I'm 16 months into a 5 year IVA making payments of £125 for the first 20 months and £150 for 23 months. Unfortunately due to COVID 19 I will be made redundant at the end of July and will receive approx £16,000 in redundancy pay. I contacted my IVA company and as this a windfall I will be required to pay the full amount of the IVA which as it stands including their fees is £16,550 the original total debt is £12,751 and the agreement was to pay £8,500 over 60 months and they will right off the rest of the debt. I am a single parent and this will leave me destitute as I am due to have a major operation (Crohn's Diease) in July/August and really will not be job ready until Oct/Nov this year. I was thinking of putting an full and final offer of £8613.04 to my creditors (full payment minus 15 months of payments plus IVA fees). Can I offer this to them?
You can offer it, but, with the redundancy in their sights they may well refuse. Labour the health problems (Crohn's, I believe, does not react well to stress --- which, with the IVA, single parenthood and redundancy will flare up!).
What should happen, assuming you have the usual clauses, is, out of the redundancy payment you are allowed to keep the equivalent of 6 months salary and hand the rest over to the IVA. From the money you keep you continue to live as before, as well as continue with the agreed IVA payments. When the 6 months is up, if you have still not found work, or are not recovered, you can ask for a payment break (which will be added back on at the end). Hopefully, by the time the payment break is up you will be back in work.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I really would like to pay this off (so I can get on with my life debt free) and the debt is not usual debt as in credit cards etc. The payments will be going to two government bodies (Who do not need to money!!) so what amount should I put forward? Do you suggest I pay in full? I would really appreciate the advice.
It is difficult because you are bargaining with money that they would be getting anyway, whilst allowing the IVA to continue.
On a 12.75k debt you would be looking at paying in around £3.5 k in fees -- so £ 16250 -- which makes their figures sound about right.
Bear in mind, also, that paying off the IVA will reduce any money you have in hand, but benefits might assume you still have this money (they don't like you spending it, even on debt repayments), so this could reduce the benefits you might be entitled to. You need to check this aspect out first.
You could try the offer .... they can only say no, and they might say yes -- especially with the health and stress factors along with the fact that none of this is your doing in the current pandemic mess.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Bear in mind that you will be required to shield for 2 week prior to surgery and for 2 weeks after.
You need to make sure that you have money available/access to support during that period.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
