Early settlement of an IVA ?

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Liz.mk
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by Liz.mk » Sun Feb 05, 2012 6:53 pm
Hi there, was just wondering about repaying an iva? Our total debt going into the iva was £25k and our monthly repayment is £208 so a total of £12480 to be paid by the end of the iva. We have been offered £12k by a family member trying to help us out so my question is this: Would the £12k be taken off our original £25 debt meaning we pay it off earlier eventually? My understanding is that there is no such thing as an early settlement figure in an iva, its the full original debt or completion of 5 years iva. Is that correct?

many thanks for your help.

 

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nepensioner
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by nepensioner » Sun Feb 05, 2012 7:00 pm
Hi Liz, welcome
How long have you been in your IVA?

 

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Foggy
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by Foggy » Sun Feb 05, 2012 7:02 pm
Hi Liz. Yes, you can certainly offer to pay a lump sum in full and final settlement. Usually you would be looking at offering as near to the anticipated dividend as possible. According to the circumstances, sometimes a lesser amount is acceptable, say, if the reasons for wanting to end early are pressing -- ill health, unemployment or somesuch.

Basically, the creditors have agreed to accept the dividend as settlement. To get it early is a bonus for them.

 

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lizthemeerkat
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by lizthemeerkat » Sun Feb 05, 2012 7:31 pm
Hi, thanks for your replies. Its actually my husbands IVA and he has only been in it for a matter of months, maybe 2 or 3. The offer of help from family is fantastic but just a little too late! So, just to be sure I understand, if the sum his creditors would have got through the IVA is 12400 and we were offering more or less that figure they may acccept? are there not fees we would have to pay? Would it still stay on his credit file for 6 years?

Many thanks for your help, much appreciated!
Liz

 

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luluj
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by luluj » Sun Feb 05, 2012 7:34 pm
There is no harm in offering this amount to his creditors, although I would make sure it was known that this money from family is ONLY available for the purpose of a F&F to conclude your husbands IVA otherwise you will not have access to it.

Good luck and let us know how you get on.

 

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Foggy
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by Foggy » Sun Feb 05, 2012 7:40 pm
I would think it stands a very good chance of being accepted. There will be a fee for the variation, but this shouldn't bother you as it is taken out of the payment, by agreement with the creditors.

I am afraid the IVA will remain on file for 6 years from the start date, even if finished early.

 

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lizthemeerkat
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by lizthemeerkat » Sun Feb 05, 2012 8:06 pm
Thanks again for the answers!

I guess the advantage to us then would be that I would feel happier giving money every month to family rather than our IP? I may not have grasped all the info they sent correctly but I feel that any attempt we make to improve our financial situation and dig our family out of this hole we are in will be taken away by our IP. For example, I would like to start part time work from home or we could rent somewhere smaller and therefore cheaper to pay off the debts that are in my name. But then they will up our monthly repayments I think.

Oh if I could go back 3 years and ban all credit cards in our household!! Neber mind, Onwards and upwards. [;)]

 

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Foggy
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by Foggy » Sun Feb 05, 2012 8:40 pm
Yes, there are advantages, as you say, any extra money you manage to earn will be all yours, as will any lottery win, if you are lucky enough to have one.

 

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flowerpot
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by flowerpot » Sun Feb 05, 2012 9:08 pm
We would love to repay ours early too so we can start to repair our credit file asap.
Good luck, hope all works out for you.
xx

 

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plasticdaft
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by plasticdaft » Sun Feb 05, 2012 9:13 pm
Can I ask how the debts came about?

Paul

 

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lizthemeerkat
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by lizthemeerkat » Sun Feb 05, 2012 9:20 pm
Flowerpot, well that was what we were thinking. It seems it may not repair our credit for quite a long time still but at least we will feel like we are working towards something!

Best of luck!

plasticdaft,
Through inability to manage money through some difficult situations would be the honest answer. I suppose mainly through me being ill and in and out of hospital for several months so hubbys overtime dropped right off and the credit cards took the brunt of the bils and also a series of cars that either blew up or just stopped moving and had to be replaced. They are the main two.

 

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mummy1
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by mummy1 » Mon Mar 05, 2012 6:21 pm
Hi.I am considering helping my daughter try to end her IVA early - did you make a F&F offer of £12,000 and if you did was it accepted. My daughter's figures are much the same as you quoted and I'd like to know if it's worth trying to make a F&F offer? Thansk
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