An Individual Voluntary Agreement (IVA) is a formal, legal contract for a set period, usually five or six years.
To finish your IVA sooner and have the remainder of your debts written off, you need to talk to your IVA firm, say how much you are offering and where the money is coming from. Your creditors will need to approve this offer.
How much you should offer as a Full and Final (F&F) settlement depends on your situation and why you want to end your IVA early.
Contents
How do you settle an IVA early
This is how it works:
- you tell your IVA firm what you want to offer;
- your IVA firm puts your proposal to your creditors as a “variation” to your existing agreement, some firms charge for doing this;
- the same offer is made to all your creditors and they vote whether to accept it.
These offers take time – often a couple of months.
5 situations NOT to make an offer
You may hate the IVA, wish you had never started it, be desperate for it to end… but there are some situations in which an early settlement is not your best option.
When you are in the last year
The closer you are to the end of the IVA, the less point there is in settling it early. It can be a lot less stressful to simply sit back and make those last 7 payments.
When you mainly want the IVA off your credit record
This doesn’t happen after an early settlement – your credit score will not improve. The IVA marker remains on your credit record for 6 years from the start. Settling it early will not make it easier to get a new tenancy or a mortgage in most cases.
When the IVA payments are too high to be affordable
Here you should be to get the payments reduced – see Help with IVAs if you can’t pay because of the cost of living. So talk to your IVA firm. Do this first – then IVA may be manageable and if you still want to settle it, it may cost less.
When you can’t afford to make any IVA payments
There are two other options that could be better for you here.
The first is to ask the IVA firm to propose to your creditors that your IVA should be completed now, not failed, “on the basis of the funds paid to date”. See this which looks at when this is a reasonable thing to ask for.
The second is to let the IVA fail and opt for another form of insolvency – a Debt Relief Order or bankruptcy. Here your debts are cleared and the money you are being offered by a relative could help you have an easier next few years. if you have other debts outside the IVA, this will also get those wiped as well.
When you have other debts outside the IVA
It may be that you are getting behind with the energy bills, rent or council tax because of the IVA payments. Here it would be better to get your IVA payments reduced and any money from a relative could be better used to clear these other important debts.
First look at what you are likely to pay at the current rate
You can’t try offering 40% and then increase it to 50% and then to 75%. Assume you can only make one offer, so get it right the first time.
The first thing is to work out how much you would pay into your IVA if you carry on making the monthly payments. So, how many months are left until your IVA finishes? If you have a house with equity, add on the 12 months that your IVA is likely to be extended for.
Then multiply your current IVA payments by that number of months.
For Example – say you are 28 months into a 5 year IVA, so there are 32 months remaining and you pay £200 a month. If you don’t have a house with more than 15% equity you will be paying in either 32 x £200 = £6,400. With equity in your house you can expect to be paying 44 x £200 = £8,800.
Then consider if you have a good reason to offer less than this
Case 1 – you are struggling with your IVA payments
In 2022 this will often be because energy bills, petrol and other prices have risen a lot. But it could be due to more individual factors such as illness, splitting up with your partner or reduced income.
Here your first thought should be to get your IVA payments reduced, or your IVA completed, see above. But if they won’t work. if your IVA is in danger of failing your creditors may be prepared to accept a lower offer to complete your IVA early.
In this case, you should stress to your IVA firm that if your settlement offer is not accepted, you are going to be unable to continue with the IVA. So your creditors have a choice between accepting your IVA settlement offer and the IVA failing.
The creditors will be interested in whether your problems could be temporary and if your IVA could realistically continue. Evidence of your circumstances may help get your offer accepted:
- a new Income & Expenditure form showing you have very little spare income because of increased bills and prices;
- a letter from your doctor or a hospital appointment letter;
- copy of recent payslips;
- a recent estate agent’s valuation showing there is little or no equity in your house can also clarify the position.
With this evidence, your creditors may agree to accept a lower full and final settlement than your remaining monthly payments.
What might be acceptable depends not just on how much there is still to pay into your IVA – the total amount of your debts is also relevant. If your IVA was only offering a low return to your creditors, then they may not agree to this being reduced much.
Case 2 – you just want the IVA ended
If you aren’t struggling, you probably have to offer close to the total of the remaining IVA payments.
Here the reasons why you want to end the agreement early don’t really matter – you may want to emigrate, retrain for a different career, move in with a new partner or just be sick of the whole thing and want to start with a clean slate.
But from your creditors’ point of view this is all pretty irrelevant: they simply have to choose between taking your offer of £x,000 now or you carrying on with the monthly payments.
So on the example given above, they would be unlikely to accept £3,000, may be prepared to take £5,000 immediately and would be very likely to accept £6,000. If there was some equity in your house, then you would probably have to offer more to get it accepted.
Case 3 – you have a windfall payment you can use
Lump sums and an inheritance need to be discussed with your IVA firm. There is normally a clause in your IVA which means that windfalls over £500 have to be paid into your IVA.
Here you don’t have a choice. This isn’t an early settlement offer because the money has to go into your IVA:
- when the amount that will be paid into your IVA is more than the total of the debts in the IVA plus the IVA fees plus statutory interest on the debts, your IVA will be completed early.
- if it isn’t large enough for that, your creditors will expect you to carry on with the normal monthly payments.
More unusually, sometimes a windfall payment doesn’t have to be paid into your IVA – this could, for example, be compensation for a personal injury. Here it is your choice what you want to do with it, so you can make an offer to settle the IVA early if you want. Or you could just let your IVA continue and keep the money.
Or it could be your partner who is getting the lump sum – that doesn’t have to go into your IVA. You could just carry on making the normal payments or you could offer to settle the IVA early, probably having to pay close to the remaining monthly payments as in Case 2.
Case 4 – your IVA firm suggests you take a loan
If you are more than halfway through, your IVA firm may say you may be able to get an “early exit loan”. You need to think carefully about this offer, as the loan may be expensive (eg about 30% interest) and it prolongs the time you are in debt.
See IVA early exit loans for details, including the alternative, cheaper ways of improving your credit record after an IVA.
IVA settlements are unpredictable
It’s impossible to say for certain whether your creditors will accept an offer. Someone with a lot of experience will sometimes be suprised when a good offer is refused. Other times surprisingly low offers are agreed.
If you don’t mind putting details of your situation on the internet, then the IVA forum may help. You can post anonymously and get replies from people who work for IVA firms or who have had an IVA.
Where is the money coming from?
Your IVA firm will want to see evidence about the source of the money you are putting forward. It won’t matter if this is coming from a relative or a friend. This could include evidence about the identity of the donor, perhaps a copy of their passport or driving licence, and proof that they have the money, such as a copy of a bank statement.
If you were just given £5,000 by your dad as a generous Christmas present, then your IVA firm will want you to pay this into your IVA and still carry on with the normal monthly payments. So it’s important to say you will only get this lump sum when your proposal to settle the IVA early is accepted.
Be careful! And check the details!
There are two situations where you have to be very careful and get the settlement agreed first:
- you must NOT take any money out of your pension until you have confirmation that your creditors have accepted your offer. If you take it out before this, it could be claimed as a windfall payment and you would still have to carry on with the IVA! See IVAs and Pensions for more information.
- if the money is going to come from selling your house, make sure you read Sell my house to end my IVA early. You need to get the settlement amount agreed BEFORE you start to sell your house.
If your IVA firm agrees to put forward your proposal, you should make sure you know the exact details of what is being proposed.
“My IVA firm won’t put my F&F offer to my creditors”
If you only have a few months to go, it’s not arguing about this. It usually takes 2-3 months to get it all organised and approved by your creditors. If you are near the end, your IVA firm is just saying it’s simpler to make the remaining payments.
Make sure you have set out in writing exactly what you are proposing and why. If your IVA firm says it can’t be done or the offer isn’t enough, ask them to explain why. Insist on having this in writing.
If you think your offer is a sensible one and your firm is being unreasonable, put in a formal complaint.
What if the offer is refused?
If your creditors reject the proposal, you have to carry on with the normal monthly payments.
You could talk to your IVA firm about whether a higher IVA settlement offer might be acceptable now. Or if you could make the same offer in another six months or a year, which will give your creditors more money as they will have had the additional payments.
If you simply can’t carry on with the payments, then it may be that your IVA has to fail. See Your option when an IVA fails for what you can do then.
Should I sell my house to end my IVA?
Lower IVA payments because of inflation
More than a third of IVAs fail
James Nicholls says
Debtcamel, you are an excellent resource and one of the best sources of really good advice on debt.
I think you are providing a superb service and deserve some kind of recognition.
The “professional” insolvency industry is almost entirely pro-creditor i.e. banks and accordingly hardly anyone fights the debtors’ corner.
Your input is invaluable.
Paul says
Hi currently 5 years into an iva and they are looking at increasing the time for another 24 months as there is some arrears. My father in law has offered to pay it of and have come up with an offer. After speaking to the iva company they still want to know if ihave equity in my property and said they could still look at an equity release or chance of remortgage. I know for certain I have a lot of equity in my property by really don’t want to release it. I am sick of this iva being over my head for so long and when I thought I could put a final offer in they hit me with another bombshell. Is there anything I can do
Sara (Debt Camel) says
Hi Paul, I think you will agree with some of the points I make in an article just published this afternoon saying how fed up people are with IVAs that seem to go on forever, https://debtcamel.co.uk/how-long-do-ivas-last-how-many-fail/!
My guess is that if your IVA is in arrears, your finances aren’t great and the chance of being offered a remortgage are about zero even if you have a lot of equity. You could point this out.
Paul says
Yes I 100% agree with what you have wrote. Evertyime you are getting near the end of the iva the term gets increased. Doesn’t seem to be any light at the end of the tunnel. If I carry on to the end of the term it will have gone on 7 years.
I agree that I wouldn’t get accepted for a mortgage but the idea of me having to release equity could end up paying a loan for years rather than paying the iva.
Sara (Debt Camel) says
hi Paul, Unless your original IVA mentioned a secured loan specifically (or you later agreed a variation that did) then it is very unlikely that you would have to take a secured loan – see https://debtcamel.co.uk/ivas-complain-secured-loan/.
Sarah says
Hi, some really great info on here! I’m nearly a year u to my IVA, having read so much info I’m co concerned about this hanging over my head forever! My total payments once completed would work out to be around £8600, considering what I’ve paid and not defaulted once on payments, do you think a £4000 offering to ‘buy out early’ would be considered a reasonable amount because I’m splitting up with partner and won’t be able to afford any IVA payments, even much reduced? I’m hoping a family member can help me in the ‘one off sum’ to get me out of this and move on with my life! Any advice would be gratefully appreciated
Sara (Debt Camel) says
Hi Sarah, it can be hard to predict what creditors will accept, but if you explain your circumstances they should certainly consider this offer. Having said that, if you don’t have a house with equity, you might also want to consider bankruptcy if it would be difficult for your family member to afford so much to help you.
Danni says
Hi,
I have been on my IVA for 5.5 years. I had a small break of around 4 months when I was on maternity leave. Before being in an IVA I was in a DMP- where I paid huge repayments. I have lived in Australia now for 8 years. I have always made payments but am not able to do so anymore as the fees to transfer the money are getting too big as are the payments. I worked out I had around £1000 still to pay on my IVA 9 payments of about £105. My supervisor said he would go to my creditors with a paid to date offer in the hope to settle the IVA early. However now they are dragging their heals with the meeting and requesting more money for arrears. Any advice ? I have sent my income and expenditure through and told them
I have no money to pay. Having lived overseas for so long can they do anything? What should I do I am so frustrated as I have always made my payments and they do not communicate well.
Any advice would be great
Sara (Debt Camel) says
Hi Danni, so late in an IVA if your I&E shows you can’t make the payments I would be surprised if your creditors do not agree to complete your IVA. I suggest you should put in a formal complaint to the IVA firm (if you don’t know how, tell me the name of the firm and I will send you a link) saying that you can’t afford to make any payments and that you want the creditors meeting to agree the closure of your IVA to be held as soon as possible.
Jen says
I really need help here, one year in to my IVA never missed a payment, however after much badgering from them they went after PPI and secured £12,000 and am now told that this was a windfall ! This was money I had paid in and was owed back, I agreed for them to collect it but, was told that this will NOT go towards my IVA. They said I owed £30,000 which is far from the truth and yet have been paying £149 a month for 13 months now and they have an additional £12,000 what should I do as my parents are about to sign their house over to me which is worth £175,000! I need dome help badly ?
Sara (Debt Camel) says
Hi Jen, if you were told the PPI would go to you, not to them then you should put in a formal complaint to your IVA firm as you were misled.
How large your debts are, if you think the 30k figure is very wrong, send the IVA firm an email asking for a list of the debts so you can check it.
Your parents’ house – they absolutely must NOT sign this house over to you until you have an explanation in writing as to how this will affect your IVA, because it is likely to be treated as a windfall asset for your IVA. If your parents don’t know about your IVA, I am sorry but you simply must tell them otherwise this could be a disaster.
Andrew says
Hi , looking for some advice please.
I am 3 years into my iva and have a fair amount of equity in my home , but my wife in in a dmp also and had a baby a few months ago so we will be looking at a hefty childcare bill in a few months .
A family member has offered to give us an amount of money which is equal to the remaining 3 years of my payments (including the extra year if we can’t remortgage) , do you think I stand a good chance of acceptance of full and final based on the fact that we may have difficulties in a few months and as both our credit scores are bad the chance of equity release is unlikely ?
Many thanks in advance .
Sara (Debt Camel) says
Hi Andrew, given the circumstances i would have thought there is an excellent chance of that being accepted
Thomas says
Hi
I’m from march 2015 on iva total to pay in 6 year 17000, my father offer me 17000 to paid iva but he would like me go back to Poland if I accept this gift, do you think it’s good offer and reason if I say to Iva company
Sara (Debt Camel) says
I think it’s a great offer and you may well be able to settle for less. After all your creditors are not going to want to try to chase you in Poland so they would probably rather get some money now.
Geoff Procter says
Hi
I took an iva out in 2011 but after 5 months my wife’s mother passed away
We paid full amount of £79000 pound back to come out of iva but can still not get credit why?
Thanks Geoff
Sara (Debt Camel) says
Hi Geoff, even though you have repaid all your debts in full and your IVA has completed, the IVA marker will remain on your credit record for 6 years from the start date, so it will be be disappearing next year. Personally I think this is an unfair aspect of the system and if you repay all your debts in full the IVA marker should be deleted from your record…
There isn’t anything you can do to remove this marker, but you can get the rest of your credit file in as good a shape as possible so that when the IVA marker goes your credit rating will be excellent, see https://debtcamel.co.uk/credit-file-after-bankruptcy/ for details.
Sally says
I have been in an IVA for 2 years.
I currently pay £110 per month.
My son who is 16 is going to get some money from his grandparents and he would like to give this to me to pay off the IVA.
So with the remaining 36 months x £110 this is £3960. I would be able to offer £2600.
I am currently on a fixed term contract with my job, due to end in October and I am looking into joining the police after this. These are both reasons I would like to get this IVA finished.
Do you think this amount would be accepted?
Would there be any issue with the money coming from my son? Would the fact he is 16 be a problem?
Thank you.
Sara (Debt Camel) says
That is very sweet of your son, but I am not sure your IVA firm would be prepared to accept this money from a minor.
Sally says
Thanks Sara,
I could tell them it came from another relative instead but then it would get complicated because as I understand it they have to write to the Iva firm offering the money etc.
My son knows the circumstances as obviously he has been affected due to budgeting etc but I also explained it to him as a financial lesson on the dangers of debt etc.
He knows he would get the money back but it’s still a gift. He just knows what a burden it is for me to have this and wants to help.
Do you think the amount to be offered sounded ok?
Do you have any advice on how I could resolve this?
Seems sad to have the opportunity only to be from the wrong person!
Sara (Debt Camel) says
I would have thought it is unlikely that this offer would be accepted at the moment as there isn’t a clear reason at present why you won’t be able to carry on with your IVA.
I also think – and this is my personal opinion – you shouldn’t take the money from your son. Over the next few years that could pay for driving lessons and a rental deposit. Isn’t that what his grandparents would have wanted? There is no guarantee you will be able to repay this quickly, indeed if you could, you would be able to carry on with your IVA.
David says
Sally best of luck with joining the police, unfortunately they are very hot on debt and if you had an iva or been bankrupt you are normally looking at three years until you can join, lots of officers seem to get in debt once in the job though and its not seen as serious then, I’m really not sure why. Do wish you the best of luck though, as I completed my IVA in 2013 after having PTSD and now been in for 17 years
Dave
D Thompson says
Hi, im a bit confused. I have been in an IVA for 2 years in July with it due to end in July 2019. I have paid £163 per month, ( the total debt was approx £25500 and the amount agreed was approx. £18500, to date iv paid £3190 with no arrears inc some extra payments due to overtime). Im due to start a new job in Feb where I will be earning a significant amount more which will allow me to pay around £1200 extra a month on top of £163 I currently pay. I have based this figure on the current limit im allowed to earn and then paying them 50% of the difference that I will be earning. I rang to see how long this will take to clear, they were very cagey telling me that this wouldn’t be cleared until 100pence in the £1 had been paid and then they would also look to take their fees also. Im usually quite good at working things out, but they made it as clear as mud and couldn’t give me a date even though I was giving them figures.
Sara (Debt Camel) says
Hi, first well done on the new job, I hope it goes well!
It is amazing how hard work it can be to get some IVA firms to answer very reasonable questions :(
I suggest you email them saying that you understand the exact answer will depend on your actual earnings, but could they please give you an indication of when your IVA will have been repaid in full, including their fees, if from March (presumably when you will first get paid) you start paying them £1,361 a month.
D Thompson says
Thanks for this I will do and let you know how I get on!
Ashley says
I have 2 years and 4 months left on IVA I am due to be made redundant could be up to £12000 due to long service will the IVA company expect to pay them this money as well as paying my monthly amount (£175). What would happen if I didn’t tell them about my redundancy pay
Sara (Debt Camel) says
Hi Ashley,
you will need to talk to your IVA firm about this, but the usual situation for redundancy is that you can keep the equivalent of 6 months take home pay – which you can then use to carry on with your IVA contributions for 6 months – and the rest has to be paid into the IVA. See https://debtcamel.co.uk/cant-afford-iva-payments/.
If you don’t inform them of your redundancy, you are breaking the terms of the IVA. This is a really bad idea.
Darren says
Hi
I have just entered into the 5th year of a 6 year IVA. I have made an offer to my creditors of £2000 which my parents are willing to pay to end the IVA. I have provided a number of reasons for the settlement including the fact that my housemate with whom i have a joint mortgage is moving out to live with his girlfriend. Although he will continue to pay half of the mortgage, i will now be responsible for all of the household bills rather than just 50% of them. I have recalculated what i can afford to pay in light of this change and instead of my current £315 that i pay each month to my IVA i can now only afford £86. I am waiting to hear back on my offer.
An issue that has arisen though is my housemate has been to see a mortgage adviser about him getting a new mortgage with his girlfriend. He told the adviser about our current property (which we have up for sale). As part of my IVA, i was told that a loan that we took out jointly as part of the mortgage had to be inluded in my IVA, even though it was a joint loan with my housemate. As i am wanting to settle the IVA early, and therefore clear all debts including this loan, the mortage adviser told my housemate that he would advise against settling the loan early as this would negatively affect both of our credit scores.
I would have been under the impression that once a debt is ‘settled’ by mutual agreement then it would not adversely affect either of our credit scores. Do you think that by me settling my iva would impact negatively on my housemates credit rating, given that a loan on my iva is a joint loan with him?
Sara (Debt Camel) says
If your IVA settlement offer is accepted, you housemate will then become fully liable for the remaining amount of the joint debt. So the settlement won’t affect his credit score, but neither will it get rid of the loan…
Your IVA firm should be able to confirm this to you.
Mandy says
Hi
I have been made redundant after 20 years service. I have made 31 payments of £332.00 per month & have 29 payments left. I orginally owed £48,000. I dont know what to do? I have read that I will be allowed to keep aprox 6 months pay from my redundancy payment & the rest would have to go to the IVA. But due to my asthma which is severe & my age-49 years-I dont think I will get another job that pays as well as this one. I was payed more than the current market place due to my lenght of service and having checked on jobs available in my area and the type of admin work I can do would pay about £16-18,000 & my current salary is £25,000. Even if i am lucky to get another job then I would not be able to afford to pay an IVA. I dont have any assets-I only rent. Can I offer the IVA a final payment using my redundancy payment? If so how much should I offer? Or should I go bankrupt?
Sara (Debt Camel) says
Hi Mandy, it is of course a great pity that you didn’t go bankrupt originally as at this point you would be almost at the end of your 3 years of monthly payments :(
You need to discuss your options with your IVA firm. However the best thing usually is to spend the next six months job hunting and using your 6 months money from the redundancy to pay the IVA contributions and then look at your situation at the end of that, or when you take a new job. At that point you will have paid 37 months contributions, plus the extra money from your redundancy that has to go into your IVA. If you can no longer afford the monthly payments, you can ask your IVA firm to propose to your creditors that your IVA is completed.
If they refuse, then you will have to look at your options at that point – bankruptcy may be one of them.
Mandy says
Hi Sara
Thanks for your reply. I have had a offer from my employer today offering me £29,000 redundancy. 6 months pay would be £9978 which would leave me £19,000-would this not be enough to offer the IVA as a full payment? I just want this to end as I wont get a job where I can afford to carry on.
Mandy
Sara (Debt Camel) says
I would expect that will be enough to end complete your IVA. But it isn’t a question of “offering it” – this redundancy money HAS to be paid into the IVA. And normally the IVA firm will want you to have tried to find another job before they accept that you can’t.
You do need to talk to your IVA firm about this.
Mandy says
Thanks Sara, I will call them & see what happens.
Mandy
Kim says
Hi does a tax refund count as a windfall when I have an IVA. I have just over a year to run on my IVA. Thanks.
Sara (Debt Camel) says
If the refunds relates to a tax year during your IVA, it isn’t a windfall but it is effectively extra income during that tax year. You may have to pay some of this to your IVA – you need to talk to your IVA firm about this.
Sam says
Hi there, I’ve had an IVA since 2012 and it’s due to end in 2017. Ive recently had a review and as my partner earned more last year than the year before (he is self employed) the IVA firm have said that my payments will have to go up by a considerable amount or I can make an offer to end the IVA early. The amount that they have advised I would possibly need to offer is a lot less than what I would pay back if they increased my monthly payments so I’m a bit confused as to why my creditors would even consider accepting it. Also, the IVA firm have requested that I would need to transfer the settlement payment to them before they have even made the offer to my creditors. Is this normal procedure?
Sara (Debt Camel) says
Hi Sam,
I suppose your creditors may prefer a bird in the hand … after all your partner may not have such a good year this year.
Asking for the funds to be transferred to the IVA firm before making the offer is not normal procedure. The settlement offer is still just a proposal. Prior to making it the firm would like to see evidence that the funds exist and proof of where they come from. As long as it can be provided the firm should not refuse the debtors wish to make the proposal. That said, if the firm does hold the funds, you could argue the creditors may look more favourably on it but I doubt it makes much difference.
Kim says
Hi, I understabd I can keep some money buy for emergencies. With an IVA I obviously cannot get finance for a decent care but need one to get to and from work. I have had a series of old cars which inevitably need repairs and break down regularly. Last year I managed to save £1000 to try and get a better car, which in January this year I did. Whern submitting bank statements to make a final offer on the IVA will this count against me. I can show n bank statements the car expenses. Thanks for yor help.
Sara (Debt Camel) says
Hi Kim, it is pretty unusual for anyone to be able to make their IVA monthly payments and save up £1,000 – but I don’t think it should be a problem if you are making early settlement offer.
Mutz says
Hi Sara,
What happens in a case where you just stop paying your IVA sum?
Sara (Debt Camel) says
If you stop paying the monthly payments, at some point your IVA will failed. Your IVA firm may have the right to make you bankrupt, but that would rarely be done unless, for example, you had inherited a lot of money and were refusing to pay it into the IVA. After a failed IVA your creditors way start chasing you for the debts that were included in the IVA.
If you can’t afford to make the monthly payments, read up about what your options are: https://debtcamel.co.uk/cant-afford-iva-payments/
Caron says
Hi.
Iva due to finish in December 2016 . We have been asked to release equity from house but mortgage provider have said not possible.. Now iva company say we will need to continue for a further 12 months at our normal rate of £580 per month. When we get to December can we offer a final payment to get out of iva. Family member has said they will be able to gift us £6000 in January 2017 do you think this would be likely to be accepted to finish early. If we paid our monthly payments for a further year the total would be £6920.
Sara (Debt Camel) says
I think that’s a serious offer – it’s always unpredictable how creditors will react but it’s worth a try.
Suzanne says
I have been in an IVA for 2 years. The original debt was £40000, my creditors settled for £24000. I pay £346 per month. I am about to receive £45000 divorce settlement. Firstly will I have to pay all this into my IVA or can I pay the balance of the £24000 – my monthly payments. I really don’t want to pay all of this money into my IVA.
Sara (Debt Camel) says
First, as always, you need to talk to your IVA firm about this. But it would be normal for you to have to pay in the whole amount I am afraid. Your creditors haven’t agreed to settle for 24k, there is a “windfall” clause which says that you are obliged to pay in extra lump sums you get such as this one.
If your IVA doesn’t have a “statutory interest of 8%” clause, you should get some money back, but with the statutory interest I think it’s unlikely you will get much if anything back. Of course you won’t be having to make any more monthly payments as this should fully settle your IVA, which will be good.
ELAINE says
my IVA company have had £9,500 from my PPI claims my total debts were £ 18,000 i have been paying £200 per month for30 months (£6,000) will this mean my IVA will finish early? or will i have to carry on paying the whole 62 months meaning I am paying more than i owed??
Sara (Debt Camel) says
The most you can pay will be the amount you owed plus the IVA fees plus (sometimes, not all IVAs include this) 8% per year statutory interest.
The other thing to remember is that the IVA firm will probably have paid some claims firm a lot of fees to reclaim the PPI, so that won’t be £9500 going to you creditors, it may only be £7000 or even less.
If you think you are getting near the “fully paid” point, ask your IVA firm to confirm this.
Elaine says
thank you thats very helpful I noticed all the fees the IVA company take talk about a pound of flesh no wonder they are keen to take you the IVA route it makes them a lot of money
John says
Hi. We have submitted our documents for an IVA to be considered, but we have not started yet. We have doubts and concerns. The total debt will be around £30,000. We will be included in our parents will (Around £15,000) which we would like to avoid going towards the IVA if there happens to be tragic circumstances. More complicated is that I will be included in my uncles will who is currently aged 76. I am likely to share an inheritance of family land with my sister and two brothers. It’s a 15 acre field which has been in the family for nearly 200 years. I would be devasted if i caused a danger of the family loosing ownership. And I’m unsure how I can get equity out of it when it’s shared between 3 others.
I am considering asking everybody to modify theirs wills, and Leave anything in my children’s names, aged 2 and 7. Is this an acceptable thing to do?
Thanks for all your advice so far. Very helpful.
Sara (Debt Camel) says
Hi John, it’s good you are thinking about this now before you sign, too many people wander into an IVA because it offers relief from their debts without thinking it all through. 5 or 6 years is too long to take a risk that a 76 year old will survive.
Yes you can ask family members to change their wills to leave things to your kids. (Strictly a minor can’t inherit land but it can be left in trust.)
susan says
Iam in my 3rd year of an iva, come September it will be my 4th year. My bf said he will gift me 2000 pound for full and final settlement, I am struggling to make make payments of 85 pound a month even though i have a good job on good money , i am a single parent with 3 children 2 of the teenagers … the first two years of iva i paid 100 a month then last year they put it up to 320 , i complained as there was no way this was viable , a month or so later they dropped the payment to 85 pound …
On paper i can not afford even the 85 pound a month, i borrow money every month to get by of family and bf who are a bit fed up to be honest ….so if i look at the next 24 payments at being 85 pounds , an offer of 2000 pound would be slighly more than they would get of the monthly payments … or my iva may even fail if any other emergencies arise…my boiler broke which i had to borrow 1500 pound we went three weeks without heating and hot water also my cooker broke recently so i borrowed money to get a new one.
what what your advice be finding life very hard at the moment
Sara (Debt Camel) says
Hi Susan,
if you are renting, then £2000 sounds a very generous offer which is very likely to be accepted. if you are buying, then you may in theory be looking at an extra year of IVA payments as you won’t be able to remortgage – but given your situation I think an offer of £2000 combined with an income and expenditure sheet that will show you are having trouble affording the £85 a month could well be accepted – you need to talk to your IVA firm about this. Good luck!
Susan says
Thank.you for your reply …I am.buying my house but very little equity init due to remortgaging a couple of times. …lived here for 23 years …should have been paid off now….. tjanks again great site for help on iva ….my advise to anyone DO NOT GET AN IVA I was even told I had to cut my children’s dinner money down….I complaimed …They saI’d all the costs for children’s expenses is in the guide lines. …I was never told this ..
Sara (Debt Camel) says
If there is less than 15% equity, this is worth mentioning, as that means there would be no need to pay an extra year’s payments. So this makes your offer look “better”.
Becky says
I have been in my IVA for 18 mths i owed £12.000 by the end of my 60 mth agreement i would of paid back £2,500, Im now struggling to make payments since my son left home and now my daughter is looking to leave so will loose the little rent she pays too.
Im looking to sell my home and pay off my IVA with the £58,000 equity i have. However i will need £2,000 to pay selling fees and £50,000
to put towards a new home .do you think my creditors will accept an offer of £6,000 and do i have to pay the agent a fee as they have told me to clear my IVA will cost me £15,000, Any advise would be greatly appreciated has i’m feeling a little trapped at the moment.
Sara (Debt Camel) says
I’m sorry you are in this situation – realistically you should never have started this IVA as your family situation probably wasn’t going to be stable enough for the 5/6 years.
However you are where you are and have to find a way forward. I doubt your creditors would be prepared to let you keep 50k of equity and only accept 6k. If you sell your house under the T&Cs of your IVA the whole amount is due to be paid towards your debts until they are repaid in full and that may well be 15k (your debts plus statutory interest at 8% plus the IVA fees).
Have you considered other options such as getting a lodger?
Becky Kennedy says
Thank you for your reply.
I think your’e right i should never have gotten into it but it seemed like the only way out at the time.
I don’t think a lodger would pay enough as my 10 year fixed rate mortgage as also just ended so i’m paying extra on that also.
I have lost income £450 PM .
I would sell , clear my IVA in full and rent a property but given that i have a dog and No credit score ,that don’t look to hopeful either.
Brian says
Hi, I’m coming up to the end of my 5th out of 6 year IVA paying £100pm. 15 months left, I’m looking at paying the iva off which in theory will cost me £1500, I’m hoping to offer £1200, present from Mum!
Last month I got married, my wife has a Mortage on her property which She owns pre wedding.
I’ve contacted my iva company and got the forms to fill out regarding the expeniture form, include my wage slips etc.
I’m concerned now I’m married that my creditors could look into my spouse house and earnings etc?
My expenditure is based on my half of the bills.
Any help will be much appreciated, I’ve not yet told the iva company that I’m now married.
Sara (Debt Camel) says
Your wife’s house is safe. Putting down your expenditure as half of the bills is reasonable if you earn about the same. It doesn’t matter that you are now married, she has no liability for your debts and is not a party to your IVA.
make it clear that the £1200 you are offering is coming from your Mum.
Brian says
Thank you. Do you think I’ll get away with offering £1000? Also I was thinking about not mentioning I’m now married, can’t see how they’d find out or need to know?
If the £1000 was declined I could always up the offer or is it best to go in with a high offer?
Sara (Debt Camel) says
It’s best to make a reasonable offer. Unless you can show you are having difficulty with the current repayments, it’s unlikely an offer much below what you will be due to pay in the rest of your IVA will be accepted, so there is no point in wasting people’s time.
Chantelle says
Hi! I am 35 months into a 60 month agreement, having paid £7183 of a £12,000 requirement (original 60x£200, changed to £287 p/month in 25th month). I am nearing 55 and have been considering cashing in one of my pensions to increase flexibility. I live away from where my family are currently and would like to get closer to them and support them with my Mum and Dad who are in their 80’s I have no property as my son’s father left us with no money and debts a long time ago and the interim period has been a struggle during which I could not get on the housing market. Cashing in all my pensions to buy a property in that area looks to be a bad idea, tax wise, but cashing in one will mean I have approx. £30k to pay my IVA off, secure a tenancy closer to home (IVA’s mean your chances of being able to rent are significantly reduced unless you pay upfront) and pay for living expenses while I find a new job in the area. I had radio chemotherapy treatment for cancer last year and, as such, have been considering the whole pension thing as I believe my chances of reaching pension age have significantly reduced. The £30k is just an estimate obviously. In what order should I do things and how much do you think would be a reasonable offer to settle my IVA?
Sara (Debt Camel) says
First I have to say that it is a pity you ever started this IVA – if you had gone bankrupt by now these debt would have all be written off and you would be at the end of the 3 year period you would have had to make payments to your bankruptcy for.
But you have started it, so you have to make the best of where you are. You need to add up how much you would have to pay if you carry on making your current payments for the rest of your 5 year term when you get to 55 – the original “£12,000” was never a maximum requirement. Then you need to say to your IVA firm that you want to offer a final settlement in [month after you are 55] of £x,000 based on you withdrawing the amount from your pension, and that if this is not agreed as a final settlement you will not be accessing your pension but will carry on with the IVA.
It is important that you do not withdraw any money from your pension without written confirmation of this arrangement being acceptable from your IVA firm. If you take the money out and then offer it, the money is classed as a windfall payment and it would have to be paid into your IVA and you would still have to continue with the other payments!
Chantelle says
I always thought bankruptcy was the last resort but notice you have said this to a few people on here. It does now feel that entering the IVA was the wrong decision as I get all the negative aspects of bankruptcy (stigma, poor credit history, invasion of privacy) and none of the benefits (less total payments and for less time). Are the IVA companies miss-selling?
So the total amount payable really is the total amount you started off owing, not the amount they seem to have agreed at the commencement of the agreement? So if I suddenly had a windfall into my account, they could take all of it in payment of the total amount?
Thankyou so much for your advice by the way. It is really difficult to discuss with anyone as it’s such a ‘guilty secret’.
Sara (Debt Camel) says
I think many IVAs are mis-sold – especially if someone has no assets and their job would not be affected by bankruptcy. In practice you will find it almost impossible to get any recompense for this – you probably said you didn’t want to go bankrupt when you applied and this would have been noted on your file.
The total amount payable is the total amount you owed plus the IVA fees (a few thousand) plus 8% statutory interest on the debts (some IVAs exclude this, you would need to check your T & Cs). So if you suddenly inherit money, win the lottery or take 50k out of your pension, that is the total you would have to pay. Of course this should have been clearly explained to you at the start but it may not have been…
So you can still use money as a full and final settlement, but you need this to be agreed in advance of you taking the money out.
Chantelle says
I will write to my IVA company straight away to make an offer for full and final settlement of the debt after I am 55 (October 2016)
Thankyou so much for your advice.
Chantelle says
Hi! My last IVA company was taken over by Creditfix. I am waiting to hear about cashing in some of my pension from my Pension provider to make a full and final offer to pay off my IVA, however, in the interim, a Creditfix partner has been in contact with me rather insistently to offer ‘a new option’. I have looked briefly at what the offer is and it appears to be a loan. Is there a catch?
Sara (Debt Camel) says
edited – I have now written an article about this option https://debtcamel.co.uk/perinta-loans-end-iva-early/
Luke says
Hi
I am 13 months into 60 months of my IVA of total aticipated claim of £5,953. Is it possible to cancel IVA ? If yes, what are the consequences?
Thanks
Sara (Debt Camel) says
I’m not sure if you are struggling at the moment making the IVA payments, or if you are just regretting the choice of the IVA? This is important, as your situation is quite different if you can’t afford the monthly payments from if you would just rather end the IVA now.
If you are struggling, one option to consider is whether you would be better switching to a Debt Relief Order, see https://debtcamel.co.uk/end-iva-change-to-dro/
There isn’t a “I want to cancel” option in an IVA, you have signed up to a formal 5 year contract. You basically have to break the terms of the agreement by refusing to pay the monthly payments. Then after a while the IVA firm will “fail” your IVA. The problem with doing this is that you still have your creditors to settle with and in addition there are the IVA fees that have to be paid. Also if the IVA firm has started to try to reclaim PPI, it could take many months before it will fail your IVA.
I’m not sure that this could be a better option for you than just letting your IVA run to its conclusion unless there is a particular reason not to do this? Ending the IVA will not remove the IVA marker from your credit file. Nor will settling the debts.
I don’t know who you spoke to for debt advice before starting this IVA – you might find it useful to talk to National Debtline 0808 808 4000 and run through an income & expenditure sheet with them and ask if you have any good options apart from continuing with the IVA?
Weff says
I’m in my 4th year of a 6 year IVA. My partner is not included in the IVA. If she receives an inheritance would this effect my IVA in any way? Also, if she wanted to lend me some if this money to make a settlement offer, would this be controversial and problematic?
Sara (Debt Camel) says
Your partner’s inheritance should be safe. Yes this can be used as the basis to make a settlement offer, this would be pretty normal. It is unlikely the creditors would agree to accept a lot less than the remaining payments, but you may well just want to get the IVA over with!
Chantelle says
Hi Sara, you gave me some advice in June about proposing a full and final settlement with my IVA firm which I have done. They have advised me on the figure that they say they feel sure my creditors will accept.
What do I have to have in writing from either or both my creditors and/or my IVA firm?
Once I have this information, can I receive any amount of money into my bank account i.e. more than the sum accepted by my creditors?
Thankyou
Sara (Debt Camel) says
I think you need to talk to your IVA firm to get precise timescales. They should be able to say when the creditors meeting will be – your IVA firm should be able to tell you very quickly after that if your proposal was accepted. You need confirmation from your IVA firm in writing that after your proposal has been agreed you can withdraw more money from your pension and it will be safe. If your IVA firm will not confirm this, you should consider only withdrawing the amount needed for the F&F settlement (after taking tax and charges into account). Then withdraw the rest after your IVA has been closed. But I hope your IVA firm will allow you to do this earlier.
Nicola says
Hi Sara, could you help me please. I entered into an Iva last october 2015. I own buy to let properties. Most of the mortgages on the properties are interest only. With the interest rates potentially being reduced in August I’m just wondering how this will affect my money contributions to the Iva. I will have surplus money available as all my mortgages track the Bank of England base rate. Can this extra money go towards the repayment of the mortgage or will it be classed as extra income and I will have to increase my monthly contributions ? Thanks very much.
Sara (Debt Camel) says
My guess is that it will be treated as decreasing your expenses. Perhaps you have some other expenses that have increased?
But this is all rather premature. there are a lot more rumours about base rate changes than ever actually happen!
Jason says
Hi,
Im finding hard each month to get the money to pay my IVA which is £381. My wife cant work because of health problems and i have 3 children to support. I have a year and a half left to pay. I was just wondering what you would suggest i do. Im worrying myself sick each month with juggling the money etc.
Sara (Debt Camel) says
Hi Jason, I think you need to talk to your IVA firm about whether your IVA payments needs to be reduced. If you would like to get an independent idea of what might be “affordable” for you, you could talk to National Debtline (0808 808 4000) and they could go through an Income & Expenses sheet with you? As you are so far through your IVA, I would hope your IVA firm will be sympathetic to your situation.
Jack says
In last year of iva 1 year added as I have my own house, owe1105 in payments had inheritance 12,000 offered 2500, I need new car for work mine gave up , also essential house repairs said 7500 for car I’m 56 need to last long time, need new garage and porch roof , new back door, meeting next week , plus my son moving out so lose 130 a month so only pay 85.00,will they accept this is nerve wracking experience , plus my health deteriorating stressed to death , will they accept can’t get credit to get these things which are essential
Sara (Debt Camel) says
You have to talk to your IVA firm about this. It’s a pity your inheritance didn’t come a years later, but your firm may well say it all has to be paid into the IVA.
Dave says
Hi,
Please can you advise me on this situation regarding my IVA? I have 60 month term, I am in my last 9 months and just lost my job, appealing but could be pointless, I have contacted my IVA firm with my termination letter from my ex employer, who will discuss my F&F settlement, but worried on what to offer? I paid £501 per month after this month I Will owe about £4,350,so looking at offering £3=3.5k to just get this off my back, but due to being dismissed I may find a job a lot harder to achieve may take a lot longer, I am 55 and know there is age discrimination going on out there, I would be gutted if all this falls apart, when I am so close to finishing the agreement
Sara (Debt Camel) says
Have you been made redundant or have you been dismissed for some other reason? Are you being offered a settlement / redundancy package? if so, how much? If you aren’t where would this settlement offer come from? People in an IVA don’t usually have savings.
If a relative would be giving (loaning?) you this money, an alternative would be to take a 6 month payment break for you to try to find more work and if that isn’t possible ask your creditors to agree that your IVA should be treated as completed.
Chris says
Hi. I’m 53 months into a 60month iva. Total debts owed was roughly £24k. Currently paying £100 a month and approx £500 extra every 6 months due to work bonus. Plus had a few ppi claims paid in. Total paid back so far is £14k. The Mortgage is in my partners name and he’s not on the iva. Very worried as had a letter today about the equity clause. Even though im not named in the mortgage I’m worried about this as don’t want anything done regarding this (such as getting house valued etc) in case I am liable for some of the equity. (my initial letter said I may have a beneficial interest as paying towards bills). My partner is not happy about this at all. Thinking of offering an early settlement to just get rid of the Iva , if I can get the money from someone . Does a certain amount have to be paid back eg 75% of debts owed or is it likely an offer of approx £4k be accepted to settle early? If I were to continue with the agreed monthly payments I would only be paying approx a further £1800. Any advice on how much I should offer to settle early would be appreciated. Thank you.
Sara (Debt Camel) says
You need to look at the exact wording of your IVA. It can’t say you “may” have a beneficial interest, either a beneficial interest is included in the IVA or it’s not. Until you know what this says, you can’t guess what sort of offer might be acceptable.
Chris says
Thank you vey much for your reply. The letter states ” as you live in your partners mortgaged property and you have explained that your name is not on the deeds, we have not included the property within your IVa proposals.
Please be aware that it is possible you may have what is referred to as beneficial interest in the mentioned property. Creditors may consider that whilst you do not actually contribute towards the mortgage payments, you contribute a fair share of the total household expenditure. Therefore you would have a beneficial interest in any equity in the property.”
I really don’t know what to do as me and my partner are not on good terms. I think the equity in the property is approx £15k . Therefore I assume mine would be 50% of this? He is not willing To release the equity as it is my IVa for Debts I had before we were together. would I be better trying to offer more to settle early? I know you can’t give an exact figure but any advice would be much appreciated. Thanks for your help.
Sara (Debt Camel) says
In that case the property isn’t included UNLESS you were later told something different. I suggest you go back to your IVA firm and ask why you have been sent this letter about equity release. Because if the property isn’t included, your IVA is going to be ending at the end of the 5 years :)
Chris says
Thanks so much for your response . I don’t believe I was told anything at a later date regarding this and have been through all the paperwork about 10 times this weekend stressing over it.! Because it said I would have a beneficial interest I was worried, but as it says The property is not included in the iva it just didn’t make sense . I’ll give them a ring tommorow and hopefully this will be the case. Thanks once again for your response.
Della says
Hi,
I’m currently 2 years gone in my IVA paying £107 per month and own a small shop, I want to pay off early to get this from hanging over my head so I have had to tell my parents as they recently had a bit of a windfall, my 35 payments left would mean I owe £3,745 but my parents are willing to give me £5,000 to make sure it’s cleared. Do you think it’s got a good chance of being accepted if I offer that much over?
Sara (Debt Camel) says
Do you have any equity in the shop that you may have to try to release in the last year of your IVA? If not, I would suggest just offering the rest of your payments – your creditors may well be happy to get the money now!
Della says
Thanks for replying
No there was no mention of any equity release. What if I offer just the payments and they turn it down? Do I then have to wait to offer more?
Sara (Debt Camel) says
You need to talk to your IVA firm who will want to look at your current situation – obviously they will be interested if your business has suddenly started making a lot more money! But if it hasn’t, then it would be normal for the IVA firm to recommend to the creditors that they accept an offer to pay the remaining amounts now in full settlement of IVA.
Kirsty says
My husband is currently paying into an IVA. He has 9 months left. However he received a letter the other day saying he owes £2400 due to additional monies earned from his overtime (my husband overlooked this in his agreement and is now in breach – although he has never missed a payment). This is calculated from year 2,3 & 4. The IVA company have offered an extension for 6 months so he can repay this but obviously we don’t want to have this hanging over us for another 6 months. What are the rules about family members or me paying the £2400 off on a monthly basis ie. £300 a month as a gift?
Can you help?
Sara (Debt Camel) says
Are you suggesting that you would like to repay this over the next 9 months so that at the end of the IVA he will have repaid it all, no extension?
If you are, I would have thought the IVA company would be happy with that. Make sure they realise the money is coming from another family member and that they pay it direct, so they don’t jump to the conclusion he can repay £300 a month extra himself!
Kirsty says
Yes thats exactly what I am suggesting, I have spoken to various family members and they are willing to help out with this so we can get it over and done with.
Thats great thanks for your help Sara :)
Kirsty
Zareen says
Hi Im on my 4 th year of Iva.i can’t afford to pay it anymore as my work has cut down my hours. I live in a shared ownership property and I owned 40 % of it.i borrowed 55000 and still have 50000 to pay on my mortgage.what will you advice me
Sara (Debt Camel) says
Hi Zareen, I think this article is more relevant for you: https://debtcamel.co.uk/cant-afford-iva-payments/. read that and talk to your IVA firm about what your options are – reduced payments, a payment break etc
Sam says
Hi, my IVA is due to finish around December 2017, however myself and my partner have hated every second of being in the IVA, I’m am also going to university in March 2017 therefore will be a full time student for 3 years and will not be able to make the current payments, although my husband will probably be expected to make his. We have the opportunity to put forward an offer as a family member has offered to help us. Our original debt combined was for £26000 which we have paid just over £20000 back to date, they have said that our projected payments would mean us paying around £8000 back, firstly do you think an offer of £6500 is acceptable and also, do you think it is worth contacting our mortgage company regarding equity in our property before we put forward the offer? I did think that the mortgage company would not be keen to release money or allow us to remortgage considering we are in an IVA but I’m not 100% sure on their view of this? Any advice would be greatly appreciated.
Sara (Debt Camel) says
It would have been a good idea to talk to your IVA firm about this sort of option before deciding to start a uni course next year.
You say your projected payments would be c8,000 – is this on the basis of paying until Dec17? If there is equity in your property it may be necessary to pay for another year, in which case 6500 doesn’t sound like such a good offer.
On the other hand you have paid in a lot already in relation to your debt – has any PPI been reclaimed?
It’s very hard to remortgage whilst in an IVA and the fact you will be going to uni is likely to make this more difficult – I doubt this will be possible.
Garry says
I’m in the 61st month of what I thought was a 66mth IVA, I have contacted my IVA advisors for the date of my last payment and now they are saying my IVA is for 84mths. All my paperwork say 66mths, I have asked them for the paperwork that says 84mths but, this has not been provided. Can they just extend my IVA without telling me?
Sara (Debt Camel) says
They can’t extend without telling you. 84 months would be unusually long. I suggest you ask in writing – by email is best – for proof that you have agreed to this.
Mrs P says
Our IVA reaches the 5 year mark in Jan 2017 so we are just doing the completion requests – valuations on property and remortgage attempts which were unsuccesful. We have £37k equity in our property so we know a further 12 months payments will be requested. We pay £468 a month so thats another £5,600. We are wanting to make a F&F ASAP as I want the IVA noose gone from round my neck! My husbands wants to offer low around £3500 as his dad has offered to help us. I think they will not take this seriously though?! Any thoughts? Also if a F&F is accepted how soon after could we sell our house? We are looking at relocating next year and desperately need the house equity to do this.
Sara (Debt Camel) says
There is always a bit of a random element in these F&F offers but I think a low offer like £3500 isn’t likely to be considered unless there is some reason why you can’t make the £468 a month payments.
Really after a F&F is accepted (and this can take a month or two as a variation meeting has to be called) there is no reason why your IVA firm shouldn’t close your IVA within a couple of months – at that point the IVA firm will send the RX4 form to the Land Registry to remove the restriction.
Martyn says
Hi. Some interesting reading here. I am currently entering an IVA. my debts stand at £16.5k and I will be paying £90 a month when it’s all setup. I lost my father 2 months ago and I will be receiving a large amount of money from his pensions. If I pay off my IVA within the first few months, will it be the equivalent of 60 monthly payments at £90 or will it be the full debt of 16.5k?
Any help will be much appreciated.
Sara (Debt Camel) says
It will be the full debt of 16.5k plus the IVA fees plus possibly 8% statutory interest on your debts (though if that is just a few months it won’t be large).
If you haven’t started this IVA I suggest that you should stop now! Instead consider debt management for a while until you receive this money. At that point you may be able to get full and final settlement offers for the debts that will save you money. You will definitely save the IVA fees. And perhaps most importantly you won’t have the IVA insolvency marker on your credit file for 6 years!
Martyn says
Thanks for the reply. Is it not possible for me to go straight to my creditors for settlement figures and skip the iva firm?
Thanks
Sara (Debt Camel) says
Not if you have already started the IVA – that’s why it’s important you don’t sign up to this.
Martyn says
I assume it doesnt start til I physically sign something? As upto now I havent signed anything, to be honest I haven’t had any confirmation about anything so I may be safe
Sara (Debt Camel) says
Phone the IVA firm up today and also send them an email saying you do not wish to proceed.
Mrs W says
Hi my husband and I have split up and have interlocking IVAs we are 41 months into it and have 31 months left, including the year for trying to remortgage, my mother and father in law have offered to pay full and final settlement of £8,000 do you think this would be accepted? We pay £226 a month, also my husband has lost his job?
Sara (Debt Camel) says
Given the circumstances I would hope you could get 31 x £226 accepted as a final settlement, which would be about £7,000.
Deborah says
Hi I am 28 months into 72 month IVA. I Pay 90.00 month and owe £4,050 as had 2 payments added on the end due to low income problems. I lost my job last month and have been paid up to 15/9 inclusive.
I have not told IVA yet I have lost my job, as I am so stressed trying to find job quickly and worried to tell them I have no job at minute.
As I have 50k equity in property, can they take house now?
My boyfriend has offered to clear the IVA for me and looking to offer £3,600 to do so.
Please tell me if 3,600 is realistic or would you advise more? How quick can it normally be to be paid off if he offered money now and it all be finalised?
Do they release you in every way so nothing tied to house in future etc? I can’t sleep worrying over everything and the fact I not told them yet? Wish I had never gone on it.
Debbie
Sara (Debt Camel) says
Hi Debbie, you do need to talk to your IVA firm asap. The normal thing if you have lost your job is a 6 month payment break to let you have a chance to get a new job. But tell them about your boyfriend’s offer and see what they say.
Lee says
Hi there. I have 18 months left in my IVA and pay £256 per month. I am soon to move in with my partner with my children but due to his income I will not receive family tax credit any longer and I will also be paying a lot more in fuel to get to work everyday ( around £250 per month ) I will be contributing towards the mortgage and bills but my income is going to drop considerably. I have £4600 of payments left . I am going to contact them and see if I can reduce my payments or I may ask a family member to help me settle early. I think I could only get £2500 though. Is it unlikely that they would accept this?
Many thanks in advance for any advice
Sara (Debt Camel) says
Hi Lee, I think you need to talk to your IVA firm about what you could afford looking at all the changes to your income and expenses. If that shows you can’t afford anything, then you need to offer this full and final settlement. Creditors reactions can be hard to predict, but the offer is more likely to be accepted with the details of why you cannot carry on.
christopher says
Hi, I’m currently 46 months into a 60 month IVA
Through credit fix. I have 2300 left to pay and have been contacted by a loan company associated with credit fix, offering me a loan over 18 months to pay off my iva. Is this a good idea? it’ll stop me from having to remortgage and any extensions to my iva. But I’m not sure of the likelihood of them making me remortgage when I have around £10000 equity in my house.
Also would the fact I’m taking a loan and meeting the payment improve my credit rating?
Thank you for any advice.
Sara (Debt Camel) says
Hi Christopher,
I’ve written a separate article about these unsecured loans Creditfix is promoting: https://debtcamel.co.uk/perinta-loans-end-iva-early/. I think you should read that and the comments below the article.
If there is only 10k of equity in your house a remortgage probably won’t be needed, as you have to be left with at least 15% equity and the remortgage has to be for at least 5k, see https://debtcamel.co.uk/iva-equity-release/ for details.
christopher says
Thank you very much for the link and your advice. The article is a great help
Emma says
Hi there, my husband and I have 15 months left on our IVA which includes the 12 month extension.
There is also an additional 3 months at the end to pay off some overtime.
Sadly we have just applied for divorce.
We currently pay jointly £432 per month. 15×432 =6930
My dad is offering me the money to end this thing but he’s not a rich man. There is a high chance of our IVA failing while this divorce is going through as my ex husband will need to pay rent on a property of his own.
Do you think it would be likely that a full and final figure of £6000 would be accepted? Our provider is Payplan.
Thanks in advance X
Sara (Debt Camel) says
I’m sorry to hear this. I would hope that your creditors would accept 6k in your circumstances.
Emma says
Hi, i’m in an IVA which is nearing it’s completion. Once completed, if I decide to sell my house, would my creditors have any claim on the equity released? How long do I have to wait after receiving the completion certificate to sell? Thank you!
Sara (Debt Camel) says
Edited – I have now written an article which looks at this in detail: https://debtcamel.co.uk/end-of-iva/
Emma says
Great, thank you!
kathryn says
hi I Had a salary decrease one year ago and it has now been reinstated with back pay of £1650 will I have to give all the back pay to my iva or will I be able to keep some of this
Sara (Debt Camel) says
You need to talk to your IVA firm about this. If your IVA payments have been reduced because of the lower salary, then I expect you will have to repay this.
Claire says
We were told that as soon as our IVA was finished our credit score would be better than ever as it would wipe the slate clean, is this true?
Sara (Debt Camel) says
If your IVA finishes in less than 6 years, no, your credit record will be bad until after the 6 year point.
If your IVA finishes after 6 years it will disappear from your credit record immediately – but that will leave nothing on there, so it will take some time to get positive marks. But if you “clear up” your credit file afterwards (this explains how: https://debtcamel.co.uk/repair-credit-record-iva/) then it should be good within a year.
Jay says
Hi
I’m nearly 1 year into my IVA, my debts were approx. £12k, and at the moment I am paying £80 a month back for 6 years (based on what I could afford at the time due to being made homeless and having to live on my own). This will be reviewed at the end of this month, early November and my financial situation has changed slightly due to my partner moving in with me and bills now being shared. We’ve also recently found out we’re expecting a little one, due March 2017, and my finances will change again due to maternity leave and a decrease in incoming wages!
I have a few questions, how do I broach this with my IVA company? They will be sending in paperwork to go over current expenditure, etc, but what I put down now will not be the same when I go on Maternity leave at the start of 2017. Shall I broach this with them before the paperwork comes through?
My second question is that my partner and I now need to find a bigger property – we rent at the moment and are in a tiny 1 bed flat so need to move into a 2 bed. Today, we had an application rejected due to my IVA (which I had expected but hoped wouldn’t happen) and my partner is now looking to see if we could possibly offer a settlement fee (he would be looking into taking out a loan as a gift to me) so we can apply for a rental property without any issues. Would an ideal settlement figure be the remaining 5 years x £80? Also, even with settling the IVA early, if accepted, would it still affect credit when applying for a rental property? Would there still be issues?
I’m concerned about the future for our child and want to get something sorted asap!
Thank you.
Sara (Debt Camel) says
First congrats and having a new life with your new partner and a baby on the way – what a lot can change for the better in a year!
It is a big pity you didn’t go bankrupt or for a debt relief order a year ago. At this point it would be nearly over except for the credit file implications, but an IVA has exactly the same credit record problem as bankruptcy. I am also very surprised that your IVA has been set up for 6 years, not 5. What was the reason for this?
Yes, you should tell your IVA firm of the major change in your situation. It’s probably hard at the moment to be sure of figures before you move, but the chance of you being better off when you are in a larger place and on Maternity leave is probably very low! You will need to factor in things like child benefit and child tax credit though. If you play with a benefits calculator such as https://benefits-calculator.turn2us.org.uk/AboutYou you should get a feel for this though. Depending on how the figures come out, you may not be able to afford even £80 a month. Once you have some idea about your maternity pay, likely rent and likely benefits, if this all seems very tight I suggest you talk to National Debtline or Stepchange about whether you would be eligible for a DRO if your IVA fails.
If your partner pays off your IVA it still stays on your credit record for another 5 years though and your credit record will never get anywhere close to good. I don’t think this is a good idea if he has to borrow money to do this. Your IVA was meant to get you out of debt, not land your partner with a big debt.
James says
Hi Jay
What Sara says above is really good advice but, if I were you, because you are only 1 year into a 6 year IVA, I would look again at the options of the DRO or even going bankrupt – you might have paid enough into the IVA for the supervisor to petition if you stop making payments.
Look at the calculators available on how much you have to contribute if you go bankrupt. For a start this would be only for 3 years and it could be less than you are currently paying or even nil. From what you say, I doubt you have enough money to make income payments in a potential bankruptcy.
Regarding moving home – sort this out in your name at your current address. Any future properties – see whether your partner can apply in his name. Your credit record is screwed for quite some time whatever you do. In fact a long running iVA might be worse than a quick bankruptcy. If your partner has enough money to pay a settlement amount, then instead use that as an extra large deposit for a landlord or pay 6 months rent up front. Agents only use credit references cos they are lazy. Most landlords would prefer a large deposit or 6 months rent up front.
Hope this helps.
JN
Denis says
I was with clear debt, who have been taken over by another company, I moved into anew house beginning of this year and notified them of change of address, they have just sent me a form to fill in to let them know outgoings and income. Also they want payslips, bank statements the only worry I have is that when I took out the Iva I lost my mum and then last year I lost my dad and wasn’t thinking straight and received some inheritance which I didn’t submit details to the Iva company. My debt was 14,000 and have been paying 70.00 per month for two years 3 months if I wanted to clear what amount am I looking at to pay my Iva up.
Sara (Debt Camel) says
Most of your £70 payments has currently gone to the IVA fees, so very little debt will have been repaid. It may take most of 14k to repay the IVA in full.
Denis says
As I didn’t let them know that I received inheritance can that present a problem for me or do I just put in an offer and see. I am now with aperture and I did let them know that I had moved but it still took them up to now which is 8 months to contact me, I have not defaulted on any payments. Not telling them about the inheritance was just the place I was at and not thinking, and with having to sell my fathers property and move I was not thinking straight. Do I make an offer and see what they say.
Sara (Debt Camel) says
You can make an offer but you do need to tell them about the inheritance. So far you have broken the IVA rules by not notifying them, but it’s understandable given your circumstance, but now you are aware of the issue you must explain the full situation, it would be dishonest not to.
Jack says
I got inheritance 15k was into last year of 6 years I paid 90 a month , needed car home improvements , took 3 meetings paid 6 k to settle , because have own house had 12 months extra added on timing was wrong , but hard depends who your Iva is with step change were brilliant , debaters wanted 9 k but were outvoted and 6k accepted . Good luck
Kathy says
I asked for an early settlement value as my sister wanted to help me be debt free, I received the money and paid it to my IVA company, also sending in a letter from my sister stating it was a gift, and a letter from me to confirm details, they said it must go before the creditors and would take around 2 months.
In the meantime my husband passed away and I did not realise he had some money, but left it to me, enough to cover the funeral and wake, with a small amount left over.
Do I need to let my IVA company know this after I have already made the offer to settle early, and if I do, do they have the right to take all the money ?
The timing between all this happening was a matter of days.
In the meantime I am continuing my regular monthly payments and have paid the amount they mentioned to settle the IVA, all being well and it gets accepted by the creditors.
Sara (Debt Camel) says
First I need to say in case anyone else reads this that you should NOT have paid your sisters money to the IVA firm before they had confirmed that this would be acceptable as a full and final settlement.
If your husband didn’t leave much money, then paying for his funeral costs is the top priority for his estate. Next comes settling any debts that he had. Only after that is done will the remainder come to you and it is only this remainder that could be “at risk” from the IVA.
You do need to let the IVA form know about this. In the sad circumstances I hope they will feel it is reasonable to just continue with your settlement offer.
Lorraine says
Hello
My Son has been in his Iva for 4 years, the IVA Co have advised him he has paid in 3568.00 so far (took 6 month payment break when made redundant, and also has some arrears). They have also advised that the total to be paid in is 6379.00, a difference of approx 2811. They have given a finishing date of April 2018. He is worried that it might fail in its final year as he barely manages on low wages at present, and will have rent and travel costs increases in early 2017. We are now in a position to offer 2000 in full and final settlement, and are very keen to do this as he is showing signs of stress and anxiety, which is obviously a cause for concern, can you give any idea as to whether our offer may accepted, or whether we should offer more, ? Many thanks………
Sara (Debt Camel) says
Hi Lorraine, if there is some documentation saying how much his rent and travel costs will go up next year, then that is probably a very reasonable offer to put forward. you could write your son a letter saying this which he could show to the IVA firm.
An alternative approach would be for him to ask the IVA firm early next year if his payments can be reduced because of his change if circumstances. But I can understand why you are worried about him and would prefer to get this settled sooner.
Denise says
I have written to my Iva offering them a final payment to see if they except, just wondering if I was left my fathers property but couldn’t afford to stay in the property as it needed work to update and had a lot of damp, as I sold the property and received money back from selling is that still classed as inheritance. Thank you for your help.
Sara (Debt Camel) says
Yes this is an inheritance.
Gavin says
HI, I’m 24 months into an IVA and for the last few months (june-Dec) have been receiving an extra 2-300 pounds in overtime after the death of a colegue but this is due to end soon as they are eventually getting around to replacing him.
I’m currently sorting my paperwork for the yearly inspection and i know they’re going to ask me to increase my payments (ot has amounted to more than a 10%increase in earnings), the problem is i can’t afford to pay extra as i’ve had to pay 1500 over the course of the year on running repairs to a flat roof on our property (its still not fixed as we can’t afford the £5000 cost to fix the roof’s and have a new chimney built)and also have my first child on the way and all the extra expense that comes with this.
Will i have to pay extra, i was told when i entered the agreement that i could possibly lower my monthly repayments (£250p/m over 6 years, original debt was just under £21000), i’m happy enough to continue with the £250 a month payments as i don’t want them to add more time onto the IVA but don’t think i could afford my payments to increase.
Sara (Debt Camel) says
You do need to tell them asap and also about your extra expenses for the roof. Talk to them about the baby (congrats!) and the extra costs / lower income next year too.
Fiona says
Hi I am in an Iva for the past 3years never missed a payment £170 I would like to settle up early As I will get a bonus from work I called the Iva company and ask for a settlement figure and was told 12000 which is perfect but my bonus is 20000 would I have to declare the full amount?
Sara (Debt Camel) says
I’m not sure from what you have written if you have told them you are getting a bonus and that is where the money will be coming from? You do need to tell them this – and the full amount (well what it will be after tax). They may take the line that you gave to pay this money into your IVA anyway, so you can’t use it to settle the IVA.
Karen says
Hi, my husband and I have been in an IVA for over 4 years now and it will end this November. As we now have a Ltd co, and due to tax issues, HMRC are trying to wind us up. We cannot afford to pay this off in full, but as far as I believe they will not accept anything less. I am concerned that if they do wind us up and we are still in the IVA they could claim our house (which does not have much equity in it). I would like to end the IVA now (we would only owe approx 4,000) of which we could let them know this would be a one off gift from a relative (as mentioned on your information) so that if they did wind us up our assets might be them protected as we are a Ltd co? My husband is due pension payouts anytime, but we have been told he possibly may not get them due to a bankruptcy order 26 years ago and obviously the IVA would want anything else. I am very stressed and have a condition caused from a brain rumour which was removed leaving my body unable to cope with stressful conditions and just wish this could be over with. Any advice would be helpful as we don’t know where to turn / thanks
Sara (Debt Camel) says
I am sorry to hear about your health problems but there isn’t much I can say. You need to talk to your IVA firm about your situiation and this tax debt.
Joanne says
Hi
I just need abit of advise please me and my partner have an Iva currently 2 years 3 months into 5 year with 12mth extension due too owning a house with a mortgage. My question is we really need too move house if I can borrow the money from a family member too pay Iva off can we sell our house and get a mortgage for a new one. We currently pay 250 a month we have approx 40k equity in house but would need this has deposit and partner needs a new van for work his old one is costing a fortune in repairs but without it can’t work. From memory I believe our debt was around 45k. How much would I need too borrow too get IVA paid and clear so we can move I can’t wait another 4 years too move house is too small and need too be closer too school for children.
Or my other possibility was too borrow the money from my parents too purchase a new house and van and use all the equity too clear IVA would this be allowed
Many Thanks
Sara (Debt Camel) says
To settle your IVA you would probably need to offer £250 times the number of remaining months – that sounds like 72-27=45 so £11,250. This would need to be proposed to your creditors as a variation. If they accept (and I would hope they would) then your IVA is completed and you can then sell the house.
BUT you will find it very hard to get another mortgage as your IVA will stay on your credit records for the rest of the 6 years. You may need to rent not buy.
Another option would be you carrying on with the IVA but renting a larger house and renting your current house out?
Did you realise when you started the IVA that you would need to move?
Joanne says
I always knew at some point we would have move but thought we could last the 5/6 years but it’s just impossible house is so small kids getting bigger and not in great area for any good schools didn’t really think it through before started IVa
Would it be possible too borrow money from parents too buy a new house (my parents can afford this) then settle IVa when will sell this house. Therefore could move and wouldn’t need a mortgage
Thanks
Sara (Debt Camel) says
OK, well back to my original reply then. If your parents could offer £11,250 to pay off your IVA, when this is accepted (which I would hope it would be) your IVA will end , then you can sell your house. This leaves you with the equity from the house which you could then use to buy a house with your parents putting up the rest of the money so you don’t need a mortgage. In a few years time when the mortgage has disappeared from your credit record, you could then get a mortgage to buy out your parents share.
This would be a HUGE financial commitment for your parents. They need to be very sure they can afford it and they should consider taking some financial advice on this.
Joanne says
Thank you for your help I will make sure they have the right advice before proceeding
Jay says
Hi
I have finished my 5 year iva but am currently paying 200 a month in additional monies .
I lost my job 2 months ago and altho seeking employment im struggling. I have only 7 months left to complete it (1350 remaining.)
im just looking for advice.
If i tell my debt company im unemployed will they say’ just look harder for a job or the whole iva fails ‘?
And on the slim chance i could get papa bear to offer a final settlement what would the minimun offer i could make as my dads disabled and retired.? Or would i be better to ask them just to finish the iva as i now cant afford it ?
Thnx Jay
Sara (Debt Camel) says
What are the additional monies you are paying? Have you previously had a payment break?
Jay says
I was paying 200 a month for 5 years , ive had a few payment breaks i accumulatedabout 2000 in commission to pay vack and am down to 7 months left, i have had a few odd months payment break but i had a letter saying the 5 year review had finished but just have to pay whats left.
Any advice?
Sara (Debt Camel) says
Well the normal thing is to give you a 6 month payment break to try to get another job. But if you have already had several, this may need to be approved by your creditors. How likely are you to be able to find another job? You could suggest a payment break to be followed by them agreeing your IVA is completed if you haven’t found work by the end of it? It doesn’t seem fair to ask your dad if he’s not well off.
Maria says
I have a friend that was previously in DMP for 6 years; repaid 23k has entered into an joint IVA July 2016; has a joint mortgage. Her partner a alcoholic and is abusive and she wishes to leave him i.e. divorce however feels trapped by the IVA now; she is the bread winner and paying the monthly instalment, can you suggest an way forward or advice as to what would happen if divorce proceedings were commence – obviously the house would be put up for sale?
Thx
Sara (Debt Camel) says
How much equity is there in the house?
maria says
when valued by the IP was informed that the property was worth £162k however when had advice from a estate agent was told to ask for £123k house was bought for £162k; houses on the estate have been going for £120K.
She has tried to sell on the past.
She feels that she cannot go on in the relationship for much longer, is feeling quite desparate
Sara (Debt Camel) says
How large is her mortgage?