If I go down the route of a lump sum IVA and the offer I make is not accepted, will my creditors make a counter offer or will I have to go back and try again via a IP?
They don't usually make a counter offer as such, but be guided by your ip, they should be experienced enough to know how your particular creditors will respond to your offer, sometimes with a normal 5/6 year iva they may come back with modifications, like reducing a certain level of expenditure to create more disposable income but this doesn't apply to a lump sum iva, as long as your best offer is on the table and creditors can see that then there is every chance it will be accepted, I guess if it isn't, your ip will try to renegotiate on your behalf to get it passed
We have just done a lump sum IVA. Our maximum possible offer was £12000 but on the recommendation of our IP we offered £10000, based on the payments that would be made over 6 years (to take the house equity into account).
My husband and I were proposing interlocked IVAs - his was accepted but not mine. The creditors wanted a contributory IVA instead as I have not been able to find work since my business folded, and they were obviously concerned that this could change. They also did not agree that any financial allowance should be made in order to support our 2 student children foodwise during the holidays and wanted the money we were claiming for this to be added to our disposable income. (They also would not sanction our food bill beyond the guidelines.)
To be fair, the dividend we were offering was very low (9p) and this is probably why they were objecting, but they were now asking for £295 per month as opposed to the £146 we were proposing, and we did not think this would be affordable. The meeting was therefore adjourned for a fortnight.
A week later, and the creditors could still not be persuaded to budge. We were still keen on a lump sum IVA so after discussions with the IP and consulting with family (who were providing the funds) we upped the offer to £15000. The IP suggested a lower starting point, as they agreed with us that the food allowance should cover the children during uni holidays until they had finished their studies, but the creditors were not prepared to accept any less than £15K, giving them a dividend of 15p. At the adjourned meeting a few days later this revised offer was accepted.
It was a very difficult fortnight, but we felt that a lump sum IVA was really the best option for us, and the IP got us this. We are delighted that we can now move on. There is always a solution - good luck!
PS Sorry if this is a bit detailed, but this is the sort of info I was after myself a couple of weeks ago.
Thanks for the reply and the details are good! We owe 56k and at the last budget we can pay £153 per month. I'm hoping to do a lump sum IVA at £11,000 but wonder if I'm being too optimistic!?
The lump sum bit looks fine to me, and in 16 years I can honestly say that I have never had one of these proposals rejected, however if you can afford a monthly payment as well then creditors are well within their rights to ask for the lump sum AND payments for 5 years. Well worth the time to go through that budget again and make sure you have accounted for everything going out.
Regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
Having lived through that two weeks of pain experienced by Debt Tired, I am so glad that she has posted the details in such great detail, because this is exactly what happened in her case and it goes to show that creditors will still hold out for the best offer, even with the best presented IVA proposals.
On a personal note, I continue to feel that creditors pushed unfairly in this case, but I guess that all is well that ends well, and the low initial dividend probably did not help.
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