www.iva.co.uk

Hi. I have a rather complicated situation and am desperate for some advice :-/
Background: my husband and I have been in a joint IVA with Freeman Jones for 10 months (began October 2012).
In April 2012, I hurt my back at work and have had a fair bit of time off sick (on and off) since then.
I am now on half pay and unable to go back to work yet as I have recently had surgery on my back. I have had a reduced payment agreed towards the IVA until such time as I am back on full pay, however, due to the nature of my job, I will be unable to fully perform my contracted role and although my company are happy to try and accommodate me on my return, I doubt this will be sustained.
A very good friend of mine has some savings and has offered to loan us the money to make a full and final settlement to take the pressure off me potentially being given medical retirement or having to take a job which pays less, and still meeting the terms of our IVA.
~Our IVA was for £18,123.
~We pay £150 per month until month 18 when it increases to £360, and then another increase after a further 39 months to £461 (due to car HP being paid off etc).
~For the last 2 months, we have paid £40 (agreed due to reduced income).
~nominees fee (excl vat) is £3,000
~Total supervisory fee (excl vat) is £3,262.
~Disbursements, £300
~Dividend is 28p/£
~PPI is owed from 2 of the creditors and is in the process of being requested (don't know how much though).
~We do have the equity clause but I would think there has not been any change in the value of our house over the last 10 months, and there was no equity available then.

My questions are these;
~ Would a full and final settlement be accepted on the above info?
~What would be the amount I would need to offer (if my friend has enough)
~How long would the process take from me contacting my IP about making the offer and us not having to make any more monthly payments (provided offer is accepted), as I would hope to complete before we became unable to meet the IVA requirements.
~What information would I need to submit with the offer (eg bank statements etc?)

I apologise for the length of this post, but really want to make sure I know everything before my friend makes such a big gesture. (And I am not very good with working out the percentages etc so will more than likely stuff it all up and end up in the ****!

Thanks in advance to any kind people out there who can help untangle the spaghetti that is my mind at the moment!!

Jojocox.

Going off other posts on the forum a F&F needs to be quite close to the original amount to be repaid, in your case £18,123. Unless there are sufficient ground for finishing the thing early, e.g. your bad back and the uncertainty of getting a job in the future at the same pay scale.

One thing which will go in your favour is the PPI reclaim, if you have any idea as to how much this will be you can factor that in so as to show the creditors are still getting back the same amount even though some is from direct contribution from yourself, some from a third party and some from the PPI..

It seem you have little or no surplus income at the moment and this will not change until the first increase in month 18. Personally, I would think about £8-10k should be reasonable including any PPI reclaim. You seem to have nothing to lose in bankruptcy and may not even receive an IPO so this figure should be more than acceptable.

Speak to your IP as it is still as lot of money to pay out when bankruptcy may cost nothing other than the fees.

Thanks.
Really don't want to go down bankruptcy route as we don't want to lose our house as we have a 2 and 3 year old an want things to remain as stable a possible for them.
Also, we accrued the debt so want to pay it back as best we can. It has taught is a valuable lesson but I really want to avoid bankruptcy.
Jojocox.

If the full and final offer is rejected, will I be forced into bankruptcy?
If that's the case, it would put me off making an offer entirely :-/

Just because the F&F is rejected does not mean you go bankrupt. The creditors have to look at the return they can expect if they reject the F&F and if you go bankrupt they get nothing so they would be daft to reject it.

They may consider taking reduced monthly payments now which will increase in line with what you detailed before and take the chance that you may get a better job in a few years..

Ah, that makes sense. Thank you. Do you know if I will need to get the house valued etc or just send in up to date mortgage statement?
Any ideas what else I should look at getting together or just the initial letter for now?
Thanks in advance.

I would speak to your IP first, as your IVA has only been going for a short time the value will not have changed that much.

The more important thing is to emphasise the nature of your back operation, the recuperation time and how all this impacts on your job and ability to meet the original repayments.

Also emphasise that the funds for any F&F are a one off offer and no more is available.

If possible it would be good to try and get an indication of any PPI reclaims so that this can be factored into the total return to creditors.

Ultimately you will be guided by your IP so it is best to speak to them and explain everything..

Thanks for that.
I will get on to them first thing Tuesday morning.
They are aware of everything that has been going on with my back as I have had to keep them up to date due to the reduction in salary etc.
thanks for the advice.
Jojocox.

Your IP will be best placed to advise ...an offer of approx £8k is a good starting point and based on the understanding that should it not be accepted then the money will not be available to you from the third party.

Are you claiming for your injuries at work and if that severe claiming industrial injuries benefit?

Hi.
Thanks again for a helpful reply. I am making a claim although it looks like it will go on for some time, probably longer than the IVA , as prognosis is difficult due to the fact that its still ongoing - surgery has helped, but only partially.
I didn't claim industrial injuries benefit as that has to be paid back upon a successful claim and not sure where that would leave me with the IVA if its sti in place at the time. I am battling with a temporary injury benefit claim as my line manager declined it sayings injury was not attributable to my daily role - even though my employer has admitted liability and the specialists report for the claim supports the fact that my injury is wholly attributable to my accident. The joys of poor communication within the system!
I am hoping that any payout will go to paying my friend back and if there is any spare, putting it away to make sure we NEVER get ourselves in such aess again!!
Regards,
Jojocox

Hi Jojocox. We had our F&F accepted on 12 April and received our CCs on 15 August - completion was complicated by HMRC usually it is within 6 weeks of acceptance.

Every case is different and we were in the lucky position of offering the sum of the remaining payments, thanks to a generous relative. It takes around 3 months from starting the ball rolling to the variation meeting of the creditors. A month of this is taken up by the fact the circular to creditors with advance notification of the date/time of the variation meeting has to be sent out a month in advance to give the creditors time to examine the proposals.

Initially we had to provide up to date income details and a written valuation of the property from a local estate agent. There are also money laundering checks to complete on the sponsor (if above 10k).

An important part of the process is the section of the circular where you make your case for wanting to settle early. This would be quite persuasive in your case.

my f&f was done after losing my job. so like yourself I could not keep up the iva payments.
the F&F offer was for payments at the time x months left.
I would not look at what you could be paying in 18 months as, with a loss of income your I&e would not be there to increace you payments.

With the equity clause in place, and being almost a year in, would you times current payments by 4 (years left before equity release) or 5?
Thanks.

I would do by 4 working on the basis there was negligible equity in the property.