Do I need the loan before offering a settlement?

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becci320

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Post by becci320 » Sun Mar 01, 2020 10:44 pm
Hi,

I have been in my iva since August 2017 and am halfway through my arrangement. My parents have kindly offered to take out a loan to pay off the remaining £7500 I have left to pay.

My mum has an excellent credit rating and would almost certainly be accepted for the loan. However, I am terribly nervous about her taking this loan if there's a chance the creditors wouldn't accept my F&F offer. Would my mum need to get the loan before the creditors meeting or could I wait for the offer to be accepted before she applies? I am intending to offer the full amount left on my agreement.

Thank you in advance for any advice.

Foggy

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Post by Foggy » Mon Mar 02, 2020 8:05 am
Before asking creditors for a variation the supervisor must ensure funds are available, so the loan must be in place when you make the offer. As long as the loan has no early repayment penalties she could simply pay it back if the offer is refused, costing a months interest or so .... but check with the lender that this is in order.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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SteveUK

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Post by SteveUK » Mon Mar 02, 2020 1:10 pm
Why would you want to swap paying back £7.5k for paying £7.5k plus interest?

Foggy

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Post by Foggy » Mon Mar 02, 2020 1:24 pm
SteveUK has a point. But, of course the interest over the repayment period might be offset by the fact that you are free of the IVA and it's obligations.

I would mention though that many F&F offers are rounded down a little to reflect savings in admin as well as time for the creditors, so you could offset some of the interest that way and offer a lower figure. Obviously the higher the offer, the better chance.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

becci320

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Post by becci320 » Mon Mar 02, 2020 1:42 pm
Thanks Steve and Foggy for your replies.

I know it seems counter-productive, but the iva is very limiting. I have just been offered a promotion at work whereby I will be receiving commission which would then be taken, in part, by the iva... so it is more sensible to swallow the interest and keep my commission I'll be receiving.

Called my advisor this morning and they have outlined what I'll need to do, so I'll keep you posted

Thanks again

Lisa Thomas

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Post by Lisa Thomas » Tue Mar 03, 2020 4:29 pm
Get the variation approved first.

An offer of maybe £6k might be considered seriously.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
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