Things have changed in the world since we entered into the IVA

[Iam007]

We are in an IVA nearing our last year and the equity in our house is to pay the remaining balance. However things have changed in the world since we entered into the IVA. Many of our creditors were banks and they have sold off these debts to third parties and I know these debts are taken on at considerably less than the original amounts. As an example my daughter ran up a huge mobile phone bill whilst in Australia and the mobile phone provider sold the debt to a third party who then sent demand letters to her at our address. To cut a long story short they first said they would accept 75% of the debt and I said that I was prepared to offer 50% there and then and they readily accepted this offer. My point is that banks & lenders are viewing this differently than they were before the banking meltdown and I feel pretty sure that in this current climate I would be able to make a huge saving on these outstanding debts of 100k if there was a way of opting out or failing our IVA.

[Niobe]

Hi and welcome.

There is nothing to stop you from failing your IVA but what a waste of time the previous four years would have been.

Just remember that you have had all interest and charges frozen which will have saved you a considerable amount of money.

You are so close to the end now that that it would be a shame to let it fail.

[Iam007]

I would normally agree but this is all about making the best of current circumstances and the circumstances have changed for me personally and globally. When we entered into an IVA this was the only option available to us and since then we have seen the collapse of the banking system as we know it and many brand names have gone to the wall and the economy is not in great shape. My situation is the opposite as I started my own business which has gone from strength to strength and is very profitable so the tables have turned somewhat. Knowing that many of my bank debts have been sold on at much less than their original values and I know from experience these third parties are prepared to accept lesser amounts. Generally banks will sell debts for 50% or less depending on the type of debt and amount over this whatever the third party collects the better and in this climate cash is king. So my point is that I have outstanding about £100k and I am thinking that with some shrewd negotiating I could have this reduced to £50k or even less if I fail my IVA.

[MrsKnight]

It' is highly unlikely that you are going to be able to remortgage to release equity in your property to pay the remaining balance or to offer this to your creditirs. Mainly because lenders won't touch you now because of the IVA. We have seen many posters being unable to do this & have their IVAs extended for a further year & then it's all over. For many this is a more favorable, affordable option than releasing the equity & getting to the end & having the remaining debt wiped through having the IVA & becoming debt free.
Letting it fail when your so close to the end is a huge risk & you would be back to square one with your creditors and who's to say they will accept less.

[Iam007]

Thank you and your input is appreciated. Whilst I believe we can obtain a 50% remortgage it is not my preferred route and as you correctly say there is no guarantee that the creditors will accept a lesser amount it is just me thinking and asking for advice. However knowing the market as I do and as the amount owed covers a number of creditors I am thinking that some will and some may not. I would actually ask a family relative to contact the debtor rather than me otherwise they might think that I have won the lottery or something and I would pay the amount to my relative before he has negotiated on my behalf.

[Niobe]

Where would the money be coming from as a matter of interest?

[KAYKAY]

The idea of an IVA is to pay as much back to your creditors as is feasibly possible. You are 1 year, possibly 2 if you can't re-mortgage from clearning your debts and being totally debt free. Allowing your IVA to fail, just to finish early or to try and negotiate smaller payments is a huge risk.

[Iam007]

Me. One of the reasons for the IVA in the first place is because I had lost my job and at my age 51 at the time these was little chance of getting another job at the level and income that I was looking for so I decided to set-up my own company working from home and it has been a great success. Now I do not have access to the whole amount but I could get half of it together. So my theory is that if I were to offer a cash payment of 50% of the outstanding debt then I could clear this sonner rather than later.

[KAYKAY]

Your credit file would still be affected for the full 6 years. If this money can be readily available, then you could make a full & final offer through your IP, thus not needing to negotiate yourself or via a family member, after all that is the job of the IP and what the fees are paid for. You would not need to let your IVA fail at all.

[Iam007]

Thank you Kaykay I never thought of this. Has anyone tried this before and if so what was the outcome.

[MrsR]

Many people offer F&F to complete their IVA's, as people come up against changes in their lives which enables them to do this.

As Kaykay has stated, your credit record will be affected for the full 6 years from the start of your IVA regardless of whether an F&F would be accepted.

[KAYKAY]

A lot of people have made full and final offers which have been accepted. I am not aware of exactly what this entails, as I was never in a position to offer such a settlement. Speak to your IP as soon as possible to set the ball rolling and find out what you need to know.

[Niobe]

You should normally offer as closed to the original dividend as possible, a lot get accepted as it means the creditors get their money a lot earlier than they would do.

[bulldog]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Iam007

I would normally agree but this is all about making the best of current circumstances and the circumstances have changed for me personally and globally. When we entered into an IVA this was the only option available to us and since then we have seen the collapse of the banking system as we know it and many brand names have gone to the wall and the economy is not in great shape. My situation is the opposite as I started my own business which has gone from strength to strength and is very profitable so the tables have turned somewhat. Knowing that many of my bank debts have been sold on at much less than their original values and I know from experience these third parties are prepared to accept lesser amounts. Generally banks will sell debts for 50% or less depending on the type of debt and amount over this whatever the third party collects the better and in this climate cash is king. So my point is that I have outstanding about £100k and I am thinking that with some shrewd negotiating I could have this reduced to £50k or even less if I fail my IVA.

[bulldog]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by bulldog

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Iam007

I would normally agree but this is all about making the best of current circumstances and the circumstances have changed for me personally and globally. When we entered into an IVA this was the only option available to us and since then we have seen the collapse of the banking system as we know it and many brand names have gone to the wall and the economy is not in great shape. My situation is the opposite as I started my own business which has gone from strength to strength and is very profitable so the tables have turned somewhat. Knowing that many of my bank debts have been sold on at much less than their original values and I know from experience these third parties are prepared to accept lesser amounts. Generally banks will sell debts for 50% or less depending on the type of debt and amount over this whatever the third party collects the better and in this climate cash is king. So my point is that I have outstanding about £100k and I am thinking that with some shrewd negotiating I could have this reduced to £50k or even less if I fail my IVA.

If your IVA fails it would usually mean that you are again responsible to your creditors for your original debts. This is because during the early part of an IVA the money you pay often goes toward set up fees and the IVA company’s own professional fees before any payments are made to your creditors. However, this is not a problem if you move without delay from a failed IVA to the protection of bankruptcy.