One and Final payment

[cb246]

Hi
I am currently dealing with a company who have proposed a full and final settlement of my out standing debts. The only problem is they seem to be dragging their feet a little and I have for the past 3 weeks been chasing them for the proposal letter. Until I called them 2 months ago I hadn't defaulted on any payments but knew I was about to so wanted to try and sort it out as quickly as possible. Once I contacted them they told me to make no further payments.
I have been considering contacting my creditors myself. Having looked into it I know I can write a letter explaining my situation and offering them a one and final payment pro rated to the debt for each creditor. To pay it I am selling a rental property I own and remortaging my house which will enable me to pay back 30p in the £. Do you think this is enough and should I go it alone which would save me the IP fee and give me more to pay the creditor or would I have more clout with a big company acting on my behalf?

Any advice would be great, I just want to get this stressful situation over

Thanks

[Adam Davies]

Hi
If you only have two or three different creditors then you can try and negotiate a settlement direct.
If you have more than that then it is better to go through an IVA provider as your creditors have a set date to vote and will be bound by the decision as long as more than 75% of the voting creditors,by value,agree.
Can you post a few more details
regards

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

[cb246]

Hi Andy

Thanks for your advice. Between myself and my husband we have 8 creditors so perhaps it's better we go through the IP we have then. One of them is also MBNA which we have been told are not happy about accepting a one and final if their debt is more than 75% of the outstanding debt.
It's 10 weeks since we started proceedings with the IP and it's got to the point now where creditors are talking about doorstop collections which is very frightening and no point because we don't have the money to pay,that's why are doing a one and final. I'll just have to keep chasing the IP and hope to get the proposal letter soon

[catullus]

I know for a fact that MBNA are generally very receptive to F&F's but curiously they generally will only accept them OUTSIDE of an IVA.

Your IP might not be aware of this and I would suggest that you raise this with the IP and ensure that either you or the IP check this with MBNA before presenting the proposal.

[thebear29uk]

Hi

I had MBNA as a creditor and they had approx 27% of my total debt. They offered me settlements at various stages and the longer it went on the better the offer. My final offer was approx 30p in the £. However, you do need to be careful as you might be seen as favouring one creditor over another although I think this is more the case when the other creditors are to be offered a 5 year drip-fed payment which they are unlikely to see any dividend for until at least year 2-3 due to IP fees being paid first, and also the risk that a 5 year scheme could fail.
If you are successful in offering all your creditors a settlement outside an IVA then there is no problem.

I had an IVA accepted for min 36p in the £ on debts of £87k and MBNA voted yes.

One last thing. MBNA don't like to find out you are having problems from somebody acting on your behalf. I.e. an IP firm. Its far better to talk to them and see what they can do for you.

Regards

Dave

[MelanieGiles]

I think one of the real advantages of the IVA procedure, is that your creditors have to make a decision on a particular day - ie the creditors meeting, and will have to say yes or no. The majority of the banks and main lenders either have specialist persons in their insolvency teams trained to review and vote upon IVA proposals, or they outsource this work to specialist accountancy or law firms.

In trying to make this offer yourself outside of a formal insolvency process, you may not be able to find a decision maker, could wait weeks for your letters to be answered and never get to a position where you have a deal agreed with all creditors.

My advice is to leave this to the professionals, in such way as you will not have to worrty that any of the creditors can change their mind or pursue you into the future. Personally, I find MBNA a very receptive creditor, but they do like you to keep them informed of your situation in the meantime.

Like Catallus, I also have some experience of MBNA liking settlements outside of IVA proceedings, and as long as your other creditors are not likely to be prejudiced by this action - I had one case recently where MBNA accepted a lower offer, so the other creditors gained some advantage, there ought to be no problem in neogiating separaretely, but follow the advice of your own IP who clearly has more detailed knowledge of your case.

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