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Hi there,

My sister is currently going through the process of getting a IVA. I am in a financial position where I may be able to pay of her debt. Is it possible to pay off the debt with a lump sum? If so what are the benefits of this?

Good evening,

Your sister can ask her creditors to let her pay a lump sum which is less than the full amount of her debt. This is called a Full and Final Settlement. In return for this payment her creditors agree to write off the rest of what she owes.

As a rule, people are in a position to make such an offer because they’ve come in to some money or have some savings they can use. Alternatively, a friend or relative- a sister! may be able to provide the sum required.

Could you tell us how much the debt is, how much can you offer and who the creditors are?

Kind regards,


Julia



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Hi amberd and welcome to the forum

When you say pay off the debts, do you mean all of them in full, or just the ability to make an offer of full and final settlement at a lower amount?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Hi Melanie Giles,

Sorry I ment the ability to possibly make an offer of full and final settlement.

The benefits of this to your sister are that, if accepted, her IVA can be closed and her credit rating will start to repair a lot earlier. Also she will no longer have to operate under a tight income and expenditure budget, but I assume that you will need your loan to be repaid. Get your sister to ask her IP for a settlement guide.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk