IVA early settlement process

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leahcar
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by leahcar » Thu Jan 10, 2019 2:01 pm
My partner has been in an IVA since September 2018. The reason they got into debt was because of a gambling addiction. I am wanting to settle the IVA early for them. At the moment they currently pay £100 a month and the IVA is for 5 years. We received a letter from the IVA company to say that a variation meeting was to be held because one of the creditors had a statement of affairs balance of £3500 but has had a signed proof of debt admitted for £9800 so the total debt has gone up and the IVA was to be extended for 12 months however the meeting was adjourned. We rang the IVA company to say we wanted to settle the IVA early and they said they would cancel this variation meeting and arrange a new variation meeting for the early settlement offer to be considered.

I am planning on making an offer of £5500 because they have already made payments towards the debt. I have also written a letter explaining my partners circumstances and addiction at the time he got into debt etc.

Does anyone have any experience of this early settlement process or what creditors take into account when considering an offer? Am I right to base my offer on the amount he would pay over the five years or should I base it on if it was to be extended to six years?
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Foggy
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by Foggy » Thu Jan 10, 2019 2:39 pm
I would base the initial offer on the unextended (ie. current) term with the possibility of improving the offer if needs be ( don't mention that ).

Assuming that he isn't a home owner £5500 is all they would be expecting over the next 5 years and would be saving 4 years of admin costs, so the offer of a lump sum should prove very attractive. The creditors will not be interested in the reasons for getting into debt at this stage. This will already have been covered at the start. All they will base this on are the financials along with any compelling reason for finishing early, rather than how you got here.

You need to say that the money is from third party funds, for the purpose of a F&F only -- if rejected the funds will be retained by the donor and will not be available to the creditors. Keep the money in your account -- it will have to go to the IP direct from there. The IP will require proof of the funds (statements) as well as proof of your identity for money laundering purposes.
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leahcar
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by leahcar » Thu Jan 10, 2019 3:16 pm
Foggy wrote:
I would base the initial offer on the unextended (ie. current) term with the possibility of improving the offer if needs be ( don't mention that ).

Assuming that he isn't a home owner £5500 is all they would be expecting over the next 5 years and would be saving 4 years of admin costs, so the offer of a lump sum should prove very attractive. The creditors will not be interested in the reasons for getting into debt at this stage. This will already have been covered at the start. All they will base this on are the financials along with any compelling reason for finishing early, rather than how you got here.

You need to say that the money is from third party funds, for the purpose of a F&F only -- if rejected the funds will be retained by the donor and will not be available to the creditors. Keep the money in your account -- it will have to go to the IP direct from there. The IP will require proof of the funds (statements) as well as proof of your identity for money laundering purposes.


Thank you for your reply. He isn’t a homeowner. When would I mention that the offer could possibly be improved? Can the creditors come back with a counter offer or will they just accept or reject offers? Yes that’s what I mean sorry, I have put that down as a reason for finishing the IVA early the fact he suffers with severe depression and anxiety and has a gambling addiction. By having his own bank account with his full monthly wage going in it creates temptation to gamble.
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Foggy
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by Foggy » Thu Jan 10, 2019 3:56 pm
They can, but don't usually, come back with a counter offer for a F&F -- they either accept or reject. You can then come back, if they reject, with an improved offer to include that extra 12 months. If they get a sniff that you will pay the 12 months of course they will reject the first offer to get the better one.
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leahcar
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by leahcar » Thu Jan 10, 2019 4:11 pm
Foggy wrote:
They can, but don't usually, come back with a counter offer for a F&F -- they either accept or reject. You can then come back, if they reject, with an improved offer to include that extra 12 months. If they get a sniff that you will pay the 12 months of course they will reject the first offer to get the better one.


Thank you for your help.
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