What is a full and final settlement?

[poppy]

I have seen this crop up on the site a few times but not sure what it is.

Am I right in thinking that if you have been in an IVA for over a year and someone offers to lend you money to clear your debt, the creditors may take a lump sum which could be a few thousand less than the total you would pay back if you stayed in an IVA?

[MelanieGiles]

You have always got the opportunity to offer a lump sum settlement Poppy, so long as you are able to maintain the dividend originally pledged to creditors - and of course this will require creditor agreement at a further creditors meeting.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[poppy]

Thanks Melanie. So you would have to pay the full cost of the 60 month IVA in a lump sum for it to be accepted? Sorry if I am being thick!!

[MelanieGiles]

Not necessarily - and you are not being thick!!!

You simply need to offer a sum equivalent to that which is required to effect the dividend originally pledged to creditors - so you may find there are some savings because the supervisor's fees will be reduced if they do not have to supervise the arrangement for so long.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[poppy]

Ahh I see!! I will keep my fingers crossed that some rich man sweeps me off my feet and pays it all off for me........a girl can dream...

Thank you Melanie!