full & final settlement

[fbe]

Hi
can anyone help me to understand the lump sum full and final settlement IVA offer. i just received the proposal pack from my IP and there is paragraph saying I have to pay 100% windfalls and inheritance, i know I have to wait till monday to speak to my IP, but i dont understand if I am making a one off payment as full and final settment then do I have to still make payments to creditors if i get a bonus or if I do overtime? when does the IVA end?

[MelanieGiles]

Hi fbe

If you are offering a full and final settlement to your creditors, you are still subject to all of the other terms and conditions for the period of the IVA - usually 12 months. So if you do receive any windfalls in this period, you will have to hand them over to the Supervisor.

It would be unusual for you to have to hand over any 50% uplift payments, but not impossible. This would only result if your creditors specifically modified the proposal.

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

[fbe]

Thanks for answering, but I was hoping that I could repay my family members first with any windfalls and inheritance I receive, because I have borrowed a loan from them to make the proposal to creditors. I promised to pay it back to my family members in the future. can anyone please advise on that. Could I not exclude the windfalls from the proposal altogether or do I still have to pay them first?

[keh]

Hi fbe and welcome to the forum

Question for Melanie

If your F&F is accepted and you finished say 2 years early, does that mean if you get a windfall AFTER completion of F&F the creditors can still ask for more money?

Keith

The long and winding road will straighten out eventually....keep the faith

[MelanieGiles]

To fbe - you will be unable to favour your relatives in the event that you receive a windfall, as this would be preferring them over the other creditors. Windfalls are a standard term of the majority of IVA proposals, and you will be unable to exclude them.

To Keith - No. Once an IVA is finalised, then windfall payments are no longer applicable. So anyone who has successfully had an IVA varied on the basis of full and final settlement, would be wise to press their IP to close it down as soon as possible.

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

[keh]

Thank you Melanie

It must be the way i read this post between the lines, Our F&F is set to be voted on in 3 weeks time so hopefully by August we should be all settled up and start to lead a normal life again and this time without credit cards etc, my new motto is if I haven't got the money then I can't buy it.
Thanks again Melanie

Keith

The long and winding road will straighten out eventually....keep the faith

[fbe]

thanks Melanie

but i am still confused a bit, but if i tell you exactly what has happened then may be i'll be able to understand better. i haven't had the creditors meeting yet, but my IP had just drawn the proposal and I am checking the proposal. In the proposal i am trying to make a one-off payment to my creditors, so if in the meeting the IVA is approved then I am paying all the money to my creditors straight away within 12 days, then why is it necessary for me to pay any more windfall money after that? is that normal in a one off payment? Am I not out of an IVA after making the payment? i just want to make sure that my IP is not including anything in the proposal that should not be made.

[MelanieGiles]

Because your proposal will not be running over 12 days but more like 12 months. Whilst you are in an IVA windfall provisions apply. You are not out of the IVA until your Supervisor has agreed all of the creditor claims and has distributed all of the money. This can often take up to 12 months.

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