Lump sum payment doubts

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amie
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by amie » Mon Jun 12, 2017 6:45 pm
I'm currently 9 months into a 72 month IVA arrangement paying £100 per month (£2567 in IVA fees and £4633 to creditors), leaving £6300 left to pay total. My circumstances have changed and I am struggling financially now. My parents have offered to gift me £4000 in order to pay and settle my IVA. Three questions:

Is it likely an offer of £4000 will be accepted? How much if this would go to the IVA company and how much to creditors?

Does a modification in my contract stating "no variation meeting called in first 24 months which will lower the dividend available" apply to lump sum payments? And if I can't afford the £100 a month 9 months in will my IVA fail?

Thanks.
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Foggy
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by Foggy » Mon Jun 12, 2017 6:52 pm
So -- with the payments left your creditors are expecting £6300 more to be paid into the IVA -- due to the clause you agreed to this cannot be reduced in the first 24 months, so your F&F offer would have to be £6,300. It matters not how this is divided between IP and creditors as this has already been agreed by the creditors.

You could ask that they remove the modification to allow a lower offer -- but I wouldn't hold out much hope as it ia obviously a creditor with the voting power who got this put in in the first place ... but, maybe, they will change their minds.

If you cannot pay going forward the IVA will fail.

How much were your total debts ? Do you have any assets ?
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amie
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by amie » Mon Jun 12, 2017 6:59 pm
Total debts were £24,000 and I have no assets
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Foggy
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by Foggy » Mon Jun 12, 2017 7:26 pm
amie wrote:
Total debts were £24,000 and I have no assets



Ah -- too much debt -- if it was less than £20k I was thinking a Debt Relief Order would have been better, if you could have got the disposable income below £50 per month.

Is there any reason you rejected bankruptcy ?
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amie
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by amie » Mon Jun 12, 2017 7:35 pm
Taking out the IVA was a difficult decision but necessary, I felt bankruptcy was much more extreme then I wanted to go plus I did Feel that I should pay back as much of my debt as I could which I could do through the IVA.
But my circumstances have changed which wasn't foreseen 9 months ago meaning my budget is much tighter and finding the £100 is going to be extremely difficult. I'm currently at my 1 year review when this will all be processed officially and I've been a bit worried/stressed which is why my parents have offered the lump sum but I don't think they will have the whole £6300 and I don't have anything myself right now to top it up
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amie
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by amie » Mon Jun 12, 2017 7:40 pm
I did read one article which said sometimes creditors accept lower amounts in a lump sum as they're getting the money now instead of over 6 years?
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Foggy
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by Foggy » Mon Jun 12, 2017 8:02 pm
amie wrote:
I did read one article which said sometimes creditors accept lower amounts in a lump sum as they're getting the money now instead of over 6 years?



They often do accept lower lump sums, to get money up front. They also save a bit on administration over the years. However, most do not have that modification which basically stops you making a lower offer. You need to see if they will agree to take that modification back out.
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Michael Peoples
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by Michael Peoples » Tue Jun 13, 2017 8:07 am
Foggy is right in that this will need the approval of creditors to remove the modification. It should not be too much of a problem and your IP should be able to explain how it works.
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Lisa Thomas
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by Lisa Thomas » Wed Jun 14, 2017 8:59 am
Prove that your net income has dropped to your IP and make an offer based on the lower payments.
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