So I am 38 months into my IVA. My debt initially was 19k and 15k went into the Iva as some creditors hadn’t submit(? From what I can see and recent info given) initially my payments were £235 a month making the total being paid back to be 14k something. I have now upped my payments due to a promotion and now pay £335 per month. In total I have paid £10, 365 with £7,035 left.
I asked the other day about a final settlement offer vs 100p to £ and there was a huge difference. They’ve asked for 14k for a 100p to £ offer… please see below;
“ I can give you an estimated figure for the 100p/£ calculation as not all of your creditors have admitted the amount of debt,
To reach 100p/£ with Fees on top the amount due would be £24,426.62, you have paid to date £10,365.00. The estimated total amount outstanding to teach 100p/£ would be around £14,061.62”
Anyway my dad had offered to pay a final settlement for me. This week I was told that due to an ankle fracture in July they have claimed full liability so I have a personal injury payout coming sometime next year (not sure on the amount yet) I’ve informed my IVA company. They’ve told me I am allowed to keep every penny when I can show them proof of funds etc. I won’t get a pay out until at least next September (so I’ll be entering my 5th year. I don’t own a house, just rent) By then I will only have £3.7k left of my Iva.
Would it be better making a final offer to the creditors at that point or would I have to do 100p to £? I really don’t know the difference and I’m struggling trying to work it out. If an offer is accepted by the creditors what’s the process then? Do you make additional payments to the Iva company?
Any help Is appreciated. It’s really pickling my brain lol.
I’m glad I told the IVA company about the claim and I’d like to thank previous post advice I’d read on here. It made me feel less anxious about calling them.
There are two common ways of ending an IVA,successfully, early: 'Settlement' and 'Full and final offer'.
A settlement is where you pay in a lump sum to cover the full debt and fees (and possible statutory interest). This is what you have been quoted for. Settlements are usually accepted by creditors.
A Full and Final Offer is a lump sum based on remaining payments to give creditors, in a nutshell, what they signed up for. Sometimes such offers are reduced a little to reflect early payment. This would need to be put to creditors for them to agree or reject the offer. In my experience, good offers are often accepted - creditors do not like being in IVAs either.
Assuming you are not a home owner and have a 60 month arrangement, you have 22 months left at £335 -- so £7370 left to pay. If you are a home owner it is usual to add 12 payments to the F&F offer in lieu of equity release.
IPs are often paid fees based on a percentage of the amounts paid into the IVA, so will prefer the settlement figure !! But it is for creditors to decide. The higher the offer, the better chance of success. Also any extenuating circumstances will help sway their judgement.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014