good.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thank you Foggy and Luluj for taking the time to help, not just with the replies to my question but for all the others you reply to as well. So many times over the last four years I have popped on here looking for an answer to a query and found the answer without the need to post.
I will be drafting my letter and setting the wheels in motion, I will update here if my offer of F&F is accepted. Cheers!
£3,500 seems like a reasonable offer and I would hope that creditors would accept it. Make sure you keep on top of your IP for calling the variation meeting as some can be slow and not stick to the required timescales...!
