Final Settlement / Bankruptcy ?

[whitey130]

Hi,
I began my iva in march 2013. i owed approx £16000 in a loan and two credit cards to Lloyds and Payplan settled on a monthly payment of approx £111 which over 5 years pays them approx £6700.
over 26 months i have paid £3599.11 which has included some addtional payments for income i have received due to overtime at work.
i now spoken to payplan about possibly making a payment of £3000 from money from a relative, as a full and final payment offer. this would take my total payments to £6599.11 so just under what
they would receive should my plan go its full course.
Payplan have said they can put my offer forward to my creditors but that there is a small possibility that the creditors will make me bankrupt !!??
Why would they do this ? Surely there is no benefit to them to do this and I dont want to be made bankrupt...!!
I have no assets or savings, only a car worth approx £500 which I use to go to work.
And would £3000 in these cicumstances be a reasonable offer, given it be just under £100 total from what they would get over the full plan?
Thanks

[Lisa Thomas]

I think you are making a very good offer to settle this early. I cannot see why creditors would reject this. However I don't understand the Bankruptcy threat - if creditors reject your Bankruptcy variation you would simply continue paying on as you were. Bankruptcy is only a last resort if your breach/fail your IVA. Are you sure you are in an IVA and not a Debt Management Plan as the Bankruptcy threat would then make more sense?

[whitey130]

Thanks for the reply. Im def in an IVA, and I did think it strange that they would consider bankrupting me. The guy from Payplan said it wasnt a definite thing that they would look to bankrupt me, but just that it was a small possibility. Ive never failed on a payment so far.
As I said I cant see any benefit to them to do that and not take my money offer ?
I think I will therefore proceed with my offer...
Thanks

[Lisa Thomas]

Yes the choice is accept your offer or if they don't you simply carry on paying your contributions as you did before. It is a very good offer - I cannot see why they would be minded to rejected. To me it's a no-brainer based on what you have said. Good luck!

[Foggy]

Payplan always mention this, albeit remote, possibility,

[whitey130]

Oh ok....I didnt know that as he didnt say...
thanks

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Foggy

Payplan always mention this, albeit remote, possibility,

[Michael Peoples]

You need to go back to Payplan and demand to speak to the IP as this firm are funded by the banks and receive many referrals each month. You are entitled to proper advice when you are paying for a service which is what you are doing when you enter an IVA.

What you have been told is completely bizarre but not the first time I have heard it said by a Payplan client. Firstly, if the variation is rejected you just continue on as normal as Lisa has said and creditors cannot make you bankrupt. Why would they anyway when you are offering an early settlement?

If you were proposing a full and final settlement because of a change in circumstances and the original proposal would be in danger of failing then there is a remote possibility that creditors may ask for termination and bankruptcy.

Not for trying to pay it off early! Really strange comments from one of the banks' preferred debt advice companies.

[Foggy]

I am told that there is usually a reference to the possibility of BR in their variation documents, but, apparently, they are amenable to removing said clause(s) if asked.

[marathonman]

Do bear in mind that what you have paid so far doesn't really reduce what you owe until you hit 100p/£. If your plan were to go it's course you would pay a further 34 months at £111 (£3774) plus any equity that you have from your property.