Lump sum offer = full and final settlement v annulling the IVA

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GottaGetThruThis
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by GottaGetThruThis » Wed Dec 20, 2017 2:27 am
Can one annul an IVA similar to cancelling an undischarged bankruptcy?

If during it you receive funds that can pay off the total debt (and not make a full and final offer to settle the IVA), would that give access to regular (as opposed to adverse) mortgage rates?

Would that remove your insolvency from record?
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kallis3
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by kallis3 » Wed Dec 20, 2017 8:29 am
If you fail your IVA you will be back to square one and may well have interest and charges added back on. It will stay on your credit record for six years regardless.

If you receive any funds you will be expected to pay some or all of it across to your IVA.

Where would these funds be coming from?
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Foggy
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by Foggy » Wed Dec 20, 2017 9:00 am
If you pay off the debt in full the IVA will cease, but will remain on file for the full six years, it will not be "anulled".
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Lisa Thomas
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by Lisa Thomas » Wed Dec 20, 2017 9:59 am
It wouldn't be annulled - it would simply finish earlier than originally expected. You would get back control over your finances but credit record still damaged until the 6 year anniversary passes.

Bankruptcy annulment treats the Bankruptcy as having never occurred.
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Shaun Vickery
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by Shaun Vickery » Wed Dec 20, 2017 12:41 pm
Unfortunately it wouldn't give you access to prime high-street rates even if were settled as it will show on your credit file for 6 years. That said, there are other lenders who may consider an application, depending on your other circumstances and, in particular, your deposit. The longer since the IVA is settled the easier it will become generally but the real watershed is the 6 years since registration.
GottaGetThruThis
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by GottaGetThruThis » Wed Dec 27, 2017 1:37 am
Lisa Thomas wrote:
Bankruptcy annulment treats the Bankruptcy as having never occurred.


To annul a bankruptcy do you have to pay everything back in one go or can you agree a DMP / propose an IVA? In effect does petitioning for bankruptcy ever buy you time?
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Lisa Thomas
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by Lisa Thomas » Wed Jan 03, 2018 3:17 pm
On an application for a payment in full you need to show the Court that you are in funds to pay off or provide security to cover the total debts and costs and interest of the Bankruptcy.

Why are you hoping to annul it? What will you achieve?
GottaGetThruThis
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by GottaGetThruThis » Wed Jan 03, 2018 10:49 pm
Lisa Thomas wrote:
On an application for a payment in full you need to show the Court that you are in funds to pay off or provide security to cover the total debts and costs and interest of the Bankruptcy.

Why are you hoping to annul it? What will you achieve?


Hi Lisa
Thanks for the detail. Would this be done through an IP or solicitor or can the debtor or a third party approach the court/OR directly?

There is a good chance of raising funds to cover all owed monies but it'll only be in the summer. There is also a question as to what extent the court would want to see source of funds as it's an overseas relative who is willing to help financially but not to be personally involved/scrutinised.

So my question about buying time is really "how do you buy breathing time from creditors taking action against you while you are waiting to find out if a third party offer is available?"

IVA/BRC offer legal protection but strongly affect your credit file, whereas a DMP or token/pro-rata payments wouldn't be as bad on file but could still incur defaults and CCJs if any creditor didn't agree.

Starting but then F&F ing an IVA would leave the IVA on file for 6 years but a petitioned bankruptcy then annulled upon receipt of funds would presumably be off file immediately?
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kallis3
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by kallis3 » Wed Jan 03, 2018 11:38 pm
Unfortunately a company would need details of where the money is coming from. It's all to do with money laundering.
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Foggy
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by Foggy » Thu Jan 04, 2018 9:16 am
On the basis of a potential lump sum arriving, ask creditors if they will freeze interest and accept reduced payments on a pro-rata basis for the next 6 months, then pay them off from the lump sum.

As Kallis intimates -- I cannot see a court accepting a lump sum from an undeclared overseas source without needing to verify it's origins.
GottaGetThruThis
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by GottaGetThruThis » Thu Jan 04, 2018 2:05 pm
Foggy wrote:
On the basis of a potential lump sum arriving, ask creditors if they will freeze interest and accept reduced payments on a pro-rata basis for the next 6 months, then pay them off from the lump sum.


Thanks Foggy. This seems to be the only option that would not cause 6 years of credit purgatory, so I'll get in touch with creditors and will see what they say. I've got letter templates from this site, National Debtline and NE Derbyshire CAB - is a request like this more likely to work in writing rather than on the phone, or should the outcome be the same regardless of method of communication?

Are they still within their rights to issue defaults every time I pay less than the contractual agreement? Would they also be able to issue CCJs? If this is the case, would defaults (or CCJs) be better (tolerable, even) for my file than formal insolvency (starting an IVA) when there is a chance of being able to pay back everything in June?
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Foggy
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by Foggy » Thu Jan 04, 2018 2:19 pm
GottaGetThruThis wrote:
Foggy wrote:
On the basis of a potential lump sum arriving, ask creditors if they will freeze interest and accept reduced payments on a pro-rata basis for the next 6 months, then pay them off from the lump sum.


Thanks Foggy. This seems to be the only option that would not cause 6 years of credit purgatory, so I'll get in touch with creditors and will see what they say. I've got letter templates from this site, National Debtline and NE Derbyshire CAB - is a request like this more likely to work in writing rather than on the phone, or should the outcome be the same regardless of method of communication?

Are they still within their rights to issue defaults every time I pay less than the contractual agreement? Would they also be able to issue CCJs? If this is the case, would defaults (or CCJs) be better (tolerable, even) for my file than formal insolvency (starting an IVA) when there is a chance of being able to pay back everything in June?



Basically, what you are doing is a DIY DMP and it would be better in writing, with a SOA detailing your reasoning and breakdown of how you arrived at disposable income and it's distribution amongst the creditors. The more professional and proactive the better. If you phone you could get some operator on a bad day who will just say no for the hell of it.

They are still within their rights to issue a default --- but are more likely to just report the account as in arrears for the months affected.Not good on the credit file, but better than a default, CCJ or formal insolvency being recorded. They could issue a CCJ if they deemed it worthwhile, but are unlikely to if you have a agreement in place ( another good reason to do it in writing ).
GottaGetThruThis
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by GottaGetThruThis » Thu Jan 04, 2018 2:28 pm
Foggy wrote:
Basically, what you are doing is a DIY DMP and it would be better in writing, with a SOA detailing your reasoning and breakdown of how you arrived at disposable income and it's distribution amongst the creditors. The more professional and proactive the better.


Then I will write. Thank you.

When I did the Stepchange Debt Remedy tool there was a note about never telling a creditor your W number as then they could see your I&E and names and balances of creditors. So when writing to creditors with a DIY DMP like this, would it be a good idea to redact the names of other creditors? I.e. each SOA/DMP would only show the name of the creditor it is addressed to, and say [redacted] for all the others?
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Foggy
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by Foggy » Thu Jan 04, 2018 2:42 pm
GottaGetThruThis wrote:
Foggy wrote:
Basically, what you are doing is a DIY DMP and it would be better in writing, with a SOA detailing your reasoning and breakdown of how you arrived at disposable income and it's distribution amongst the creditors. The more professional and proactive the better.


Then I will write. Thank you.

When I did the Stepchange Debt Remedy tool there was a note about never telling a creditor your W number as then they could see your I&E and names and balances of creditors. So when writing to creditors with a DIY DMP like this, would it be a good idea to redact the names of other creditors? I.e. each SOA/DMP would only show the name of the creditor it is addressed to, and say [redacted] for all the others?



You could redact, but I see no real reason why you would need to hide your other creditors. To be honest, if I were a creditor myself, I would want the full information before making my decision, so that I could ensure I was a) getting the full picture and b) getting a fair pro-rata payment. If you wished to keep the identities of other creditors to yourself, I would not offer a redacted SOA, but would simply say something along the lines of "My outstanding debt with you is £x and I propose a monthly payment of £x" and leave the rest to their imagination, rather than tickling that imagination.
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kallis3
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by kallis3 » Thu Jan 04, 2018 3:05 pm
Agree with Foggy.
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