Will our full & final IVA offer be accepted?

[gemma685]

Hello

Our original amount of debt was about £21,900.

We began our joint IVA in September 2018 and are paying £150 a month. The agreed amount to pay the creditors at the meeting was £9,739.

We have paid about £3,500 so far (have had about 3 months were we were allowed a payment break last year due to loss of income).

We’re expected to release about £8,407 equity in the 5th year.

If we make an offer of £13,000 for a full and final, would this be a good offer? This would be given to us from a family member

[Foggy]

So, you have paid around 18 months, less the break. With an equity extension of 12 months creditors will be expecting around 57 more payments at, currently, £150 --- a total of £8550. That is the figure they can bank on --- the estimated equity release figure of £8407 is not, by any means, a given. I am assuming that the equity figure actually quoted is an estimate and not a foolishly made promise.

If this were my IVA I would be looking at offering about £7 or 8K, and expecting it to be accepted, so your anticpated offer is likely to be snapped up.

[Foggy]

full-final-offer-t89112

[gemma685]

Hi Foggy,
The reason why we look to go for a higher offer is because a few months ago when I suggested £8000 as a F&F they said “we can put this forward however it is lower than the remaining term inclusive of equity and it will be up to creditors to agree to this but we can look to put this offer forward on your behalf”. So from that I am assuming I have to try and include some of the equity amount in the F&F?

[Foggy]

F&F offers make allowance for equity release by the addition of the 12 extra payments --- which is what would be added if it was impossible to release equity (which at the moment, due to the current pandemic and expected recession, is even more of a possibility --- indeed, have a look at the closing comments to this article: https://debtcamel.co.uk/coronavirus-new-rules-ivas/

Some IVA providers will push for as high an offer as possible due mainly to the fact that their fees are usually based on a percentage of what you pay in !! One firm in particular has recently been slammed in the courts for putting it's own remuneration above the interests of clients. However, I freely admit to being something of a cynic !

That all said --- from the creditors point of view, a higher offer has a better chance of acceptance !

[gemma685]

Thanks foggy, we’re currently looking at an offer of 12,000. I hope it’s high enough for them