Full and Final - How Much Should I Offer?

[LutonStudent]

Hi,

I took out an IVA in August 2020, £32k debt, reduced to £12,000.00 over 60 months = £200.00 per month.

I really want out, and my partner has offered to gift the money to get this settled.

I want to offer a full and final settlement after 18 months, which will leave £8,400.00 remaining on the IVA.

Note, I have no assets, no mortgage, and live in a rental property. My largest debt with Tesco Bank (£17,000.00) has been handed over to the PRA Group who more than likely purchased the debt from Tesco for pennies.

What sort of offer would likely clear this debt? I was thinking about offering £3000.00.

Please let me know your thoughts, or past experiences.

Many thanks,

[Foggy]

So, about £8400 remaining over 3 and a half years ..... I would say that £3k is a bit light and would think more like £6k would be looked at seriously. But, as I always say --- I have seen low offers accepted as well as high offers refused.

When Aperture, I believe, flirted with early exit loans a few years ago they, as insolvency professionals, suggested the capacity to reduce the outstanding amount by around 10% for each year brushed off of the term. This sort of figure would apply more to the higher dividend arrangements, where the creditors are not already taking a large 'hit' on the loans.

[LutonStudent]

Hi Foggy,

Thanks for your quick response.

I guess the other alternative, is fail it and my partner pays my BR fee's?

Is it wise to mention the alternative would be BR if it's not accepted?

Many thanks,

[Foggy]

BR would be less preferable to creditors as they would stand to get less than the remaining due under the IVA. However, from your point of view, you are likely to be required to make payments at or above those in your IVA for three years. If you do make that threat in your offer they might call your bluff.

[luluj]

I agree with foggy, £3000 is too lower an offer. If it can be increased you stand better chance.

I personally would avoid bankruptcy discussion / option unless you really have to.

You haven't said why you 'want out of your iva so soon what's changed ?

Your credit report will continue to showcase iva until 2026 whether it be cleared or left to run.