www.iva.co.uk

Hi, back again! Since my last post I have had major talks with my family and lost the plot because my girlfriend left a few days ago (not good [:(] )

Anyway....
My family are really helping and it looks like they could pay a lump sum to my creditors to save me going BR.

If we were to obtain settlement figures what sort of percentages do you think I would be looking at (Cahoot and MBNA) ?

Also, how does clearing debt via a settlement figure affect ones credit file?

Thank you

There is no hard and fast percentage.

From your previous post I note you effectively have 3 creditors. I think you might struggle doing your settlement proposal via an IVA given that MBNA could block it and may well elect to do so. I assume there is a figure that your family is willing and able to advance. Your best first step is to split it on a pro-rata basis and offer them that informally. Accompany your offer with an income and expenditure account (assuming of course that this shows you can't pay anything). With a bit of luck the creditors will accept on the basis that it's better for them than any other option.

Hope this helps

Ian

Thank you for the reply Ian, much appreciated.

Would I have to include my bank overdraft in the equation or can I leave that out?

Oh and any ideas about what happens to my credit file should a settlement be agreed?

Thanks again

Overdraft - That depends.Is that effectively creditor number 4? How much is it?

If you do the deal informally there is no legal obligation to include it - however unless the overdraft is tiny you potentially have only a partial solution. Also, you'll need to be very careful that you don't hold out to all the others that it's a global settlement otherwise you get into very dodgy territory indeed (potential false representations - worst case scenario is a jail sentence (Section 356 Insolvency Act 1986)).

Unless there are very good reasons to do otherwise, I'd play it safe and bring the overdraft in and set up a new bank account.

Credit Rating? Well, no formal insolvency would show so that's good for the rating. It will all depend on whether the individual creditors have a policy of viewing short payment as a default. If you make them an offer and they accept, with luck they might not do so.

Ian

Natwest is my bank account with a large overdraft of 2700.

My family have pretty much taken over the running of my accounts and they are seeking advice but I am trying to seek as much information as possible to assist them. I have a feeling that they want to settle my bank account in full first, not too sure why? maybe so i can keep it? i honestly don't know. Then with whatever they have remaining offe it between the 2x MBNA accounts and 1x Cahoot.

I imagine because the rest of the family bank with NatWest?

So long as the overdraft can be seen to be settled entirely out of 3rd party funds there's nothing really to mean it will subsequently cause a problem even if you go bankrupt. However, I can only repeat that you will need to be pretty careful how you phrase your settlement proposals to the others.

Hello there
if you look to the left hand side of the website under 'template letters' you will see examples of the types of letters for you (and your family)to use.
Good luck
Melanie.n