Please can you be honest

[carl]

Hi, I would really appreciate help on an IVA. I built up a massive debt over 15 years of £177K eventually folding in 2003 by agreeing an IVA for £55K including IP fees. I am 32 months into it, not missed any payments, although I have been a month late twice including this month but am now up to date. It's been very difficult. I have paid 60% of the £55K so far (£27K) and my payments now ramp up from £800 - £900-£1000 to get the rest paid off. They ere meant to ramp up from £800, £850, £900, £950, £1000 over 5 years but salary did not increase as hoped early on although it has now. I earn £48K salary. My friend is prepared to 'gift' me £24,000 (save £3K on the £10K IP fees inc vat by settling 2 yers early) and the £1000 (est) variation fee. I will pay this back for the 2 years remaining. Why not keep going? A/ I have earnt £5,000 in bonuses this year and in my May review will have to pay £2,500 which is already spent on living expenses plus I am desperate to get out of IVA as 3 years I have worked very hard. The question is this: I know 40p in the pound is the norm these days since banks toughened up but when I get my 25p agreement, my IP said a 20p settlement was the lowest F&F % that I could expect. I want a fresh start so would like to offer 20p in the pound but read in many forums that 25p is the minimum. I read that Max Recovery and Eversheds etc would just think they'll get the whole 25p if they wait 2 years so I will have wasted £1,000 I can't afford if I offer 20p. Please can you be honest and tell me will 23p have a decent chance, or is worth not even bothering to offer less than 25p? The worse fear is paying £5,000 (I don't have) making 5 offers. The less final gift debt to a close friend, the sooner I can finally get free of years of problems and misery.
Help!
Thanks and regards,

[ianmillington]

In the main, creditors are receptive of full and final settlements, so long as its the best offer on the table. However, I perceive the potential for the creditors to argue that you are living beyond your means, given your bonus is pre-spent, although as we don't have the full picture I'm merely flagging it as a potential obstacle. If you want to attempt a full and final then this will require a variation. It will be necessary for you to take a long hard look at your income and expenditure so as to demonstrate what you can realistically pay. Creditors will then be able to gauge your offer against the alternative.

Can I take it that the "ratchet agreement" where the contributions go up year on year was put in place simply to get you past the magic 25p in the £? Would you be able to manage the IVA if the ratchet were removed as an alternative to attempting a full and final??

Ian

[OPTIMIST12]

Hi carl -

I was lucky enough to get a bonus last year and immediately paid 50% of this into my IVA "pot" as soon as I received it. I was allowed to keep the remaining 50% and was very grateful for this. Obviously the 50% bonus payment was part of my agreed original proposal. My total debt in my IVA is a similar figure to yours -although I am paying a much higher dividend and earn a lot less!!!

Was just wondering what increase in living expenses meant that you had to spend your whole bonus? Sorry - just trying to compare things with my case!

[Adam Davies]

Hi
My opinion,on the facts supplied,is that your lump sum would be accepted
Regards