Full & Final Settlement Advice

[Paulio147]

Hi, here is the craic!

I have had an IVA for 2 years now and I have been paying 700(12 Months) and 845(12 Months). The total of my debts was equal to around 60k. As Debtmatters keep increasing my monthly payments on a yearly basis and my partner dropping to part time hours due to suffering health I will soon find myself struggling to pay the monthly dividend without her financial input. We have two options of raising a sum of money via my mother offering a slice of retirement fund or my partner (who is not on the IVA agreement) taking out a secured loan against her house. I am wondering whether it will be beneficial to offer a FFS using one of these options? and realistically how much should I offer?

My total debt was around 60k and I have worked out that after I have paid my dividends for 5 years I would have paid back around 51k minus IP fees. This means I would be paying around 85p/pound... is this exceptionally high?

[caraf]

That seems a very big jump in payments from 700 to 845. For what reason did they give for such a large increase. Did you have a change of circumstanes. I always thought that your payments didnt change unless your circumstanes changed.

[Paulio147]

That seems a very big jump in payments from 700 to 845. For what reason did they give for such a large increase. Did you have a change of circumstanes. I always thought that your payments didnt change unless your circumstanes changed.

My initial payment was decided over the phone??? They asked me all of my outgoings and made the decision that way. I got a demand for 5k after a year which I disputed as they had not asked for any pay slips or P60s when setting up my first years payments. They then decided after review that my payments were increased from 700 to 845 as the initial calcs they had made would not suffice. This has left me with no contingency and we often struggle to get by.

[Paulio147]

anyway, I was considering offering a FFS of around 18-20k. With my 2 years of payments minus IP fees the creditors will be getting around 54p/pound back. Does this sound reasonable. I cant guarantee that I will be working for the remaining 3 years of my IVA due to the unpredictability of the industry and my partner has dropped to part time work due to illness.

[Adam Davies]

Hi
Your offer is a fair one.
Presuming that you do not have an equity release clause I would write to your IP and state that a third party is willing to loan you 20k ONLY if it is used to conclude your IVA,also that your disposible income will be used in full each month to repay the third party.Also state that you are concerned about your future earnings due to the industry that you are in and your partners ill health.
Good luck and let me know how you get on
Regards

[MelanieGiles]

I suggest that you get your IP to work out a settlement figure based upon you returning the original dividend pledged to creditors.

This is yet another example of IP's assessing much higher contributions after the first year, and pushing people away from their agreements rather than assisting them to maintain them. I just find this sort of policy really odd.

[Paulio147]

Ive just been doing the maths and looking through all the documentation I have recieved from them over the last two years. There seems to be a settlement figure on the end of the second year report of 26967. It then states that I was paying the creditors 33p/£. I was a little shocked to find out that one claim was for 15000 more than the original loan and I successfully paid off two years of it before the IVA. None of the claims are agreed claims though? I dont understand this.

[MelanieGiles]

Even more reason why you need some explanations! How can a creditor claim be received at more than £15k more than was declared on your statement of affairs! Were the creditor balances independently verified by your IP before they drafted the proposals?

Debtmatters have recently sold their IVA portfolio to two other companies, so you might find that you have a change of Supervisor/staff who will be able to look at your file perhaps in a more logical way.

What dividend was originally offered to your creditors at the time the proposals were accepted?

[Paulio147]

I do not have any records of this. The initial documentation only shows SoFa amounts and creditor claim amounts but the agreed claim amount is left blank. I pretty much signed up to this agreement through blind panic and did not do the important thing and review what I was signing..DOH!.. I think that the dividend has always been 33p/£. But after my first years review I had to increase my monthly contribution to £845 from £700. This was agreed after 3 weeks of phonecalls after they demanded I pay £1280 a month which I could not afford. After doing the calculations I realise that this is substantially more than 33p/£.

[MelanieGiles]

A shame that you were not made more aware of what you were signing up to, and I imagine that you are with one of the larger firms. No reason not to get a settlement figure out of them, and the sooner you ask for this the sooner you can work out whether the settlement is feasible.

Give your IP a call tomorrow, and let us know how you get on.

[Paulio147]

OK, thanks Melanie. Ill give them a call if I can find their contact details. The only number I have seems to get me through to a switchboard for new cases. I have noticed that a couple of the creditors are Max Recovery Ltd and these claims are the most inflated from what I actually owed. What do you mean by 'larger firm'? is this a bad thing?

[MelanieGiles]

There are good large firms and bad small ones Paulio! And bad large firms and good small ones.

From my experience, it does appear that clients who are with the larger "IVA factories" appear less well-informed about their IVAs, but I would stress that this is from personal experience and is in no way to be construed as a general fact.

[Paulio147]

I have certainly learned more from this site than the documents provided from DM. I have had problems with them from day one tbh. Took 4 change of address letters for them to finally get the point I'd moved. They were also quite abrupt with me on the phone whilst sorting out my 1st year review. They took some convincing that my fuel bill was over £200 a month and started comparing my outgoings with national averages. Its not my fault I commute 80 miles to work and back a day, I have to. Sorry for the rant, I guess its just the stress of it all.

[MelanieGiles]

Rant away - to be frank I sometimes cannot understand the nonsense which occurs with annual reviews in some firms. Creditors have accepted an offer based upon monthly contributions which were declared at the outset. So long as there have been no material changes, I cannot see the point in putting clients through continual hell at the end of each year.

[Paulio147]

Just recieved a letter saying that my IVA has been taken over by Payplan. Is this a good thing?