I have an opportunity to borrow funds from a family member to offer a full and final settlement for our IVA. We are just coming to the end of our 4th year. I have discussed this with the company dealing with our IVA and they have asked for proof that the person has the funds and also for the funds to paid up front into their account prior to preparing the variation documentation. Is this normal procedure?
This is quite normal. They need to know the money is available and it also to do with money laundering as well.
If the money is available then as soon as the full and final is agreed the money is there to pay across.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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As Jan says, this is normal and responsible behaviour. If your relative offers the sum only on condition that it completes your IVA then your IP will refund the monies if the offer is rejected.
Hi
I can understand the third parties concern at handing money over before the IVA is agreed. I would have thought proof of funds would suffice but do know that some companies work like this.
Regards
Always better for all parties concerned if the IP is holding the funds - as this means that the case can be closed immediately following the creditors meeting. I note we see so many tales of posters finalising their IVAs and then waiting an age for the completion statement, so if the IP is holding funds some pressure can be brought to close the case early.
There is, however, no statutory requirement to have the funding in place - and this is rather the decision of the funder rather than anyone else. IPs must not say that the proposing of the variation is conditional upon this.
Thank you for your replies. However the company dealing with this have said they will not ask for a meeting or prepare a proposal until they are holding the funds. Apparently this is due to the work and cost involved in proposing a variation. I have said I will provide proof of funds but they have categorically stated they need the actual funds in their holding account.
You don't have to do this. There are no rulings on this, but if you do decide to give in, make sure you have evidence that they are going to hold the monies on an interest bearing client account to your order.
