Early settlement

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Donna29
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by Donna29 » Fri Aug 25, 2017 6:28 pm
How much should be offered as an early settlement?
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Foggy
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by Foggy » Fri Aug 25, 2017 6:35 pm
Hi. Do not use the term "settlement" --- that means pay the full debt and fees. What you are after is a "Full and Final Offer", which is based upon the number of payments left multiplied by the current monthly amount ( if there is equity to be addressed you might need to add in an extra 12 payments).

This will give you the base figure -- this can be rounded down slightly to allow for the savings in administration being made as well as the fact that they are getting their money early.
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admin
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by admin » Fri Aug 25, 2017 6:54 pm
Received multiple questions from different pages
On behalf of Donna:

Hi,

I'm thinking of offering an early settlement figure for my IVA. I currently pay £155 per month and my IVA is due to end in May 2020. My creditors are expecting £4,917 if my IVA was to run for the full course and my circs stayed the same. Is an early settlement offer likely to be accepted? What would be considered a reasonable offer?

Would potential changes to my circumstances in the future have an impact on the decision - for example, my husband and I will be starting a family soon therefore this would have an impact on my monthly payments for the remainder of my IVA - would they consider themselves to be better off accepting a settlement figure now, than risk getting less than the current expected amount by the end of the IVA term?
Donna29
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by Donna29 » Sat Aug 26, 2017 9:11 am
Thanks!

Where they ask - what is the reason for the offer at this time? - what sort of thing would they consider to be reasonable?

A family member is considering whether to make a full and final offer as a gift so that I can start to repair my credit score so that we can look to buy our own house in a few years time. We'll also be looking to start a family soon and this will likely mean that my IVA payments would not continue at the current amount- I'd personally rather get the IVA over with to move forward. Is this something they would consider?

The amount they are currently expecting for the remainder of my IVA is just under 5k.


Foggy wrote:
Hi. Do not use the term "settlement" --- that means pay the full debt and fees. What you are after is a "Full and Final Offer", which is based upon the number of payments left multiplied by the current monthly amount ( if there is equity to be addressed you might need to add in an extra 12 payments).

This will give you the base figure -- this can be rounded down slightly to allow for the savings in administration being made as well as the fact that they are getting their money early.
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Foggy
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by Foggy » Sat Aug 26, 2017 9:20 am
Hi Donna. The strength of your reasons can dictate the amount you need to offer ( within reason). The wish to get on with your life and relieve the stresses an IVA is causing you is an acceptable reason and, if you are offering near the full amount of expected payments ( so the creditors are getting what they signed up for) the creditors would look at this seriously -- after all, they want out too !!

Coming out early will not improve your credit score to any great extent as the IVA will be on file for the full 6 years from the start, regardless and a mortgage while it is there would be problematical --- but, on the plus side, no IVA payments means you will be able to save more for deposits / furnishings etc.
Donna29
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by Donna29 » Sat Aug 26, 2017 9:34 am
Ok great, thank you. I've been sent 'Early Settlement' paperwork from my IVA company - should I ask for 'Full and Final Offer' paperwork instead - would it be different?

Foggy wrote:
Hi Donna. The strength of your reasons can dictate the amount you need to offer ( within reason). The wish to get on with your life and relieve the stresses an IVA is causing you is an acceptable reason and, if you are offering near the full amount of expected payments ( so the creditors are getting what they signed up for) the creditors would look at this seriously -- after all, they want out too !!

Coming out early will not improve your credit score to any great extent as the IVA will be on file for the full 6 years from the start, regardless and a mortgage while it is there would be problematical --- but, on the plus side, no IVA payments means you will be able to save more for deposits / furnishings etc.
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kallis3
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by kallis3 » Sat Aug 26, 2017 9:36 am
Definitely full and final!
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Foggy
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by Foggy » Sat Aug 26, 2017 9:40 am
Donna29 wrote:
Ok great, thank you. I've been sent 'Early Settlement' paperwork from my IVA company - should I ask for 'Full and Final Offer' paperwork instead - would it be different?

Foggy wrote:
Hi Donna. The strength of your reasons can dictate the amount you need to offer ( within reason). The wish to get on with your life and relieve the stresses an IVA is causing you is an acceptable reason and, if you are offering near the full amount of expected payments ( so the creditors are getting what they signed up for) the creditors would look at this seriously -- after all, they want out too !!

Coming out early will not improve your credit score to any great extent as the IVA will be on file for the full 6 years from the start, regardless and a mortgage while it is there would be problematical --- but, on the plus side, no IVA payments means you will be able to save more for deposits / furnishings etc.



They could know what you actually intend, but, for the avoidance of doubt, make sure they understand that you wish to make a Full and Final offer. A settlement is usually taken to mean repayment, in full, of the original debt and fees and often includes statutory interest, which will be a lot more than the payments due under the terms of the IVA.
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Lisa Thomas
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by Lisa Thomas » Tue Aug 29, 2017 1:54 pm
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kallis3
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by kallis3 » Tue Aug 29, 2017 3:23 pm
Hope you manage to get it sorted - keep us informed.
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