Want to Settle IVA Early

[mazalamar]

Hello All,

I currently have an IVA and have now completed 24 months of it - so 40% of the way through.

A friend of mine has offered to settle the IVA for me and I have some questions about how to proceed.

1. How should I word the email to the IVA Supervisor about wanting to settle - are there specific things I need to say/watch for?

2. I want to ensure that after settlement, there is no further come back, no poking around into my finances, no more questionnaires to fill in and most importantly that all of my creditors mark my accounts with them as settled - which I believe happens at the end of the IVA. Is there a specific way to ask for this.

3. Finally I want to know what the most appropriate figure would be to offer. IVA details as follows:

Total unsecured amount: £96559
Total IVA fees: £8225
Total Dividend to creditors: £22450
Total repayable: £30675
Total Paid to date: £9700

On this basis, the total amount remaining to pay is £20975. However, as the settlement would mean the IVA supervisor isn't doing any more work I was going to make a deduction meaning that the total payable in a settlement offer would be £16177.08 (basically the remaining dividend to credits plus fees for the IVA to date - which I think is fair).

Is there method in my madness? Would this work for the creditors - they're getting the full dividend 3 years early.

Does anyone have any thoughts on this? Anything I should watch for?

Thanks

Maz

[Viki.W]

Hey Maz, welcome to the forum. An expert will be along shortly to advise you. Viki X

[Lisa2009]

There would be no harm in putting that offer forward to your IP as i am assuming there is no equity release clause.

You will need to put the offer in writing to your IP with proof that your friend is willing to settle the IVA for you.

Make sure you tell your IP that the money will only be available if your offer is accepted and that your disposable income would them be used to pay your friend back.

There would be a charge for a variation meeting to be called, you should be able to find details on your chairmans report. The charge will simply be drawn from the dividend and not directly from your pocket.

Once an IVA is settled you will recieve a certificate of completion which your supervisor will also send to the credit reference agencies to notify them that the IVA has been completed satisfactoraly.

Hope this helps

[mazalamar]

Hi,

Thanks so much for the response. I don't own a property - I'm renting a room in my friends house.

Will there be any intrusion into my affairs after settlement? The reason I ask is that if I won the lottery the week after settlement (I obviously plan to - but its highly unlikely!) - would the IVA supervisor be able to come back and ask for more?

[Lisa2009]

Im not sure but i think i have read on the forum that sometimes windfalls still have to be handed over up till the 5 years has ended. I could be wrong on that and im sure someone will correct me if i am.

On hubbys variation report there was no mention of windfalls after the IVA was settled so i am assuming thats the end of it.

There will be no further need to check your bank statements and such like and your income will be yours after you have paid your friend back.

[mazalamar]

What about things like increases in income or property purchases? If I get on the property ladder - will they have a claim over that?

[Lisa2009]

No, i believe not.

[Jinx]

As I understand it... Windfalls have to be declared to your IP whilst in your IVA. Once the full & final settlement figured has been accepted it does exactly what its says on the tin. It is full & final. So If you were to win the lottery... after you'd lent me a couple of grand the rest would be yours!

[MelanieGiles]

I would suggest a figure of £17,500 would be more reasonable, to allow for the additional costs your IP will incur in putting the offer forward - of course they will then no charge fees for the remaining unexpired time.

If you do receive a windfall after the full and final offer has been accepted, but before your IP closes your case then you will still have to hand it over.

[acsn]

Remember even if your F & F is accepted by your creditors and the IVA marked as completed and most of your creditors can be persuaded to mark the defaults with settled or partially settled it all still going to sit on your credit file for six years, at least, from the start of the IVA and the posting of the defaults.

You are unlikley to be able to obtain mainstream credit, loans , credit cards, mortgages ect. for between 6 and 10 years after an IVA or a default was marked on your credit file. Sorry but creditors don't take too kindly to not getting all their money back.

So unless it's purely to get rid of your IP and the monthly IVA payment you really don't have much to gain.

I would have thought, personally your friend would be better off investing the money and giving it to you in 3 years when the IVA has concluded.

Others may disagree

[Adam Davies]

Hi
I would advise ending your IVA early if you can.You never know what is around the corner.
Melanie's figure is a good one,as Mrs Skint states you will have the cost of a variation meeting.Your IVA will only finish once all creditors are paid,you receive your completion certificate and your name is off the insolvency register.
My own F+F took approx three months to conclude after the monies were paid over,but during that time you are still under the terms of the IVA so any windfall etc would be payable into your IVA.
Regards

[flozza]

HI Andy,

I have just read the post regarding an early settlement and I myself, am currently trying to do the same.

Will the unclaimed amount by creditors be taken in to account when offering a F&f figure?

The lump sum I am tryng to introduce into my F&F is from my mother plus monies paid to date. Unfortunately it works ou at around 26-27% of the original didvidend that was 33% until all of the unforeseen circumtances that have taken place during my IVA. My property is on the market and has been for over 10 months with the price reduced a number of times. My IP however, has asked if I would like to put forward the less settlement amount any how, as the house is not shifting. The difference from a sale compared to a limp sum available in 10 days is around £2000 approx.

I have ben having a superb amount of advice from Ian Millington, but just thought I would get involved with the post relevant to me.

I'm just waiting for a letter from my mother's broker as confirmation.

Any advice would be appreciated.

Thank you

[mazalamar]

Hi Everyone,

Thanks for the info. I'm going to offer them a F+F. I have a couple of other questions:

1. Will my name be removed from the Insolvency Register when I complete the F+F or full it stay there until the end of the five years?

2. As I understood it, if I had gone the whole way with the IVA I would continue to have a bad credit rating for a further 1 year - so 6 years of not being able to get credit and then starting again with a clean record. Is that right?

3. Finally, why does F+F take so long? I would have thought it would be a case of pay over the money, get the certificate and walk away. What processes need to go through?

Thanks

Mario

[Adam Davies]

Hi Flozza
When a house is involved it is not so simple,however with the current housing climate I would anticipate that your creditors will accept a slightly reduced dividend
Regards

[Adam Davies]

Hi Mario
1] Your name will be removed straight away from the Insolvency register once your F+F is concluded
2] The fact that you settled earlier than the usual 5 years will have no affect on your credit record.You will still find obtaining credit near impossible until 6 years from your original IVA start date
3] Your IP will prioriise new cases and yours will be towards the bottom of the paperwork pile.
The IP has a fair amount of work to do in concluding an IVA,so three months is probably not unreasonable.
I'm sure Melanie will have a view on this
Regards