iva

[ianb8]

My wife and I are currently in an IVA. We owed around �60k and have paid in �10k already. Does anyone know what the chances are of the creditors accepting �30k as full and final settlement? Thanks.

[themas]

A lot (possibly most) of what you have paid in so far will have gone to the IP for fees rather than to creditors. If you have �30K available you are bound to be asked where it comes from. While you are in the IVA you can only try to get it accepted as a full and final through the IP, so you need to discuss the position with him. Most IVAs last 5 years, so if the �30K is not far short of the total you would pay if the IVA went its full distance then you may have a reasonable chance of it being accepted - creditors might well accept less now rather than the promise of continuing payments because if they don't the IVA could fail later on and they could end up with less money overall.

[ianb8]

We are hopng to re-mortgage (done through the IP) but were just wondering what the chances were of it being accepted? Won't the IP fees be reduced though as we have only been in the iva for a year? If the iva runs for the full 5 years we will have paid in around �36k.

[Ethel]

I would be amazed if you could get a mortgage in the circumstances you describe.

No company will lend you money to have existing debts wiped out. After all - you could do exactly the same again a few months on.

[ianb8]

Yes we can. It's done through a company who work with our IP. The rates are normally a bit higher than normal, but we will still be better off! After the initial three years they would look to get us back into the market place with a lower rate mortgage. We have learned our lesson regarding debt and I can promise you that we will NEVER get into this mess again.

[themas]

You say you have already paid in �10K in 1 year, but would have paid �36K in total over 5 years. Its surprising your payments are front loaded in this way. Also, you talk about providing �30K in full & final. Do you mean this to be in addition to the �10K? If so, this would make a total of �40K - �4K more than you say you will pay if the IVA runs its full 5 years. These figures don't stack up so I assume you mean to pay �20K, making a total of �30K. This is over 80% of the �36K which presumably was agreed at the outset so it seems to me there must be quite a good chance of the creditors accepting it. After all, they would have 80% by the end of year one, instead of payments spread out over another 4 years, with the risk of failure along the way. However, I think only the IP can really assess the situation for you.

[ianb8]

We have already paid �10k and intend remortgaging for �30k so the total paid in will be �40k. If the IVA runs over the five years we would only pay in �36k in total, but they say that we would have to 'try' to remortgage in year 4. We won't be in as good a financial position then as we are now, so it makes sense to me to do it now and exit the IVA if we can. By the way nearly �4k was paid to the IP before the IVA was agreed by the creditors. This payment was reduced before the meeting because of a change in outgoings.

[themas]

I believe it quite often happens that if the IVA calls for a re-mortgage and it can't be achieved, for whatever reason, the IVA gets extended for a year or two. If this happened to you (or if you succeeded in re-mortgaging in year 4 and released a reasonable amount of equity for the creditors as a result), the creditors would probably end up getting more than you are proposing to offer them, BUT it would be spread out over the next 4 to 6 years and they would be carrying the risk of the IVA failing at any time. Their view may well be determined by how much (if any) equity they think you could release by a year 4 re-mortgage, so you need to explain why you will be in a worse financial position then than you are now.

[myvesta-sean]

Hi,

Yes it is possible to offer a full & final settlement for early discharge when already in an IVA. This topic is also covered on the Myvesta IVA To Z Video series too.

http://myvesta.org.uk/media/video/iva/

Hope this helps!

Regards

Sean