www.iva.co.uk

I have done 45 months and kept up with every payment. I owe now about £6,500 and have offered £4,500 as full and final thanks to a gift from my uncle. Should this be accepted? What are my chances on the Variation date with the creditors. What actually happens on that date?

Hi,

I cannot answer your other questions but your offer sounds good.

I think they would be mad to turn it down especially in the current economic climate [:D]

Sounds like a good offer to me to.

Hope it gets accepted. Let us know.

It seems a really good offer and like others, i think it will probably be accepted.

Good luck

Whether or not your creditors will accept the offer will depend on what you were originally offering in your proposal. Is the £6,500 what you have left to pay, or is that what you calculate your debts to be after taking into account the payments you have made into your arrangement so far less the costs of the arrangement.

Also has your Uncle actually given you the £4,500 or is he offering it to your creditors in full and final settlement of the IVA - the monies only to be paid over if the creditors agree to the variation.

If it is the latter, it does sould like good offer and I see no reason why your creditors would not accept it. However if he has already given you the money it is technically a windfall and should be paid into your arrangement in addition to the remaining payments.

On the day of your variation meeting, your creditors will get the opportunity to vote for the variation (with or without modifications) or against it in much the same way as your original creditors meeting. Again you will need 75% of the creditors who bother to vote to be in agreement with the variation for it to go through.

If the variation is accpeted, then once your Uncle has made the payment into the arrangment, the Supervisor of your arrangement will just have to conclude matters - i.e. pay a final dividend to the creditors and send out completion notices to you, the creditors and the court. You will then be debt free and even though you will not have paid back all you owe, your creditors will no longer be able to pursue you for the debts. They will have to effectively write off any outstanding balances. The IVA will still remain on your credit file for another 27 months but it should now state that the IVA has been satisfied.

If your creditors do not agree to the variation, then you have lost nothing and would just continue the payments for the remaining 15 months.

This has come up before on the forum and I'm a little confused. If a family member gives money to someone in an IVA, surely that is a gift and not a windfall? Doesn't that mean that the money does NOT have to be paid into the IVA unless the person wishes to do so, perhaps for a full and final?

i agree it should be classed as a gift, because if its classed as windfall, then in theory any presents you get for christmas and birthdays, then you should have to sell them and put the money in to the IVA.

The offer of the money is on premise it is a full and final otherwise I get nowt from my uncle. Ta for all replies

I do not agree that gifts are classed as windfalls - but it does sound that this money has been made available specifically for the purposes of settling the IVA.

A gift is a windfall Melanie and in the Protocol Compliant IVA must be made available. If anyone in an IVA is about to receive a gift it is probably better to propose a variation and offer a lump sum (not necessarily the full amount of the gift). Seek advice from your IP in the first instance. Liz is right in her advice.

Hi
A gift that is made ONLY if it is to be used to conclude an IVA is not a windfall David, because if the creditors deem it to be a windfall the gift will be withdrawn. If a family member gifts their child/ relative £200, for example, to help them through Xmas or to go on holiday how can this be classed as a windfall and made available to creditors ?
Sounds like madness to me and needs a re-think
Regards

I know this might not be the right thing to say, and I'm sorry if if upsets anyone. If I was still in my IVA and someone had given me a gift of cash I wouldn't have mentioned it. If my mum had chosen to pay for me to go on holiday then that's her decision, and if half the money had to go to into the IVA it's unlikely she would have done it anyway.

I know it's not in the spirit of an IVA, but neither is expecting money given as a gift to be handed over.

Hi
Totally agree Skppy and I would do the same.
My dear old father in law helped me out many a time.
I suppose that most IVAs have a £500 limit before the windfall kicks in, so most gifts will be unaffected.
Thank God
Regards

But a gift given by someone conditional on a full and final for an IVA is not a windfall and I agree with Andy. However what happens if some eccentric old lost Aunt gave someone in an IVA a gift of £20,000? Are you saying that this is not a windfall and not caught by such provisions in an IVA? I think not. Certainly £500 or less would be ignored.

Thanks guys but frightening that several experts and very experienced people on here cant seem to agree on the subject. What change has the client got? What actually happens at my variation date and my supervisors. I remember going down for the proposal 3.5 years ago and no creditor turned up and it was a waste of a day. Will they vote by proxy, will they leave it till the january date or decide prior? What happens?