Full and Final Settlement

[johnmc]

After requesting a figure for a full and final settlement figure from my IP I am a bit disullioned/confused with the response.

My original debt figure was £23,803.90. The agreed dividend was 51p/£. I am 30 months in and have paid £10,395 to date. The letter I received dated that to pay the creditors 100p/£ the figure I would need is £21,709.25 which includes £500 meeting fee and £1,500 early settlement fee.
The letter says basically that after fees I have paid £4,600 to creditors thus far. What is a relistic figure to offer for F&F settlement?

Many thanks

[Adam Davies]

Hi
The first thing to establish is do you have an equity release condition in your IVA ??
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

And please ask your IP what is meant by an "early settlement fee".

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

[johnmc]

In respect of the Equity release clause, I dont think this will apply as I do not own any property.

Do you believe that the early settlement fee is excessive.

Many Thanks for replying, especially as it is a saturday. Can you give advice on a figure to offer?

[Adam Davies]

Hi
Well if you have no equity release and presuming that your funds are coming by way of gift from a family/friend then I can see no reason why your IP is insisting on a 100 percent dividend.
Ask them for a figure to settle with your creditors for 53p in the £.This will be a little sweetner for your creditors to accept.
The figure should be 53 percent of £23803[£12616] plus three years IP fees and a variation meeting fee[all told about 6.5k]less the payments you have made [£10395]about 9k.
So you should be looking at 9-10k as a full and final figure.
If you have come by funds from a windfall then you will have to pay 100 percent of your original debt plus IP fees and possibly interest.
Hope this helps
Regards


Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[johnmc]

Thanks

Would this be acceptable?

Dear Sir/Madam,

I would like to offer £9,000 in order for Full and Final settlement of my IVA. The funds, if the offer is accepted will come from a friend in the form of an interest free loan and will be paid at a rate of £350 per month until the balance is nil.

Please note that these funds are only available to me in the event that my IVA will be finalised. Therefore should the offer not be acceptable to the Creditors the offer of the loan will be withdrawn.

I am eager to finalise my IVA if possible in order to build my credit file back up.

I would appreciate your early response.


Yours sincerely

[MelanieGiles]

I'm not saying the fee is excessive, I just don't understand what work is being done to justify such a fee - when they presumably also have provision for ongoing supervisory fees in any case. You need to clarify exactly what the fee is for.

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

[johnmc]

Thanks Mel, I hope you get paid for this!

Sorry, I have another question. I am proposing to offer £9k as full and final settlement. Will this take into account the fees or are they treated as seperate. Ie will the £9k be offered to the creditors and if accepted my IP will then charge me the £1,500 early settlement fee and £500 meeting fee etc. If the offer is not accepted I presume as the meeting went ahead the £500 fee will still be payable?

Im not sure how to query the fees to be honest as another poster on here said they encountered several problems when querying fees. As I want to settle I dont wish to rock the boat as it were. It might just be me but my IP seems to discourage early settlement by giving me the 100% figure only and the charges.

[MelanieGiles]

I think that Andy's suggested calculation included final fees. Your IP's fees will, in any case, need to be approved by creditors. I fee that an additional fee of £2,000 may not be acceptable in the current climate, but see what your IP has to say about this. As you say, your motivation is to get creditors paid and move on - if the creditors feel the fees are too high they will say so, and benefit directly from that saving.

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