A full and final IVA instead of 60 payments

[ninja]

I'm new to the forum so apologies if this has already been answered elsewhere.

I would like to know what would be an acceptable one off full and final lump sum IVA instead of having a 5 year repayment period. My debt is £30k and my creditors are Barclays(20%), MBNA(10%), Egg(40%), Capital One(10%) and RBS(20%). A relative is offering to loan me the capital, which will take all of my disposable income to pay back (£275 a month).

I've heard figures mentioned ranging from 25p - 60p in the £. Which would be the lowest acceptable to 75% the above creditors?

If this is the type of IVA I can offer, then is it right that the IP would just charge an initial setup fee and thats that? Wouldn't this therefore be a more attractive offer to the creditors? In this type of arrangement what would the duratrion of the IVA be? 3 months perhaps? What would happen if I got a wage increase during this time?

Sorry for asking so many questions. Any help would be much appreciated.

Thanks,

Mike.

[Adam Davies]

Hi and welcome.
Presuming that you have no property or any other assets and you are actually insolvent then this could be a possible way forward.
You will have to demonstrate that your lump sum will return a similar dividend to your creditors compared to your disposible income over five years.
A lump sum IVA is generally more attractive to your creditors than a five year one as they get their money a lot quicker and the IP fees are less.
There can be a duration period of upto one year so the best way forward is to have a discussion with one or two IVA providers.
Good luck

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[ninja]

Thanks for your prompt reply Andy, it was really helpful. No I don't own a property or any other assets but I do have a car (value ~£6k).

I'm in the process of deciding on an IP at the moment. Are face to face meetings normally needed, meaning a local IP?

Just so I have a rough idea of whether my relatives loan would be enough, is the following example in the right ball park :-

£275 a month disposable x 60 payments = £16500, less estimated IP fee of £6000, leaves £10500 going to creditors (35p in the £). So, If I offered £10000 as a lump sum instead, with an estimated IP fee of £4000, borrowing £14000 should cover it?

Cheers,

Mike.

[MelanieGiles]

Hi Mike

I would have thought more like £15,000, but you are in the right ball park.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ninja]

Thanks Melanie.

Do you have any comments on whether a local IP is preferable (I'm in Birmingham)?

Regards,

Mike.

[MelanieGiles]

Hi Mike

It depends upon whether you feel you would need to meet your IP personally. Unless you are self-employed, there is no longer a need for a face to face meeting, and many IP's work very well remotely from their clients, but if you do feel that you need a more local service then there are plenty of insolvency practitioners operating in the Birmingham area.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk