In April I made a full and final offer of £3000 when I had about £11,611 left on the IVA. It was rejected. There was a difference of around £8500.
I am currently speaking to my IP about making an offer of £7000 in September, and at that point there will be £9420 left on the IVA. There is only a difference of £2500.
I personally think this is a good offer however he has said that “an offer that is not similar to the anticipated outcome without a change in circumstances showing lower ongoing affordability has a high chance of rejection.“
To me the £7000 is close to the £9420, and a lot better than the previous offer. Would I have to go in with an offer of £8000-£9000?
A full and final is generally based on your monthly payment x the number of months left e.g. £100 x 36 =£3600.
Was it your creditors that rejected your first offer or the IP/member of staff you are dealing with as this does not seem quite right?
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
The £3000 in April was rejected by the creditors. Understandable as the offer was so low.
I have 30 x £314 payments to make = £9420 so that’s why I want to offer £7000.
My IP said that “We are here to act as you direct but without a change in your circumstances reducing what you are able to pay monthly and subsequently over the term there is a high likelihood that your creditors would reject I am afraid.
My advice, if possible is to offer as close to what creditors are anticipating as you can. For example if you do make an offer of £7,000 as suggested the approximate return to creditors would be 36% compared to 50% estimated at the previous variation meeting which is, generally as far as creditors review offers, a big difference.”
Which I don’t get because the new offer is A LOT closer to the outstanding amount, so how I the approximate return percentage lower than last time?
By "previous variation meeting" is he referring to the original creditors meeting ? Or be referring to the comparisons made at the rejected meeting in that your offer of £3k was X% against the estimated 50% if the IVA was allowed to run to term?
Anyway -- you have 30 months left, so will be saving everyone over 2 years faffing around (which does cost them money). So -- they are expecting to see the full £9420. When aperture originally introduced early release loans, they suggested possible savings of around 10% per year knocked off (which I think is a mite optimistic and a "come grab me" figure). So, for ease of maths, say that's £950 a year, so £1900 an offer of around £7520. So you are, by those standards, in the right ballpark.
As your IP said, they are there to act according to your instructions and will put the offer forward if you request it. But, of course, much will still depend on how they present it and whether they recommend acceptance. Keep in the back of your mind the fact that they get less in fees (assuming they are the usual percentage based fees).
That all said, a 36% return is a reasonable return for an IVA. And 36% "in the hand" is better than considerably less "in the bush" if the IVA goes down the pan anytime soon.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
