www.iva.co.uk

My parents have offered to lend me some money to offer a lump sum as F&F, so long as not too much. I've got no good reason for finishing early (i.e. pregnancy) other than it has been a struggle over the last 2 years, and I've already had to borrow quite a bit off my parents to subsidise month on month living expenses. I will obviously appraoch my IP (Payplan), but I just want to put out some feelers, coz I've got loads of questions..

My total debt was £28,800. Creditors promised 26p/£, based on 60 payments of £200. I am 20 months in, and want to make an F&F settlement in June when I hit 24 months (my proposal said no varitions in first 2 years). IS IT TOO EARLY TO START MAKING ENQUIRIES, for a June settlement?

I've had the first annual report, as follows:

Payments - 12 x 200 = 2400
Nominee fees 1050 + VAT = 1233.75
Supervisor fees @ 20% + VAT = 564
Disbursements (inc 2years life ins/room hire/BR contingency) = 380.70
Total contribution to creditors in year 1 = 221.55

Obviously not had second annual report, but expect
PAyments - 12 x 200 = 2400
Supervisor fees @ 20% +VAT = 564
Disbursements - 120 (at most I think)
Total contribution to creditors in year 2 = 1716

NB I have no equity release clause - I live in rented accommodation.

So after 2 year will have contributed approx £1938. If creditors were to receive 26p/£, that would be 7488. Minus what already paid = 5550 remaining. My proposal state that Supervisor will only get 10% + VAT of any lump sum, so add another £652. Takes me to £6202. I assume the disbursements for banks charges and life insurance would be waived for years 3-5?

If I upped dividend to 28p/£, that would be total £8064. Minus what already paid = 6126. Plus 10% + VAT = 6845.80.

My parents are willing to lend me £7000. Would this be enough to offer as an F&F. Would the IP charge extra for the variation meeting, or will this be taken out of the final 10% on the lump sum?

Sorry this is a massive post, but wanted to give you all the info.

Amy

1 No it is not too early to start the ball rolling
2 Regarding fees you will need to ask your IP or read the proposal and Chairmans report (for the modifications).
3 Why offer more, money now is better than money at some point in the future. Although saying that it might be worth staying above the 25p/£.

Thanks for your reply abc, sometimes just sounding things out helps. Thought I might offer a higher dividend as per Andy's article stating that this may make it more appealing to creditors. Especialy as the reason for F&F is not reduced future payments through pregnancy or job loss.

Not sure I fully agree, you can offer the same or slightly less and they are techinically better offer than waiting for three more years. You also take the uncertainty away that your IVA might fail during the next three years.

I see what you mean. I have to admit, by offering £7000, that is only £200 less what the IVA would pay out anyway (another 36 payments at £200), so IP fees not really been reduced. Hopefully Melanie (the font of all knowledge) will give me an IP's take on this

I am an IP!

Now that is good to know! Thanks for your advice again abc. Am awaiting a reply from my IP, but I'm glad you think it is a reasonable offer, when you're in the know! Hope I didn't offend in my ignorance.[:I]

Amy

Not a problem. Good luck.

From another IP's perspective, I feel that you ought to offer a sum equivalent to the original dividend and no more. I frequently get cases accepted on this basis, and the money is coming from a third party - but at the end of the day if you are comfortable paying more than I am sure that creditors will not turn you down.

Thanks abc and Melanie

I have just spoken to my dad again, and he too thinks that I should just offer the 26p/£, as this means they will be getting what they expected, but 3 years early, and it gets rid of the risk of my IVA failing.

Also I've just worked out that MAX Recovery now own 64% of my debts, which were probably bought at much less than 26p/£, so this should go in my favour right?

Max Recovery love the offer of an early settlement, as they probably paid nothing like 26p in the £ for the debt, and will therefore make a much quicker return on their investment.

Good luck!