Early settlement advice please.

[its_john]

Hi,

I'm in a fortunate position in that I may be able to offer an IVA settlement from 3rd party funds. I've done my research and know a bit about the subject but would appreciate advice on the following:

1. If my creditors decline to accept my settlement offer would that be the end of it or would they give an indication as to what would be an acceptable amount to settle it ?

2. Do my creditors make their decision based simply on the amount that I offer and my reasons for wanting to settle early or do they also do a review of my finances - wage slips, bank statements etc.

Advice greatly appreciated.

John

[kallis3]

Hi John and welcome.

I think your IP will give you a good indication as to what would be accepted by the creditors. They usually look for something as near to the original dividend as possible.

Yes, they will want to know the reasons why you want to settle, and you will need to specify where the funds will be coming from. You should also stipulate that the money is only available for a full and final.

I don't think they do a review, but not sure about that.

One of the professionals will be along later to answer the question more fully.

[its_john]

Hi Jan,

Thanks for your welcome and your prompt reply.

I've been in touch with my IP and they won't commit on what they consider acceptable other than somewhere near the original dividend, which is £17 K.

The problem is that I can't raise that sum and there seems little point offering a settlement if it's going to be declined by my creditors.

Am I right in thinking that it's not in my IP's interest to settle early as it would reduce the amount they make on the IVA ?

John

[David Mond]

John, Your IVA is a contract that your creditors have agreed to accept £17k over 5 years.

How long have you been in your IVA?
How much have you paid in?
Where is the lump sum you wish to offer coming from?
What is the amount you would like to offer?

Your last comment is not right as the IP would be entitled to his full fee irrespective of whether the case is settled earlier or not (subject to the wording of the Proposal) and also the IP might be prepared to discount his fees - my firm does!

[its_john]

David,

Thanks for the prompt advice, I wish my IP was as quick to reply !

My IVA was for £19 K, I'm 7 months into it and have repaid £ 2 K.

The lump sum will come from a family member who I will repay. It's in my interest to settle with the least amount possible as I will have to repay it but I am trying to be realistic about a figure which my creditors will find acceptable.

That said, I can't raise the full £17K. It would be around £12 K and there are reasons for wanting to settle early.

John

[David Mond]

I think that £15k should do the trick - who is your IP?

[its_john]

I'm with Debt Free Direct.

[its_john]

David,

Part of my initial query was if I made a settlement offer to the creditors and they declined it would they quote a figure they found acceptable or simply decline it and wait for a potential better offer from me ?

[David Mond]

Creditors don't suggest any figure and it is by discussion with your IP as to what is reasonable. Your case is such that it is a new IVA and you now want to settle it on much less favourable terms.

You need to explain why and have cogent reasons to try and settle - unless there are compelling reasons it is difficult for crediors to accept anything less than what I suggested.

[its_john]

David,

Thanks again for the advice.

John