I find myself able to offer a F&F on my IVA as my parents have kindly offered to gift me some money following receipt of an inheritance.
I know the usual basic calculation for a F&F is monthly payment multiplied by monthly payments remaining.
In my case when I originally entered into my IVA my monthly payments over the 5 year term would have amounted to £36,000 (total debt approx. £49,200). 4 years into my IVA I've made payments totalling approx. £34,700, with exactly 12 months of my original 60 month term left.
However, I have recently only paid token amounts for 4 months (with the knowledge/agreement of my IVA). My IP has indicated that my IVA should be extended by 4 months to cover that shortfall, but I have never received either a notice of breach or anything in writing confirming such an extension (some four months after I raised my then difficulties with my IP). At my recent annual review my IP reduced my monthly payments by £135 and I am now back to make my normal payments.
Therefore, in offering a F&F, should I include that shortfall in my offer or not, and if so, how much of it ?.
To be honest, I (and more importantly my parents who would be gifting me the money) don't really 'get' the point of offering a F&F that is the same as my remaining monthly payments. Surely it should be lower to reflect the fact that your creditors are getting a lump sum early ? - yes perhaps my financial circumstances might improve in the next year so I could pay more towards my IVA but equally my financial circumstances might deteriorate leading to me having to pass less towards my IVA etc.
In my case, if I multiply my monthly payments by the 12 months remaining of the 60 month IVA, it comes to approx. £9950. If I add the recent shortfall, it comes to approx. £13250. Based on these figures, I was thinking that £11,500 would be a reasonable F&F offer - thoughts welcomed.
Your offer seems more than fair and personally I would offer £10k. I would also advise the IP that this figure will decrease by every month it takes for the variation to be called in case there is a delay there.
1) My normal monthly payments from the end of this month onwards are over £55 a month higher than what I am certain I was advised by my IP after my recent annual review.
2) My IP refers in the email to a 4 month extension to cover my shortfall in payments - the principle of which I don't dispute, but I'm still yet to receive any kind of notice of breach or such like regarding the reduced payments I made from April to July 2013.
3) This essentially means that if I use my IP's figures, the outstanding amount of my payment is £13896 - which concerns me if I am 'only' offering £11000 as a full and final settlement (my parents are unwilling to increase that offer).
4) My IP states that it will take a minimum of three months for the meeting process to be progressed.
Any further thoughts on whether an offer of £11,000 as full and final is likely to be reasonable ?.
