www.iva.co.uk

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,

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

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!

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