full and final settlement

[Trind]

Just discovered this forum. I am two years into my IVA and there is a possibility that my parents will be in a position to lend me some money shortly to make an offer in full and final settlement. The original debt was £26,000 which was reduced to £21,000 repayable over 60 months at £350 per month. I have currently got this down to £12,950. The original return to creditors was 51 or 52 p in ££. Do you think an offer of £6500 would be accepted in FFS ? This would represent 44p in the £ (approx). Also, how long would it take to call and convene a variance meeting ? IVA fees are currently £1500 pa I think. Would appreciate any advice/feedback you could offer.

[hara]

May be worthwhile.

How long depends on your IP.

I do not see why it should take more than 6 to 8 weeks.

hara.

[MelanieGiles]

I suggest that you offer at least the dividend you had originally pledged, as a lower offer may be no incentive for your creditors. Are there any particular reasons leading to you wishing to settle - apart from wanting to conclude matters earlier?

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

[Trind]

My parents will be coming into a sum of money shortly, which wasn't available when I started IVA. I didn't ask, they offered to give me a sum to settle, if I could negotiate an early settlement. This would be advantageous as little incentive to gain promotion in work in present, as this would be largely eaten up by IVA. Simply want to get the monkey off my back. Thought creditors would take a small reduction in return for early repayment, which allows them to invest the money, so 46p instead of 51 p in pound a good realistic offer, I would have thought ?

[Adam Davies]

Hi Trind
If you offer a lower dividend then you run the risk of rejection whereas if you offer the original dividend then you will almost certainly get acceptance.
At the end of the day you are talking about £1300 difference,not really worth the gambol and if your IP does not agree with your figure they may even charge you for the variation meeting and this could be as much as a 1k.
Ask your IP what figure is needed to return the original dividend and bear in mind that you should have a reduction in IP fees.
Good luck

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

[Louise]

Hi Trind

You say that there is little incentive to gain promotion in work at present - but infact if did get the promotion with more money then that would make you able to offer the full and final settlement sooner wouldn't it?

[lily]

Not really cos the creditors would just expect more and your aim is to get out of it, Trind, right??

I would not want to take on more responsibilty and perhaps longer hours for no extra cash myself, to be honest.

lily

[Trind]

Thanks for your advice everyone. Will see if there is enough money to offer a FFS at the original 51 p in the ££. Won't be for a few months though, so will plough on in the meantime.

[Trind]

Melanie, what would you usually regard as reasonable for a variations fee ? I have nearly completed 3/5 years and have been quoted £1250 (including VAT). This seems high to me, but might be the average ?? Any input would be appreciated.

[MelanieGiles]

It really depends on how much work the IP has to carry out, and I know that some firms do not charge fees at all. Are they asking you to pay this directly, or is the fee to be borne by creditors as part of the variation. If the latter, it will be down to creditors to determine the level of fee, and I know a lot of lenders are refusing to agree to variation fees at all.

I have to say that I do feel that £1,250 seems a little high.