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
Elsie says
Hi
I have just had a final settlement amount accepted and I have paid it. I’m with credit fix and they have told me that that is it and they will now pay my creditors but that was customer services and I know it goes to another team. Am I know able to obtain small amounts of credit without asking?
I have also done a lot of overtime since my last review and I didn’t tell them. Is this going come come back and bite me at some point?
Sara (Debt Camel) says
Am I know able to obtain small amounts of credit without asking?
I suggest you wait until you have your completion certificate.
I have also done a lot of overtime since my last review and I didn’t tell them. Is this going come come back and bite me at some point?
There is normally a final review before an IVA is completed so this may come to light at that point…
Are you a “key worker” as defined on this government list: https://www.gov.uk/government/publications/coronavirus-covid-19-maintaining-educational-provision/guidance-for-schools-colleges-and-local-authorities-on-maintaining-educational-provision
Elsie says
They emailed me this I am pleased to confirm that we have well received the sum of £3,000 which you have kindly transferred as full and final offer to close your case.
I have passed your case to our closures department who will now organise for your closures paperwork to reach you by post within 2 months’ time.
Congratulations to you! You are now debt free and I wish you well for the future.
So to me that suggests my IVA is over and they will pay my creditors. Just hope I don’t have to do a final review.
Sara (Debt Camel) says
The closures department may want to do a final review…
andy says
hello,
i have 37 months left of paying £300 per month on a IVA (11,100), my family has offered to pay a full and final payment as we have found out we have a baby on the way. what would you suggest i should make as a offer?
Also shall i tell creditfix i have a baby on the way? i don’t want them to say i can pay less but extend my IVA.
Sara (Debt Camel) says
How much would you have to reduce the payments to make them affordable?
Andy says
I probably wouldn’t have to reduce it by much but every little helps.
It’s more of what to offer for f and f to see it done with
Sara (Debt Camel) says
yes but the amount to offer for the F&F depends on what you would have to reduce the payments to if it’s not approved.
Your creditors don’t have to choose between this offer and you carrying on with the usual payments. The real choice is between the oF&F offer and what your payments would have to drop to.
But if you wouldn’t have to drop the payments much then you have to offer most of the remaining £11,100 to get it accepted. I suppose you could try 10k.
Hassan says
Hi,
I offered 5000 lump sum for £7000 on medical ground. My ip asked me to send A proper email or letter , last month wage slip And email from my friend who wants to pay money for me.
I did it and I was told that my request is forwarded to variation team who will arrange a meeting with creditors. Neither I was given any further advice nor to produce more documents. They even did not say if my offer is reasonable or I should increase it etc . Do you think it’s that simple?
Sara (Debt Camel) says
Different IVA firms have different procedures – I hope yours is accepted.
Hassan says
But it is still to the creditors to accept it or not ?
Sara (Debt Camel) says
yes.
Reece says
Hello, I am currently just starting year 5 annual review. I agreed to pay 40k and have 9700 left. I really want out of tge iva and gave the opportunity of being gifted money to get out of it. I mortgaged a new property in 2016 a few months before the iva began with 20% help to buy scheme. 1. Can I exit iva offering the £9700 without considering the potential equity, 2 will the help to buy make a difference if the equity is more than 5k? I start to pay this back at 1.75% for 57k in June 2021. 3. If my equity is over 5k then how much in total would a reasonable offer be? My monthly payments are £660.
Sara (Debt Camel) says
I am currently just starting year 5 annual review. I agreed to pay 40k and have 9700 left.
Your IVA is for 5 years? Are you at the 4 year point or at the end of the 5 years?
how much have you been paying a month?
If the 9700 you refer to the total of your remaining payments?
how much equity do you think there is?
Reece says
I am starting year 5 with an equity clause at the end of Yr 5.i pay 660 per month.9700 is what is left to pay on the iva but this doesn’t include dditional 12 months as the equity in my property is approx 40k.
Sara (Debt Camel) says
40K, is this your equity or does it include the governments share? What % equity is this?
Emma says
I wanted to leave a comment about my full experience of the full and final offer. I was 3 years in to my IVA and year 2 I did a lot of overtime so they added £2000 to my Iva and a further 2 years of payments. I wanted to settle the Iva so I offered £3200 (I would have paid £6000 in total should I have let it run its course) i contacted credit fix and within 24 hours they had advised a variations meeting was set up for exactly a months time. This was done and the creditors agreed to accept it. The same day I paid the money over the phone. I have been worried as I’ve been told I’m likely to have a final review as it’s been 8 months since my last review to check for payments this year. I was also told it would take up to 6 months to get my completion certificate. Yesterday I received the certificate of completion and no final review was done and my Iva is over and done with and I couldn’t be happier. So I’m total the whole process from when I advised I wanted settle only took 6 weeks.
Sara (Debt Camel) says
did a lot of overtime so they added £2000 to my Iva and a further 2 years of payments.
how could they add a further 2 years of payments????
Emma says
I have no idea but they did which is why I wanted out.
Sara (Debt Camel) says
wow. Creditfix are very difficult sometimes but I haven’t heard of that one before
C MIANT says
Emma
how long did you wait for?
Ben says
Hi Emma, I am at the stage of my iva where my full and final offer has just been accepted. I havnt seen that I will have a final review and I hope I don’t. I just want my certificate so it can all be over! Did you get a third party to pay or did you pay it yourself?
Ben
Hassan says
Hi Ben
Could you tell how long it took from ur offer to final acceptance. What was the total amount n how much you offered ?
Ben says
Hi hassan, it took just over 4 weeks from the day I put the offer in, I offered a little over what I had left to pay, as I really wanted them to say yes.
Just can’t wait for the certificate to come through my door
Hassan says
Lucky you. I offered to pay lump sum in first week of November n creditors meeting is fixed in last week of January . I was told that once creditors are informed they need 5 weeks
Jason says
Are you a home owner Hassan? Since I am home owner and I am with credit fix. When I inquired about the offer they asked Mortgage Redemption Statement to calculate equity level in my property so they can calculate the accurate offer amount.
Any advise?
rachael says
hi need some help my husband is 70 next year im 53 and we took out an iva over a year ago my husband has faling health problem heart failure can we get out of this iva we had £ 15,000 debt we pay just a £100 a month
Sara (Debt Camel) says
are you buying or renting?
did your husband have health problems when the IVA started?
how large were your debts, how large were his and how many were joint?
James Baines says
Hi, my final payment is coming out in 2 days time which completes 5 years of payments… I still have a year left to wait till it leaves my credit record but this year is payment free… I have recently won a substantial amount of money which would cover my debt I started with 10 times over… this money is due to be paid into my bank account in about 2 weeks time… would I still need to declare this? Or do I not need to worry as my payments
will have already been satisfied?
Sara (Debt Camel) says
How did you “win” this money?
James Baines says
syndicate win… dont see why i would need to declare it when I have completed all my agreed payments so I would assume the IVA is settled?
Sara (Debt Camel) says
but the date of the win was before the last payment?
In that case I think there is no doubt that this windfall is payable into your IVA. You need to tell your IVA firm about it now.
It’s good it was so large as it sounds as though you will still be left with a significant amount after pay all the original debts in full plus the IVA firms fees plus (possibly) 8% per annum simple interest on the debts.
Lorraine says
Hi, I am 2 years into my Iva with creditfix, which was £5400. I have made payments so far worth £2500, as I changed employer so my payments were increased. My partner passed away last month and I was going to offer them a payment of £3000 which I have after closing his bank account. This is so that I don’t have to worry about another bill coming out as my income has dramatically decreased. Do you think they would accept this offer as a final payment or would I just have to pay this and continue monthly payments? Thank you
Lorraine says
I am also waiting to hear if I am entitled to a lump sum from the Bereavement Support Payment. If so, is this classed as a windfall? Thanks
Carole says
it’s a gift he gifted you this money before he died. Sara show some compassion We know you work for an iva company but seriously?! I would read above people being “gifted” the money as it’s from
Your late husband it’s not a windfall ..it’s a gift. Good luck ;)
Sara (Debt Camel) says
Me feeling very sorry for someone in this situation doesn’t change the legal situation that money inherited is not a “gift” and even if it was, a gift is a windfall that can also be claimed by the IVA company.
But as I said, she has a good case to argue that her IVA should be completed and I would hope the IVA firm will propose this to her creditors who will agree.
Me work for an IVA firm? LOL I spend most of my time here saying that IVA firms way too often often mis-sell IVAs which are good debt solutions for only a small number of people.
Sara (Debt Camel) says
I am so sorry to hear this, it must be such a difficult time for you with money worries on top of your own grief.
Is that £3000 left after covering the funeral costs? Funeral costs have the first right of payment from the money someone leaves. Did you partner also have debts?
If the funeral costs have been paid and you have inherited this money after paying his debts, then unfortunately it has to be paid into your IVA as it is classified as a windfall.
A lump sum from Bereavement Support Payment is also very likely to be claimed by your IVA firm.
But if you are can’t carry on making the IVA payments as you are now paying all the household costs, you need to talk to Creditfix about whether you IVA can be treated as being completed on the basis of the payments you have made to date. If you clearly can’t make any IVA payments I would hope that your creditors would agree.
I suggest you tell Creditfix about your situation straight away. If they don’t sound sympathetic and looking for ways to help you, then it would probably a good idea to contact your local Citizens Advice who can help you deal with Creditfix. Citizens Advice can also help you see if you are entitled to any benefits or other help.
Kat says
Hello, I have £30,000 of debt, split between 5 different creditors, one of them being a credit card company holding two of my accounts and these two contain half the entire debt.
I am a single Mum of 3 school children, work part time, no maintenance, no money, savings or property other than a £5000 car which is essential for getting to work and 2 different school runs. And no money in my budget, in fact it’s a minus, to put towards a regular IVA which you pay out monthly. I have finally decided that I have to deal with my debt problem. I’ve been taking advice from StepChange. I’m going to ask them for an IVA lump sum of £5000 to be offered as f&final settlement offer (the value of my car). Do you think that my creditors mostly credit card and two catalogue companies will agree to accept this very low offer? Otherwise I’m looking at bankruptcy. Thanks
Sara (Debt Camel) says
hi Kat,
if you need your car, how can you sell it to have the money for a F&F?
Can I ask if you are renting privately or council/housing association?
A lump sum IVA is possible, but the IVA firms fees have to come out of the money you are offering, so your creditors would not be getting a lot. Do StepChange think this would be accepted?
I am concerned that even if there is a solution to the car problem, you would be left with too little money to live on after an IVA. Do you expect this to change in the next few years? Have you looked at whether you are claiming all the benefits you might be able to get?
Can you say how old the debts are – have you been making the normal payments so far, if not, how long ago did you default on them?
Kat says
Thanks for your reply. The lump sum is being offered as a gift from my mum in order that I could keep my car, or alternatively she would buy it from me if this is how it is supposed to be agreed by creditors. I’m renting privately, I am considered adequately housed and have been refused to go on a social housing register because of this. I think StepChange think it’s a small possibility that it would be accepted as otherwise bankruptcy really tge best option for me. I’m nearly 48. My chances of having a better job are extremely minimal, I’m not ever going to be in a better financial position really, definitely not in the next few years.
I am receiving the correct benefits I believe. Housing benefit, council tax benefit, child benefit, working and child tax credits.
I don’t think any of the debts are more than 3 years old and I’ve defaulted twice on each. I wanted to try to deal with this problem now, I can’t live my life doing balance transfers. Its spiralling out of control. Thanks
Sara (Debt Camel) says
is £5000 the value of your car from Parkers?
KATHERINE says
Yes, from Parkers, although the valuation has decreased significantly £3535 to £4375, since I last checked, but it was the free valuation, not the more accurate one you have to pay for.
Sara (Debt Camel) says
So the car is now worth only £3535? Then that would be all your mum has to buy it for. That would give you the money for bankruptcy fees. No need to pay for an “accurate” valuation – the Official Receiver in bankruptcy isn’t going to mind.
That wouldn’t possibly give enough for a F&F IVA though. If Stepchange think 5k would be, then I suppose you could try. But really why not go for the simple option of bankruptcy which won’t cost your mum so much?
KATHERINE says
My Mum doesn’t want me to go bankrupt, she’s worried for me about the consequences it brings. As far as I’m concerned, I’ve got nothing to lose. It would be a relief. I am a little worried about what the OR(?) would make of my spending. The fact that I’ve bought bedroom furniture (on credit) very very recently etc.
Sara (Debt Camel) says
That is sweet of your mum, but really there is very little difference between bankruptcy and an IVA. Both have the same bad effect on your credit record for 6 years. Bankruptcy affects a few jobs, but the number is tiny and you would know if you would be affected.
StepChange would have told you if there would be big problems in bankruptcy. Read https://debtcamel.co.uk/bankruptcy-restriction-order-bro/ – as that says a lot more people are worried about going bankrupt than get a bankruptcy restriction order.
So to come back to your question – I don’t know if this IVA would be approved. If StepChange thing it may be and you want this, then why not try it. I suggest it is proposed that if your creditors agree, at that point you will sell your car and get the 5k from your mum. Then if your creditors say No, you can check again on the parkers price and sell it to her for that and go bankrupt.
martin says
i have just been told selling my car to fund F&F is known as a windfall and must be paid into the iva , any fund for settlement must come as a gift from family or friend , so make sure you sell your can and get paid into someone else account , then they can send u a gift payment .
hope that makes sense
Sara (Debt Camel) says
Katherine is in a quite different situation as she does not have an IVA at the moment, she is thinking about one.
What you are proposing if you are in an IVA is very likely to be in breach of your IVA rules… it is not a recommended course of action.
KAT says
Hello,
I am having the final draft written by Stepchange at the moment, for my IVA lump sum offer of £5000 gifted from my Mum. I’m not selling my Mum my car. I do need it everyday, school runs and work. I hope creditors won’t look at my lump sum offer and request that I sell my car too. I guess the lump sum of £5000 IS the f&f offer and they can’t ask for anything more.
Hasan says
Hi, my offer to pay lump sum in IVA will be considered by the creditors on 27 January. How long will they take to inform me about the outcome of the meeting?
Paul says
Hi
I went through Aperture, they informed me straight after the meeting. Good luck, its is brilliant to be back in control.
Hassan says
By the grace of God my offer to pay full n final lump sum money to my Iva been accepted. Such a relief . Am I right to assume that once I pay the money I don’t to worry about increasing income/ salary and I don’t have to declare anything to IP ?
Sara (Debt Camel) says
There will normally be a final review at the end of an IVA, even one settled with an agreed amount. Until your IVA is completed you should report extra salary as normal.
Kim Hall says
But if you offer a lump sum to complete your IVA… so that is settled and complete then it is closed and ended they then can’t ask for anything in the future even if you finish say 1yr or 3years early??
Sara (Debt Camel) says
Once your IVA is completed, that is it. No more payments can be asked for.
But Hassan had just had his F&F settlement agreed. He will still have a “closing review”. In maost cases this is easy, no problems, the IVA firm is just tidying up the loose end so it can do a final report to the creditors.
But suppose the final review finds some has earned and extra £500 a month on overtime for last 6 months. Or that they had received a windfall payments of several thousand pounds, for example if they inherited some money they hadn’t told the IVA firm about.
Here the IVA firm may well be saying – you should have told uas about this and should have paid more. As I said this is rare, but it is why a final review is done.
Emma says
Can you offer a final payment from your own savings? My husband has been doing lots of overtime and we can now pay the outstanding balance?
Sara (Debt Camel) says
Is the IVA yours or do you both have one?
Is your husband a key worker?
Jen says
Hi, I am new to IVA started in September on 5 year plan. I paid for flights in 2019 on a credit card which is on my IVA plan, how will this work as the flights are being refunded back to the card? Do I tell the IVA company or will the credit card people inform them?
Sara (Debt Camel) says
It will reduce the balance on the card. There is no need for you to tell your IVA firm.
Bernadette says
Hello,
Please really need your advice, My husband is on IVA hes only got 1 year and a half. Last year he was diagnosed with sleep apnoea and his health went down hill after.. he was off for more more thank a year because of chronic fatigue, His work finish him off due to ill health, and medical grounds. The company paid him lump sum and leiu of notice. Total of £18,000. Hes paying £115 every month towards IVa. He told Step change if he can settle his Iva with that money. Because he didnt think he can go back to work. Then he told them that he will make an offer of £7000 to his creditors to finish off my IVA.
They Step change replied:
This means that under Section 14 of the standard conditions of your individual voluntary arrangement (IVA), the full amount of £9,422.60 is due to your IVA.
As you’ve stated that you wish to make an offer from these funds to your creditors, I need your formal request to arrange a meeting of your creditors as previously discussed.
Please confirm you wish to request a meeting of your creditors to agree to settle the IVA with an offer of £7,000.00 as previously requested in your letter from 21 January 2021.
We are still waiting for the reply, but i dont know if the creditors will accept it? And whats going to happen if they dont?? How long to wait? February 4th 2021 we send our offer to Stepchange to meet with the creditors.
Please need your advice! We dont know what is going to be the outcome! Thank you and regards!!!
Ben says
Hey bernadette, my full and final settlement offer took around 5 weeks to process, I did have to chase them up to see where they were. Then my settlement offer got accepted and it then took a further 6 weeks to get my certificate through the post. I really hope you get your offer accepted and hope your partner is OK
Weatherman says
Hi Bernadette
As well as Ben’s comment – there is no guarantee that creditors will accept it but hopefully they will given his situation. Make sure Stepchange know about the whole situation, including if your husband is unlikely to be able to go back to work. If you can, you should provide any evidence to support this, such as a letter from your GP.
You should speak to Stepchange about what happens if the creditors don’t accept the offer. Most lump sums received while you’re in an IVA have to be paid into the IVA. But there are exceptions. You can usually keep six times your monthly take-home pay if you receive a redundancy payout. Anything above that is likely to need to be paid into the IVA.
If that extra amount would repay all the debts in the IVA (the full amount, not just the amount he’d have paid if he’d made the full payments) plus the IVA fees, the IVA will be completed. Anything left over from the redundancy payment will be yours.
If it doesn’t, and your husband can’t keep making the payments, you should tell Stepchange. The IVA might ‘fail’. This would mean he still owes the debts, so you’ll need to get debt advice – either from Stepchange, or from another organisation like National Debtline – on his options from that point. You can call National Debtline on 0808 808 4000
Good luck to you and your husband – I really hope you find a solution that works for you.
Nic says
Hi, my partner and I took out an Iva last year as we felt it was the only thing we could do to get control of our debts. My debt was around 6500 and his was 11500. We weren’t told at the initial meeting that overtime etc would be taken. Out advisor said he’d been through an Iva and was the best thing he’d ever done and that any money we have left after our payments is ours and we can start to live a life again. We are now coming up for our year review and have only found out about giving over half of overtime. So now we are sure we’ll have a lump sum to pay to them. We feel like we are being suffocated by this Iva and after speaking to his mum she said she would gift the money to cover his Iva. When I asked an advisor she wouldn’t disclose the fees we needed to cover and said our offer would likely be rejected anyway. So I know how much we owe to creditors but not how much they would accept as a final settlement as they won’t divulge the fees. How do we get around this? His mum is wealthy and said she would give us 15000/20000. Sorry for long rant.
Sara (Debt Camel) says
how large are your monthly payments at the moment?
are either of you classified as key workers?
Nic says
My monthly payment is 80 and his is 120. Yeah he is a key worker. Had worked through the pandemic
Sara (Debt Camel) says
ok so if you are coming up to your annual review, you have to get through this now.
As your partner is a key worker, his overtime should not be taken into account under the special covid rules. Point that out to your IVA firm.
Once that is all done. you will have a new monthly payment each set. At that point you can consider your mum making a settlement offer. this doesnt have to be all your debts plus fees – it could just be all the rest of the payments in the next 4 years.
Ben says
I commented on this post quite a few months ago about my situation, I thought I’d update. In December I offered a full and and settlement before I got made redundant so my redundancy didn’t go into the iva as a windfall. I had some advice from Sarah on this page to get the offer in quickly, firstly I’d like to thank Sarah, thankyou so much for you help and advice. I had my offer accepted and after about 6-8 weeks I have my certificate in my hand and am completely debt free!! It is such a great feeling.
Thank you Sarah and Good luck to everyone who is putting an offer in
Ben
X
Mark says
I’m also with Creditfix and in my final year. After my last review they have added on £3724 due to overtime and extended it for 2 more years also. Since my review I have been getting compensation cheques from 1 of my creditors from their collections department. I’m now thinking of offering them a £2000 settlement figure which will be a gift from a family member just to get rid of it.
Sara (Debt Camel) says
overtime – were you a key worker?
how large were these compensation cheques?
Mark says
Yes I am a key worker as I work on the railway. I got a cheque for £25 and then another one for £50.
Sara (Debt Camel) says
In that case you should not have to pay in any of the overtime you have worked since the pandemic because of new covid IVA rules
I suggest you contact Creditfix and point this out.
As you are in your final year, it is almost always simpler to just let the IVA complete if you are able to afford the monthly payments – are you? What would the monthly payments add up to?
Mark says
Thank you for your reply.
My payments at the moment are £94. I have £846 left to pay for this year as my 1st payment was Dec 2016. My review last year they would only be able to take overtime from Nov2019 to March2020? The extra they have added on for 2yrs will go up to £155 a month. Looks like I will be ringing them up to clarify any discrepancies they may of added on. But they also asked me in Jan to send in my Nov and Dec wageslips for any overtime occurred which I did. As you pointed out about the pandemic and not being able to touch my overdraft is this a mistake on their behalf?
Sara (Debt Camel) says
My review last year they would only be able to take overtime from Nov2019 to March2020?
Are you asking if that is right? I think it is.
As you pointed out about the pandemic and not being able to touch my overdraft is this a mistake on their behalf?
I think that was a typo (possibly an autocorrect) for overtime. Yes I think this is a mistake but they may not have been aware you were a key worker. Of course they could have asked…
samantha warburton says
Dear Mark
I am one of the Insolvency Practitioners at Creditfix. I’m sorry to hear that you are unhappy with the service your have received. I would like to review the circumstances of your case and ensure that your review has been completed in line with our policy. In line with the COVID-19: Individual Voluntary Arrangement (IVA) protocol guidance, we are not currently requesting additional income to be paid by those classed as critical workers. My email address is Samantha.warburton@creditfix.co.uk, please feel free to contact me so we can resolve any issues you have experienced.
Kind regards
Sam
Benji says
Hi All
Quick question ..
I have received confirmation that I will be entitled to some of my late fathers pension – as I am very early into an IVA can this money be ‘gifted’ to a member of my family rather than me accepting it into my bank account – thus being swallowed up my creditors ?
many thanks
Weatherman says
Hi Benji
Unfortunately this will need to go into your IVA – your gifting idea would mean your IVA failed, and you still owed the debts. There’s also a good chance the IVA firm would then decide to make you bankrupt.
Sara (Debt Camel) says
Pensions and inheritance can be complicated.
Is this a lot of money?
Laura says
I have 2 years left on my IVA remaining payments would be £3750. I took a full time job last year but then my maintenance and tax credits payments stopped so i am now earning less than i originally did when i took out my IVA. My nan has kindly offered me money to pay the lump sum to help relieve me of the stress and enable me to provide a better life for my boys without me feeling like ive ruined their life by getting into debt when i was with their father and being left with it on my own. Do i need to offer more than what i have remaining to pay? and does my nan have to specify the reasons she is gifting me the money or is this irrelevant? many thanks.
Sara (Debt Camel) says
have you had an annual review recently, or is this coming up?
are you buying or renting?
Laura says
My annual review has just gone in as they said I had to do that before I make an offer. It was due in march anyway. I am on negative spare income as I have lost tax credits and maintenance. I rent (social housing)
Sara (Debt Camel) says
So have they reduced your payments? It is good to get this sorted out before you make an offer.
Laura says
I only submitted it yesterday. I was in negative spare income last year as well and they didnt reduce then I just presumed I have to cut costs elsewhere to manage the payments. Thatd what I have done but my family can see the impact that’s having on us as a family
Sara (Debt Camel) says
You need to wait until they have come back to you.
they cannot suggest you just cut some more. They should not have done that last year.
If you can’t afford anything, you could talk to your IVA firm about whether your IVA can be closed on the basis of the payments you have made to date. So no need to offer more.
Or in this situation you could be thinking of offering less than what your remaining payments would have been eg £2000 say?
Laura says
So I should wait until the review is completed before making an offer? To be honest I just wanted to get it over with that’s why I was going to offer the full remaining payments as I didnt want to add more risk of it being refused.
Sara (Debt Camel) says
Well it’s up to you. It seems like a lot of money to me to not wait a few more weeks to get clear. But if you want to offer the full amount at the moment I would be surprised if it isn’t accepted!
Laura says
They have advised my annual review process can take 6 weeks
Sara (Debt Camel) says
Then phone them after two weeks and ask what is happening as the figures show you cannot make the payments.
Laura says
Ok thank you
Ollie says
Hi, my Iva has over 3 years left and I want to offer them a sum to pay it off early gifted from a family member. I pay £116.50 a month and based in another 50 payments I’m due to pay £5,825. My question is do I just straight up offer the £5,825? Or do I offer more/less?
Thanks :)
Sara (Debt Camel) says
Are you finding it hard to make the payments? Do you expect things will get harder or easier in the next year?
Ollie says
Hi Sara,
I’m expecting things to remain the same for the next year or two. There’s nothing upcoming that would change my situation. At the moment I’m finding it ok to make the payments.
Thank you
Sara (Debt Camel) says
I see no need to offer more than the remaining payments. You can offer a bit less than the full amount – after all you are taking all the risk out of the IVA for the lenders. It is possible they may accept £5000.
Or you could wait to your 2 years review. many IVA firms would want to do a review anyway before putting forward an offer. And most people’s council tax will be going up in April. If yours goes up say £30 a month then your IVA payments should be redunced by that (if everything else is the same) – that would save a £1000 of the total cost of the IVA going forward.
Oliver says
Thank you that’s a good idea. Thanks for the help, I think I’ll wait for the review.
Ian says
I am 3 months into a 5 year IVA, we have the 12 months extension clause if a re-mortgage isn’t possible. The original debt was for 52k but on the IVA the creditors voted to accept 15.5k over the 5 years. Since starting the IVA I have had considerable pay rises and now my payments are around 850 per month and will be for the remaining 9 months of year 5. My question is this. If my total payments over the 5 years exceed the agreed 15.5k does the 12 month extension still apply and can I still be forced to re-mortgage my property as a full and final payment.
Weatherman says
Hi Ian
The simple answer here is yes, unfortunately. They voted to accept the £15.5k payment on the basis of your income at the time – so if you can repay more than £15.5k, but less than the £52k total debt (after fees…) from your income, they can force you to re-mortgage to clear the remaining amoutn (or make a further 12 months’ payments if you can’t).
Ian says
Hi Weatherman
What if the valuation comes back with less than the stated equity. So for instance the equity per person on the IVA is set at £5000 gross but the valuation comes back at £4500 per person gross. Does the 12 month extension still apply or is that then void due to insufficient equity release.
Tom says
Hi Guys,
Just want to confirm a few things as I am in a position to make a full and final offer and pay off the remainder of my IVA.
First thing is I have been advised by CREDITFIX that an offer can be made of £17,000+ to cover all my original debts and the fees without contacting the creditors but from what I have read I dont have to offer that amount and I dont have that amount either.
They have given me a 2nd option of offering something lower which they will present to the creditors during a virtual meeting.
The total amount I have left to pay is £3485 which works out to be £85X41 months. Would £4000 be a suitable offer to make in this case to finally finish this IVA as I have an upcoming career change and business plans which would suit having this IVA completed.
This money is a gift from a relative which will only be gifted to me upon acceptance of the offer and is not an inheritance or work related bonus.
From what I have read a lot of you guys have had offers accepted by offering the amount left to pay in your agreement.
Any help will be appricated.
Tom
Sara (Debt Camel) says
the 41 months – is that the time left on your IVA? Do you have a house with equity, in which case another 12 months could be added?
tom says
Hey Sara,
Yes that is the remaining months left in the IVA and no I am private renting.
Regards
Tom
Sara (Debt Camel) says
Then that may be a reasonable offer. I don’t know what checks Creditfix make before deciding if it is reasonable.
tom says
Thanks Sara.
So by offering the amount that is left or due to pay for the duration of the IVA is considered a good offer?
Sara (Debt Camel) says
Well it isn’t a poor offer. But creditors can be irrational in what they decide to accept.
tom says
Even though if i offer them £4000 thats actually more than what they would get from me in the long term, it poses less of a risk to them as well.
Tom
tom says
So by offering them more than what they would get from me long term (£4000) posing less risk your saying that its only “not a poor offer”? I would say thats a great offer as its more than they would get over the next 3.5 years.
Would you say they are likely to accept?
Sara (Debt Camel) says
There is simply no point in me guessing!
Sara (Debt Camel) says
it isn’t me you have to convince! I am just saying that your offer is not a poor one but sometimes creditors take odd decisions.
tom says
I know I fully understand the situation but in your personal and professional opinion is the offer I am going to put on the table one they would favour, from past stories and people you have spoken to on this blog is it one that seems to get success?
Tom
Sara (Debt Camel) says
I don’t know how many times I can say this. This is not a subject that I am prepared to make guesses about.
Daniel says
Not sure how many times Sara has to say it but creditors can do crazy things. I offered an amount which initially got rejected, it was more than what I would’ve paid if I kept with the monthly payments. I tried again a few months later with a smaller amount and they accepted it. No one knows until the offer is on the table which way it is going to go. Yea it’s favourable if you offer more than the settlement figure but you never know.
tom says
Thats all I needed to know. Just a generalisation that my offer is along the right lines and I am not way off.
Thanks
Tom
Pegasus says
Just wondering if compensation from criminal injuries compensation is classed as a windfall? ( From what I’ve googled it isn’t classed as a windfall and there’s no law to say what is defined as one) Also if it is not can I offer to pay what’s owed on my IVA? I’ve already paid £2768 of 8800, was a 5 year IVA but had to be extended as a debt came up later and was added on. ( Now have 58 months left) Total debt 26000 ( combined of myself and husband) do I just offer the remainder of what’s left to pay ? The compensation doesn’t cover total debt at all.
Sara (Debt Camel) says
I don’t know for certain. but compensation from the Criminal Injuries Compensation Scheme cannot be claimed by the Official receiver if you had gone bankrupt, so I would hope it cannot be claimed in an IVA as a windfall. You need to ask your IVA firm about this – come back if you get the wrong answer!
If it can’t be claimed by your IVA you can use the money for whatever you want – making an offer to settle the IVA is probably a good move unless you have mortgage/rent arrears or priority debts outside your IVA.
If you have no particular reason to argue you can’t afford the existing IVA payments, then an offer to pay the remaining payments is sensible.
Amy says
Hello I was wondering if someone could give me any advice, but of a strange situation!! So one of my creditors has written to me admitting irresponsible lending, they are the reason I ended up having to take out my IVA.
If I put in a claim with them, and receive a sum of money back. Can I use that to pay off the IVA early?? I am 3 years into my IVA. Thank you!
Sara (Debt Camel) says
is this Mr Lender? Provident? Amigo or who?
Ami says
Hi Sara,
It was a Barclays Credit Card I had, and they wrote to me I didn’t know anything about irresponsible lending.
Thank you
Anonymous says
I’ve just had the same so my iva will be reduced by around 7k. Wondering if this will just come off of the total of my IVA?
Sara (Debt Camel) says
It comes off the total debts in your IVA, but it won’t reduce what you have to pay unless you will be repaying your debts in full plus the IVA fees.
Ami says
Did you have your payments reduced at all?
Sara..so I’m guessing to put a claim in for irresponsible lending won’t benefit me at all really?!
Sara (Debt Camel) says
How large are the debts that went into your IVA? How large are your monthly payments?
Anonymous says
Yes ill be making an offer for my total debt and iva fees once the irresponsible lending debt has been reduced. I only won yesterday.. Just hoping they accept the offer x
Ami says
Ok, so my debts were a total of £19k, and my monthly payments are £160 a month and I am 3 years and one month into my IVA.
Thank you
DONNA says
Hi.
I’m looking to settle my Iva early because I am looking at a better job which would substantially increase my salary, and therefore my Iva payments would go up. I don’t want to change jobs just for the extra money to go on the Iva but not actually pay it off any sooner.
In addition I’m hoping to apply for a mortgage in about 3 years time. I realise the Iva remains on my credit file for 6 years, but if it has been settled for some time is that more favourable?
I’m 16 months into my Iva which is over 6 years. I pay £249 a month. Working out it seems I have just under £14000 to pay so I was thinking about offering 12-14 thousand? The money would be gifted to me by my mum for the purpose of settling the Iva, she won’t be giving it to me anyway.
Sara (Debt Camel) says
if it has been settled for some time is that more favourable?
No. It is highly unlikely you would get a mortgage except at a dreadful rate of interest from a bad credit lender with the IVA on your credit record.
I was thinking about offering 12-14 thousand?
That sounds reasonable – put it is never predictable if offers to settle IVAs will be agreed.
Stephanie says
Hi,
I’m 3 years into a 6 year IVA.
I have £4500 left to pay. I have been offered a lump sum purely to pay the IVA off by my grandparents – it’s a gift I suppose but I will only have it if they can pay it directly to my IVA.
Is this the type of offer that is usually accepted by creditors?
Thanks
Sara (Debt Camel) says
how much do your remaining IVA payments add up to?
is it proving difficult to make the IVA payments?
why is your IVA 6 years not 5?
Stephanie says
Hi,
My remaining IVA payments add up to £4500. The payments are still OK, but obviously I would prefer not to have the burden of the IVA and it does cause me stress., which is why my grandparents have offered to pay it off for me.
The IVA is 6 years because they wanted to make it a year longer, the final year will be when i have paid my car off so they want to include the amount I would be paying for my car. Payments will go up from £80 per month to £224. This was just what they offered me for some reason. I just accepted.
Sara (Debt Camel) says
Nice grandparents :)
I’m sorry I meant to ask not what your remaining IVA payments were (which you had already said) but how much you were proposing to offer. If this is £4500, then there is a good chance it would be accepted. Indeed £4000 might be. But these things are never guaranteed – some good offers are occasionally rejected and poor offers are accepted.
Stephanie says
Thanks for your answer. They have offered to pay what is left, I didn’t realise they accepted lower? Thanks, I will have a think about it what to do.
Nick says
I entered into an IVA for the value of £5400 payable at £90 for 60 months, I am 4 months in so I have £5040 remaining. My partner who doesn’t live with me is due a payment of 5k for some work they are about to take on, can they offer this as a gift to pay my balance in full? The agreement is with Forest King if that makes a difference. The original debt was just under 12k to 5 debtors.
Sara (Debt Camel) says
Yes you can make an offer to settle your IVA early with the money coming from your partner.
Offering the total of what you would pay is a reasonable offer.
But you need to be clear that this is an early settlement offer that needs to be approved by your creditors – it is not “paying your IVA “in full” that would involve repaying all your debts in full plus the IVA fess which will be £3500+
Two things to think about. Is the 5k your partner may get paid after tax? And your credit record will not improve until the 6 years is up, even if your IVA is settled early.
Luke says
Hello, I am looking for some advice
I have an IVA with Credit fix
Taken out in August 2019 Total debt £13544 IVA amount £4491 of that I’ve only paid £673
My account fell into arrears and they recently added it on to the end it’s now back in arrears, I’m self employed and my business has took a hit though the pandemic as it’s entertainment/party/events based
In 2019 when I first took out the IVA I have suffered badly with anxiety and depression at one point I wasn’t good at all I was on medication etc and obviously in that time I wasn’t working much therefore that’s why my IVA went into arrears it’s not Back in arrears as my income at the money is up down, my question is this, what can I do to make a offer to settle it and what would be an amount likely to be accepted
I have family who think Would help me if this meant getting rid of it as it’s stressing me out a lot
I don’t own a home I’m renting with my partner (housing association) she is not working as she’s has illnesses she received PIP and we get tax credits etc but obviously that money is to keep house running etc as have 4 children although it is all Included in the IVA income/expenditure
If I got rid of this just feel it would help me focus take pressure away try concentrate on rebuilding everything
Just don’t know where start really
Sara (Debt Camel) says
Can I suggest you talk to Business Debtline https://businessdebtline.org/ about your options? One possible option is to let your IVA fail as you have paid so little towards it and to look at a Debt Relief Order instead.
That money your family could help you with maybe much better used in helping you in other ways – perhaps providing you with a car you can drive or helping your business get back on its feet again.
Steve says
Hello,
A family member has offered a lump sum as a gift to me to end my IVA early, I am 3years into my agreement but CoVid has affected my work industry badly so I have had to find other work and mine and my partners health have been affected as we both caught CoVid and were hospitalised and have other failing health probs now with the stress of being under an IVA and CoVid hard hit times . What percentage of the remaining debt to creditors would you suggest to offer? Thank you
Sara (Debt Camel) says
I am sorry to hear this year has been so difficult for you and your partner.
Has your income now reduced because of your change of work? What have you been paying so far?
Rodger says
My son and his wife are 22 months into a 5 year IVA. She works full time and he, as a self employed painter has had very little work due to covid. However, they have managed (by the skin of their teeth and with the help of the government covid grants) to keep their heads above water. He has now received the last government grant of £4,750.00. Will this be classed as a windfall bearing in mind that they will need to live on this money until things get better. They have 38 months to go at £200 a month. £7,600.00. They want to get out of the IVA in order to make a start buying a house. They know it will be difficult for some time but if they can get an F&F accepted, at least it’ll be three years early. Do you think it would be wise of him to offer the £4,750 or will the creditors just take that and still insist he pays the £200.00 pm?
Sara (Debt Camel) says
I think his IVA should treat this as “income” not a windfall. But all self-employed IVAs are very “individual” so he needs to talk to his IVA firm about this.
But could he afford to offer this money as a F&F? Won’t that leave him with too little to live on? You dodn’t want to walk out of an IVA intio having to get more high cost credit just to live.
Even if he settles the IVA early, it will remain on his credit record for the rest of the 6 years and during this time he will have no chance of a mortgage except at a dreadful interest rate, and even then only if he has large deposit.
It a shame they ever started this IVA – with only £7600 of debt and able to pay £200 a month a debt management plan would have been a much better and more flexible option for him, without an insolvency marker on his credit record.
rodger says
Sorry, I should have explained it more fully. the Original debt was £35,000. The £7,600 is the amount he would pay at £200 a month over the 5 year period. We are aware of the problems he would face trying to get a mortgage during the 6 year period. We were just hoping to get a bit of a head start.
Sara (Debt Camel) says
My fault, I misread what you wrote which was perfectly clear.
A DMP would not have been a good option with that much debt – instead bankruptcy would have been better and this would have been nearly all over by now as payments can never be made for more than 3 years.
I would be surprised if they will accept £4750 as a F&F. He can try – but as I said, what would he live on if he does? Obviously if you can help him that would be different.
rodger says
Hello Sara
I’ve been discussing things with my son and we’ve decided I will help him by giving him £6,000 to pay his IVA. since my last post he has paid another instalment and the remaining payments add up to £7,400. He contacted his practitioner and they want various information about me, including proof of residence. The problem is, I live in Spain. I have applied to the Spanish authorities for permanent residency but it has not yet been Granted. I own a property in Spain but not in the UK so I don’t have a UK address. Should this be a problem?
Sara (Debt Camel) says
I am not sure why were you live is relevant? Nor how well off you are or whether you won a property.
Is the money you would offer sitting in a UK bank account? They may want to see evidence that the money is there.
rodger says
Yes I have the funds in the UK.
Sara (Debt Camel) says
Then I suggest your son replies with the details of where you live and says the money is in a UK bank account if the settlement offer is accepted by the creditors.
Bernadette says
Hello,
Here’s my latest IVA settlement email from step change!
Just a bit confused because they sent me an email today about my husbands final review. It just confuses me and my husband .. I thought we have settled it. And my husband no longer working anymore.
Please I need clarification, in this protocol?
Kind
Regards,
Bernadette
Sara (Debt Camel) says
did you mean to copy out part of the email from StepChange?
Bernadette says
Here’s the email from StepChange-
Here’s a copy of the Chair’s report for the virtual meeting of creditors held on 20 April 2021.
Creditors have agreed to the changes to your IVA.
This means they’ve agreed to accept your revised offer of £9,500.00 (due the modification requested by one of your creditors) as a full and final settlement of your IVA.
As I’ve already received these funds, no further action is required. Once these funds have been distributed I can then start the process of completing your IVA.
The completion process can take up to 3 months but generally takes approximately 6 – 8 weeks. I can confirm that no further action is required by you and this is to allow all the administration for your IVA to be completed.
Once this has been done, I’ll then issue you with a copy of my final report which will include your completion certificate. A copy of this report will also be sent to your creditors.
Your IVA will then be completed, and any outstanding debts will be written off.”
Berndadette says
Here’s the email today!
It’s time to complete your final IVA annual review
I’m getting in touch because it’s an important time in the progress of your individual voluntary arrangement (IVA). It’s time to complete your final review with me.
Because you’ve almost completed your arrangement, I don’t need to do a full review of your budget. I only need proof of your income. This is to check whether you’ve received any additional income that needs to be paid into your IVA.
What you need to do
Step 1: Provide proof of your income
Step 2: Return the review information to me by 25 May 2021.
Returning your review
There are two ways you can return your review information to me:
1. By email to ip@stepchange.org
2. By post to Annual Reviews, StepChange Voluntary
Sara (Debt Camel) says
it is normal to do a “completion review” even when your IVA has been settled with an offer approved by your creditors. I don’t think this is anything to worry about, but if you phone up StepChange they will be able to confirm this.
Melanie says
Hi,
My husband and i are about 9-10 months into an IVA for a combined debt of £32k. Our remaining payments are about £15.5k. We are thinking of plucking up the courage to ask my husband’s family to ‘gift’ us money to cover the IVA. So we aren’t certain they will say yes even though we are certain that the do have the funds in the bank. We weren’t aware that we are not supposed to save in our IVA. We have been putting away £400 per month by making huge efforts to scrimp and save from our budget. We were told initially that saving from our budget is encouraged and had planned to try and pay off the IVA early from savings. Well now we have discovered that this is BS.
The Motivation and timing for this is that I am suffering with health problems and we aren’t certain that I will be able to work in the short term. Also, if I do end up recovering then I may actually want to work full time in the next couple of years when our twins go to school which would dramatically increase our income and obviously we don’t want that to be eaten up by the IVA.
The issue is (apart from not knowing if family are willing to help!) Is that we are due a review in the next couple of months that might put our payments up or add more money onto our IVA. Can we apply for F&F before the review? Will they still do the review if F&F is accepted? If F&F is accepted and they carry out the review and say we owe more will that then be a separate issue? Will it nullify the F&F?
TIA
Sara (Debt Camel) says
Have your incomes gone up since the IVA was set up? because I can’t see how you can save £400 a month if your IVA payments are only £300 a month, even if you are a demon budgeter…
Are you buying or renting?
Do you own a car or have one on finance?
Melissa says
Our income has gone up slightly but I have changed where I shop and cook differently. We have three kids so our food allowance is high. Also have a differ t car that uses less diesel. We part own our house.
Sara (Debt Camel) says
ok, so the problem is if you make a F&F offer, your IVA firm will normally do a review before agreeing to put that forward and even if they don’t, they will do a closing review if your offer is accepted. And although you are allowed to save in an IVA, your IVA firm will have been expecting the amounts to be a lot less than £400 a month which suggests you could be paying a lot more to your creditors.
If you aren’t able to work in the short term, you will be able to use some of the money you have saved to pay a few months IVA payments. Then you can ask to have your payments reduced to a more affordable amount.
You might then be able to offer a lot less as a F&F in a years time if you are still unable to work?
Or if you can get back to work, then your IVA payments will just go up again. But there is no reason to scrimp dramatically to save.
If you don’t want your income to be swallowed up by the IVA, then you can stay part time until the IVA finishes.
I am sorry but taking out this IVA may not have been a good move for you but you now need to make the best of it.
Melissa says
Ok but if the IVA wasn’t a good move shouldn’t we try to get out of it rather than stay put?
Sara (Debt Camel) says
The damage is done now. It’s on your credit record for the next 5+ years whatever you do. Your creditors may well not accept a F&F as it looks as though you have been paying them less than you can afford. And anyway you would have to borrow this money from family…You may be OK if you offer a F&F but you must expect your IVA firm is going to look in detail at your offer and what has happened.
If you look on the bright side, if your income is going to drop, then your IVA payments should do as well. Your savings may let you carry on paying your IVA at a lower rate, just see how it goes. You don’t have to go full time.
LJ says
Hi Sarah,
I started my IVA in January 2018.
I currently pay £170 per month and was fine and comfortable paying this until I’ve become unemployed. Because of my disability, positions in which I can work are pretty much few and far between. I was lucky enough to have this job and now finding another that will be flexible in its hours to accommodate and also has adaptions plus then pay the same seems a far flung dream.
My parents who live abroad have suggested that I move to them and have offered to gift some money to pay the IVA off as a full and final. The problem is they are not rich and are pensioners themselves who I know struggle. They have had no idea about the amount of debt that I owed as I was embarrassed but have said they can gift me £1500 and get me my flights etc.
My current IVA total remaining is £3400. Obviously the £1500 is far less than the remaining balance, but with no income other than benefits I’m unsure what to do. I don’t want to ask my parents for more money as the gesture they have already made has been humbling.
The only other option is failing the IVA and going bankrupt but I really really don’t want that to happen as I feel I would be back to square one and wasted all the payments I’ve made thus far, plus my credit file would be back 3.5 years and have to wait another 6 for the adverse to come off
I’m hoping you can give any advice just what to do.
Thank you in advance
Sara (Debt Camel) says
Can you say how large the debts going into your IVA were?
Would you be happy going abroad or do you just want the IVA finished and to stay here and live on benefits?
Are you in receipt of disability benefits? Are you renting or buying?
LJ says
I had a total debt of around 68k
Over 80% of my creditors voted to accept it previously. And I had about 12 creditors which was mostly credit cards and loans and a car.
I was comfortable with payments before IVA but my health deteriorated detrimentally and made me give up my job and this my income dropped dramatically everything just snowballed.
I am happy to go abroad but do not want the noose hanging around my neck of a failed IVA or bankruptcy as if I return or even choose to stay it is just one less thing and bill to worry about. And at the moment that’s all I’m doing.
Yes I get disability benefits and am renting.
Sara (Debt Camel) says
So you had to give up a well paid job, then you got a new one which made allowances for your disability but the pay was less so you had to have the IVA. Now you are losing that job and you don’t think you will be able to find another one – is that accurate?
If it is, I think you should ask your IVA firm if your IVA can be “completed on the basis of the finds paid to date”. You are over half way through and because of your health it is unlikely you will be able to find another job. You can say if they do not agree you will probably go bankrupt and go to live abroad with your parents.
I don’t think in your situation your credit record really matters much, does it? Isn’t it better to save your parents the money and go bankrupt if the IVA can not be completed? bankruptcy isn’t a noose round your neck if you are abroad. And if you can’t work, well no-one is going to lende you much anyway.
LJ says
Yeah that pretty much sums it up.
With regards to the “completed on funds paid to date” what if they say to just go bankrupt, as what difference does it make to the IVA company/creditors?
With regards to my credit record, My worry is if it resets itself again back to another 6 years, then let’s say in 2 or 3 years time I choose to return to the uk (as I also have family here and am a UK citizen), when my Iva would have normally been completed so I could rent etc I would still be bankrupt and in able to rent due to landlords credit checks etc. I really had to fight and beg to stay where I am when they found out about the IVA and it just worries me a little. I know I can’t have my cake and eat it, and that’s why I was wanting to full and final.
It really is causing me so much stress!
Sara (Debt Camel) says
With regards to the “completed on funds paid to date” what if they say to just go bankrupt, as what difference does it make to the IVA company/creditors?
This is worth trying for as you are more than half way through. Given your health problems and the covid-19 situation, it is possible your creditors will agree. Your IVA firm may prefer to have your IVA done as “settled” not “failed”. It may not work though.
But it’s up to you if you just want to say you can’t go on and offer the full and final instead.
I don’t know how much that money means to your parents. Or the chance of you deciding to stay abroad for 6 or more years. These are difficult decisions to make, especially when you don’t know what your creditors might decide.
laura chapman says
Hi all,
I was hoping for a bit of advice. I am 3 years into a joint IVA with my husband. We have just had our 3rd annual review and our payments have been put up slightly. It works out over the next 2 years there is about 4500 left to pay.
We are a low income family, my husband isnt earning as much as he should due to covid etc. We get tax creds and housing benefits. I have a 3 and 5 year old so I’ve decided to retrain during this time. I’m going to Uni in Sept and I’ve just found out that I have been accepted for a grant of 3200. I spoke to my IVA today who said that basically I would have to do a new income/expenditure when I receive the money as this counts as income (but my outgoings would change too and that would be taken into account).
I’ve just read somewhere though that student loans aren’t included as income… is this true? Would it be worth asking for a 5k student loan and offering it to the IVA to escape early? If I did do this, could I then keep the grant?
Can someone shed some light on rules to do with student finance? I am happy to just have the grant and not take the loan if necessary. But if I can get out of the IVA early then I would of course love to do that too!
Sara (Debt Camel) says
We have just had our 3rd annual review and our payments have been put up slightly.
if your husband’s income has dropped because of covid-19, why are your IVA payments going up?
Laura Susan Chapman says
Because benefits have gone up, and we were gifted 1000 in the year
Sara (Debt Camel) says
have your expenses also gone up?
Laura Susan Chapman says
Not really. Although I expect them to once I begin uni
Sara (Debt Camel) says
So you have an option to apply for a student loan? But you think you can manage without it?
Do you know what your benefits situation will be in September if you do not apply for the loan? If you do?
I think you need to be sure what your finances will look like in September before you make any decisions about whether to take this loan and what to do about your IVA.
I suggest you talk to Citizens Advice who can help you look at the benefits situation and draw up a draft incoome & expenditure.
Laura Susan Chapman says
OK thanks Sara.
All I was really wondering is if it would be an option?
Does the student loan count as income or not? If we could manage it, would the iva company accept it as a pay off or not do you think?
Sara (Debt Camel) says
This will depend on the terms of your individual IVA. At a guess it would count as income but you cannot assume that is correct. Even if it is correct, you have an option about whether to take this loan, so you could potentially make an offer to the creditors on the basis that you take the loan because if it is not accepted you will not take the loan.
HOWEVER I repeat that you need to look at the implications for your benefits if you do and do not take the loan. Until you know this you can have no clear idea what your financial state will be and cannot decide whether the IVA would be affordable or whether an offer would be possible.
Chantel says
Hi, just passing and thought I’d remind you that regardless of weather you take the student loan or not, your benefits will still be deducted as if you have taken it. As they expect you to take anything available to you. Even if you decide against taking the student loan, your benefits will still be adjusted accordingly x
Sara (Debt Camel) says
I think that may well be right – which is why I think she needs advice on the benefit situation.
Grant says
I had an IVA but decided to cash in my pension to clear it. I rang the IVA company to tell them this. About a month later I received an e-mail from them stating that to clear the IVA I would have to pay £13000. I paid this. Three weeks passed and I received another e-mail and a phone call telling me that I owed another £10000 to clear the IVA as one of the creditors had not yet provided proof of debt and was left out of the original £13000. The debt to the creditor is £6250 but the IVA company want £10000 for costs and administration. Where do I stand with this, should I pay them the full £10000?
Sara (Debt Camel) says
oh dear. Did you take advice before deciding to do this? You could have made an offer to settle the IVA with a much lower amount, not pay the debts in full.
Had you cashed in the pension before the IVA firm told you would have to pay £13,000?
How long had your IVA been running?
Laura Chapman says
Oh right!
OK so I know the grant will count as income and will change the benefits, but surely the benefits can’t force me to take the loan if I don’t want to? I guess I’ll just have to phone the CAB. I think maybe I’ll just forget about trying to sort the IVA out this year… Only 2 years left I suppose..
Thanks for all the help!
Sara (Debt Camel) says
They can’t force you to take a loan but in some situations they will assume that you have…
Rob says
Hi, I’m looking for a bit of advice in regards to my IVA. I took it out 2 years ago when I was in a job which didn’t leave me with much disposable income and I was in a lot of debt from the cost of being a full-time student. I had credit cards and also a £11,000 (incl. interest) bank loan which my debts stack up at around £17,000. At the time my son was barely 1 and I wanted to write off as much debt as possible, be hindered for 5 years with this IVA on my head so I could come out the other side and have a clean slate. I’m in a position now where I’ve moved jobs and earn over double what I did in my previous job, however none of this I have declared to my IVA. I’m only 25 so I wanted to live a little as I’ve never been a position to do so, I know I shouldn’t of but I’m submitting my 2 year review now and I’m certain my IVA firm will pick up on my increased earnings. Is there a way I can either get out of this? I’m absolutely terrified of becoming bankrupt and essentially ruining the rest of my own and my young family’s life, as we’d love to one day be debt free and get on the property ladder. Please help!
Sara (Debt Camel) says
Obviously you have should have told the IVA firm.
At the annual review it sounds as though the amount you pay will go up from here on and you may also owe more money that you should have paid in the last year. Make sure any increased expenses are also taken into account.
You may be able to get your IVA extended to pay more months at the end.
If you didn’t have any assets to protect, then bankruptcy would probably have been a much better idea for you at the start. It is a myth that it is easier to get a mortgage after an IVA than after bankruptcy…
So if your IVA firm is being unreasonable and insisting you start paying more than you can afford, bankruptcy will not be the end of the world. But don’t panic about this – your IVA firm doesn’t want to make you bankrupt – it would much rather you paid more so it gets more fees.
Lee says
I’ve just currently finished my first year in an IVA. At the time I didn’t think my salary was going to increase. However, I am now looking at a potential promotion which will give me a substantial increase in salary.
A family member may be able to gift me enough to offer a final settlement payment but this won’t be for another 6 months, by which time I will already be in the new post.
I’m not really sure what to do. I also feel the IVA wasn’t the right choice for me, I was recovering from mental health difficulties at the time and I don’t think I really understood what this meant with regards to being insolvent. Can you help advise please?
Sara (Debt Camel) says
Do you have any assets such as a house with equity?
How large were your debts going into the IVA? How much are you paying a month?
Lee says
Only asset is my car. I went in with £14000 I think. I pay £170 at the moment but have paid over £3000 off in the first year due to overtime. I have also just learnt that I shouldn’t have paid some of this as it was overtime during Covid and I’m a key worker.
With the promotion my salary will make my expendable income over £1000. If I had stayed with the debt management plan this would not have been an issue as it would have meant I could just pay it off earlier. But am I right in understanding that if my salary increases and my free cash increases that will just increase my payments over the next four years?
Can I request to end the IVA and set up a debt management plan with my debtors? Is this also an option?
I have no problem paying what I owe, even though the issue was due to my mental health, it was still me that got me in the mess. But I really don’t want to be paying more than what I owe.
Sara (Debt Camel) says
how much is your car worth? Was it explained to you that your monthly payments would increase if your income went up?
Is there any chance of not taking the promotion now but in a years time?
Lee says
Car is worth about £3500. Unfortunately if I don’t take the opportunity with the promotion now it won’t be there for a very long time due to the circumstances surrounding why the post is becoming available.
I remember something very brief about if I earn more I will need to pay more but it’s a bit of a blur to be honest and at that point with my health I never expected to move upwards on the pay scale so I think I just went with what they were saying.
Sara (Debt Camel) says
If you stay in the IVA then most IVAs have a term which says you have to pay in 50% of extra income – you should check what yours says. If you are right that your net pay after tax is going up £1000 a month than you may well pay off more than your total debts plus IVA fees (large) plus (possibly) 8% interest) before the end of your IVA, at which point your IVA will be completed.
At that point you will have repaid much more than your total debts.
You can’t request to end an IVA and go back to making repayments to creditors direct. You could simply stop paying and then your IVA would be failed after a few months… but there may be a term in your IVA that means your IVA firm can choose to make you bankrupt – although this is rarely done.
I would be surprised if you can argue you were mis-sold an IVA. At the time it looked as though it would end your debts quicker than a DMP and you would have lost the car in bankruptcy. It wasn’t a stupid option at the time.
You can howver ask for the extra overtime payments you have made to be refunded to you – or be reducing future IVA payments.
On the bright side, your mental health has improved, you are getting a good promotion and your old debts are at least not bothering you any more.
Lee says
Thank you for this advice.
Can I also confirm is it possible to renegotiate the period the IVA is over? If my payments are higher can we renegotiate to make the payments over a shorter period?
Also if my IVA does fail, can they still make me go bankrupt with such a substantial expendable income?
Sara (Debt Camel) says
Your higher payments will go on until you have repaid the total debt plus IVA fees plus (possibly, it depends on the terms of your IVA) 8% interest.
Trying to save hard to accumulate money to pay off the IVA early would be hard work and won’t save you much money. Even if the IVA is paid off early it remains on your credit record for the rest of the 6 years so your credit score will not improve much (that also applies if you let the IVA fail).
It is unusual for an IVA firm to make someone bankrupt but it in theory yes they can (if your IVA says this – most do.)
Lee says
I have just found this link too, although it’s from 2013. Do you know of any changes that would impact on this as it looks like once I am earning more I could have a discussion with my insolvency practitioner to decide if this is the best option.
https://www.debtadvisorycentre.co.uk/blog/can-i-switch-from-an-iva-to-a-debt-management-plan-0-4042-0
Sara (Debt Camel) says
you can talk to your IVA firm about this but the change would have to be approved by your creditors.
Lee says
Thank you, you’ve been very helpful
Arsalan says
Hi i am about to start an IVA currently application is in process and my monthly payments would be £120 for 60 months. All i want to know can i make a lump sump offer after one year of £3500-4000? So i can finish an IVA early does IVA depend on monthly payments to finish or actually debt which is mine around £17000
Any suggestions would be appreciated.
Sara (Debt Camel) says
These may sound irrelevant questions, but they aren’t:
– Do you have a house with equity?
– Where would the lump sum be coming from?
– Is there one creditor that has a very large percentage of the debt?
– Have you already defaulted on most of the debt, if so how long ago?
Arsalan says
Yes HsBC is the largest, i have a house on mortgage and lump sump is going to be a gift from my dad, i have not been giving loan, overdraft and credit card money to hsbc for a year now hence in IVA total debt is around £17500 in which around £13500 is f rom HSBC.
Sara (Debt Camel) says
You don’t have the right to have a settlement offer accepted at any point, it has to be proposed to your creditors and voted on. Your creditors will probably compare what you are offering with what they will get if the IVA continues.
HSBC owns over 75% of the debt in the proposed IVA. That means they have a veto over the IVA being set up and also that they will have a veto over any future settlement, however much you offer.
After a year you will still have 48 payments remaining which would be £5760. AND if there is equity in your house your creditors would normally expect an extra year of payments to be added on the end of the 5 years if you cannot remortgage in the last year to release equity. That would suggest a total payment of £7200. And these numbers would be more if at the end of a year your income had gone up as they would expect your IVA payments to increase…
It seems to me that it is unlikely that the creditors would accept £4000 or less after a year. It’s not impossible, but at this point I think you should assume it probably wouldn’t happen.
Also if your IVA is ended early it still remains on your credit record for the rest of the 6 years and you need to know it will be very difficult to remortgage and any credit such as car finance will be very expensive during that time.
So the proposed IVA – can I check you have thought about some things. They don’t mean an IVA is wrong for you but you need to go into it with your eyes wide open:
1) have you read up about needing to release equity in the last year? Your IVA firm (who is it?) may have told you a remortgage is likely but did they talk to you about a secured loan? Some people have been told they have to take a secure loan out at more than 15% interest, see https://debtcamel.co.uk/iva-secured-loan/. Don’t assume this won’t be a problem! My suggestion would be to talk to StepChange about an IVA as they are a charity and won’t try to do this sort of thing.
2) do you have a car on finance? If so, what will happen when the finance ends? you will only be able to get new finance at a very high interest rate, often over 40%
3) is it likely you might inherit any money, take money from your pension, or get a good redundancy payout within the term of the IVa – 5 years plus and extra when you can’t release equity? Because in an IVA you may well lose the lot.
4) 30% of IVAs fail. If your income goes up the £120 a month will be increased.
Arsalan says
Do we make full and final lump sump offer according to IVA monthly payments left or according to actually debt for example i have 60 months left remaining of £120 which are £7200 or £17500 which is a actually debt. Advice please
Kind regards
Thanks
Sara (Debt Camel) says
It is normal to base them on the amount you would have to repay. Which may be more than £7200 at the end of the first year if your income has increased.
You should not go into this IVA assuming things will be OK as you will be able to settle it after a year.
Amy says
I have just read quite a few of these comments and one in particular resonated with me – I also have been struggling with my mental health and I believe I was miss sold an IVA last year. I was struggling but I think there might have been other options. At the time I had asked if my bonuses and extra payments would mean the IVA is paid of earlier, and even just now for my annual review (aren’t these calls recorded??). I notified them of a bonus and salary increase last year. they wouldn’t take this into account or give advice till it actually happened and I had my payslips and statements. I needed to use the money pronto for my leave to remain visa, so of course now I have 12 months to pay the additional. When I signed up they wouldn’t take my payments of £300 a month to my daughters father into consideration because we have no legal agreement. This is for her father to take my child to school and for expenses as I live in a different area, cannot drive due to epilepsy, if I moved to another area I would have no work as what I do is very specialised so I will end up in a min wage situation.
My boss would likely help me out to get out of this. But because this would be from my employer they would just take this as extra income and I would have to continue paying for 5 years, is that correct?
Sara (Debt Camel) says
can we go back to basics? Are you buying or renting? how large are the debts that went into your IVA?
is this your first annual review?
how much are you paying a month?
Amy says
Hi Sara – sure. Sorry I had a whole rant there. to the point where it wouldn’t fit :)
I am renting, my debt was £12,178.28
This is my first annual review
I pay £154 each month
They now want me to pay £209.50 and half of my bonus £1756.35. They are right, I can’t argue really. But I can’t afford it so I want out and would do anything.
I do feel like a fool. I had even said I receive 1-2 bonuses a year so could pay it off early without taking it all in (and I say taking in because I did read everything, I was just not in a good head space). They are very quick to call us back and sign us up aren’t they?
For anyone else out there please get a second person to read over everything if you are feeling a bit vulnerable.
Sara (Debt Camel) says
They now want me to pay £209.50
is that affordable?
Amy Priest says
Not with an extra £146.36 on top, and to be honest even with the £209.50 alone – no. My increases are offset by the fact that this childcare wasn’t a factor last year. My bonus sounds large, my salary sounds ok, but I live in an expensive area and I have to support my child alone, and need to renew my leave to remain visa every 36 months which was about £4K in January.
I would ask a family member to help but the NZD to GBP is not great haha.
Hence me wanting to just pay this off somehow in a bulk amount. I guess in my situation if I was wanting to pay using money from my employer I would need to offer close to or even above the original debt amount less what I have paid?
Sara (Debt Camel) says
I think you should go back and argue why £209 is unaffordable. Also explain that you need the money to pay for the visa and you want your creditors to agree that this can be paid for out of your bonus. Point out that this will happen again in 3 years.
Jamie says
Hi, I was wondering if I could get some advice please? I have almost completed my second year of a five year Iva and in the process of an annual review. At the start of the Iva I had a total debt of approx £75,000. I started paying £479 a month which would mean I ended up paying approx £29,000 of the debt. The Iva is in my own name only as is my house. Re the house, I have about £30,000 equity but am on fixed mortgage for the next four years. Both last year and this, creditfix have asked for both my wife and my income and a list of our outgoings. Even with the current payment, we are very short every month causing my wife to get more and more into debt to make up the shortfall. I have just been informed by creditfix that in spite of this, my payments are going to increase by £134 per month. I am therefore going either fail with my Iva or my wife will end up with unmanageable debt. Our wages never really change from one year to the next. Any advice would be welcome, thanks.
Sara (Debt Camel) says
Does your wife have debts as well?
Jamie says
Hi, yes she’s does
Sara (Debt Camel) says
Then that may be the problem? is she paying them in full? There is no particular reason why your creditors should be paid less while hers are being paid in full unless she earns a lot more than you and her debts are low? Why didnt you look at a joint IVA at the start?
Jamie says
Hi Sara,
She earns approximately £300 more than me because she doesn’t pay into the pension scheme. She is only paying the minimum payments on her debts which were negligible when I started my Iva. I have recently got off the phone to creditfix and have been informed that although they have sent me a form to fill in showing my expenditure for everything (including things like Christmas and birthday presents for my children) they don’t actually take into account any extra expenditure other than my mortgage and bills and a bog standard figure for my household outgoings which is directed by the government. I thought it was quite amusing when the guy I spoke to admitted that the figure they had to use for everyday expenses, he couldn’t live on
Sara (Debt Camel) says
a bog standard figure for my household outgoings which is directed by the government.
So how much is allowed for that? and how many children do you have?
does that include utilities and clothes?
Amy says
Thank you Sara that is actually really helpful. It may mean if I can’t get out of my IVA I have options.
I am sure others are the same, I am struggling with the fact that even if I work really hard my debt doesn’t really go down, and they just take more so you are never better off. I really needed to get second opinions when I signed up.
The Insolvency Practice were helpful today in saying that I should look at a final offer after my annual review, and explained the pros and cons of early settlement. They said it would be ok for my employer to pay as long as the money goes direct to the IVA and not into my account, and if any debt is incurred this should be factored in. They had also replied to my email about my payments to my daughters father and said that my IVA stated I don’t RECEIVE any money for childcare, which is still true, I pay it! Anyway all of their calls are recorded and I know I discussed everything with them at the time which is good. When I phone the are so lovely and helpful and I can see how I got sucked in. I think a debt management plan might have been better for me! I hope I can get out of this and good luck all x
Catherine says
Hi Sara
I’m into the 4th year of my iVA through Creditfix and have just retired. My debt currently stands at £6500 down from a total of £13027 in March 2018. I had been in a DMP with PayPlan then was contacted by Claim Easy who persuaded me, after a discussion, to apply for an IVA through Creditfix. At the time I just wanted my debts off my mind and, as I was on a fixed term contract working 30 hours a week, the IVA seemed like a good idea as I didn’t qualify for a DRO. .
At the moment, I have just received a lump sum of £3000 from my pension plus another £500 that I have managed to save so I contacted Creditfix to ask about settling the IVA. However, they are saying that this amount will not be enough to persuade my creditors to agree to settle and I would need to see if I could get another £1700 from a “friend or relative” to make up the amount that they think my creditors would accept. Please could you offer me any advice as to whether I should try to settle the IVA early or just let it run until the end and does my lump sum count as a windfall that I will have to pay it into the IVA even if I can’t manage to get the extra money to settle in full?
I live in private rented accommodation at £450 per month.
My monthly payment to Creditfix is currently £220 per month and would want to reduce this amount if I can’t afford to settle the IVA.
Sara (Debt Camel) says
So your IVA started in March 2018, so you have about 21 payments left?
Have you retired at your normal pension age? What did Creditfix say about what would happen when you retired to your IVA?
What was your income at work and what will your new pension income be?
Catherine says
Yes, it should be 21 months left and I was 66 in February and retired at the end of March when my fixed term contract ended. Creditfix have not said anything about what would happen when I retired.
My monthly pay at work had been around £1200 net in my last year at work I am now receiving the full state pension plus £265 per month in total from 2 separate company pensions.
Sara (Debt Camel) says
and your full state pension is?
Catherine says
It’s £179.60 per week and is paid every 4 weeks into my bank account.
Sara (Debt Camel) says
so that is 1043 a month in total with your private pensions – so you are down £157 a month – which is why you cannot afford to carry on paying £220 a month.
Creditfix should have explained to you what would happen when you retired, because it was clear that would normally happen during the IVA.
I think you should go back to Creditfix and complain, saying the retirement situation should have been made clear when you started your IVA and that your income is now reduced to [give the details] so you cannot possibly carry on paying £220 a month. So your offer of the £3000 pension lump sum plus £500 is a reasonable one to complete your IVA and you would like this to be out to your creditors to vote on it.
If this feels worrying, you could talk to your local Citizens Advice and ask them to help deal with Creditfix for you.
Rizwan says
I started my IVA with Stephanie 8 months ago and paying £98 a month. My total debts are £20000. Since I started my IVA I got a lump on my neck . My GP refers me to hospital . After taking urgent MRI and CT scan they find cancer activity. I am still in treatment. Can I do a full and final settlement as one of my family friend can help me and provide me £4000 as gift?
Sara (Debt Camel) says
I assume that was an autocorrect for StepChange.
Are you buying or renting?
Rizwan says
Yes it’s Stepchange. I am renting and on low income. Claiming housing benefit.
Sara (Debt Camel) says
How are you finding the £98 a month payments? Has your income gone down or your expenses gone up?
Rizwan says
I work 24 hrs a week. It’s 100 hrs a month. The creditors gave me modification to apply for disability allowance / my wife must look for work to improve the £98 amount. Because of my circumstances they held the modification for time being but now they asked again.
NHB says
I have 16 months remaining on my IVA. I have always paid in full and on time, and have declared the two bonuses I have received and paid the percentage of them too. a year and a half into my IVA I was diagnosed with Type 1 diabetes which they believe was brought on due to stress – my debt started when my partner passed away suddenly. I was only 23.
I am now looking to focus on my health, both mentally and physically, and leave my stressful job at the end of this year. This will mean my income goes down considerably – meaning I will probably struggle to pay my IVA next year. I have saved every penny that was left over from my Christmas bonuses – meaning I have £1600 in savings. I have £2596 left to pay on my IVA – do you think a £1600 offer would be accepted at this point in my IVA?
I would love to not have this stress and to move on with my life, drawing a line under debt forever after a very very stressful and scary 6 years!
Sara (Debt Camel) says
do you have a house with equity?
you say you will be leaving your job at the end of the year – will you get another Christmas bonus before then?
NHB says
No I am in rented accommodation, and I doubt it – I say Christmas bonus but it is actually just my boss avoiding giving me a pay rise – I haven’t asked for one this year as I know I want to leave so I doubt he will offer it!
Sara (Debt Camel) says
Well the problem with making an offer to your IVA is that at the moment your creditors may expect that you will get that bonus.
Is your job ending at the end of the year or will you be resigning? Do you have another less well paid job to go to?
NHB says
Could I offer to send my December pay slip as proof? I will be resigning and going self employed.
Sara (Debt Camel) says
So the problem is that unless your doctor will say you need to do this for health reasons, or you are sacked or your contract comes to an end, your IVA firm may think you should just carry on wioith your job until your IVA ends. I can’t really guess what will happen here.
NHB says
I think I could easily get a note from my doctor, I have a history of mental health issues and that alongside a chronic illness is definitely enough to mean I need to leave my job. I know myself that I need to, so I’ll do anything I can to leave.
Sara (Debt Camel) says
That will help. I suggest you wait until you have left the job, have the last payslip showing no bonus and then consider your situation. You can point out to your IVA firm that either you need a payment break – with an uncertain prospect of ever getting back to pay the previous payment – or you could settle it now for 31600.
Julia says
I Have just lost my job and am disabled with a degenerative condition that is only going to get worse. With my disability, accommodating it is difficult, so really hard for me to find another job. As such my income has obviously gone down and I am in a IVA.
I Have asked my IVA payments made over the last 3.5 years to be offered as a full and final, as I cant see me getting a job again any time soon with all that’s going on in the world and also my illness.
One of the creditors is my Ex husband who has been sent the relevant forms. He has contacted me (we are still in contact for the sake of our children), and asked what it means as uses legal language.
it says voting instructions:-
1) paid to date accept/reject
2) Discretion to fail accept/reject
He is happy with the payments I have made to date, and is very understanding, but when he rang the IVA company, they told him they can not advise on voting then tried to transfer him to someone who could explain, and then the phone went dead. He was on hold before hand for 30 odd minutes. He tried again but he put the phone down after another 40 minutes of on hold music……. Because of this I don’t want to rock the boat and ask him to ring again, but what do both mean? I’m not in anyway trying to sway his position, that’s his to make, but rather to explain what each mean.
I have given him this website, so he might be along asking the same question shortly!
kindest regards.
Sara (Debt Camel) says
It sounds as though you are just trying to set up an IVA.
Can I ask if you have a house with equity? Or a car that is worth more than £2000?
How much do you owe your ex and how much have you been paying him? Have you been able to pay all your other debts so far, and it is only the loss of your job that is a problem?
Are you in receipt of PIP?
How large are the debts that will go into your IVA?
Julia says
Hi Sara,
Thank you for your reply,
No ive deffinetly been in an IVA for 3.5 years. I contacted my IVA company as I was going to offer a full and final, but read through a previous post of someone who was ill and asked them that due to my change in circumstances would they consider the matter closed on my current payment balance for the last 3.5 years (on a 5 year IVA).
My creditors variation meeting is next week, and that’s why my ex has had the paperwork come through as he was one of my debts.
I don’t have a house with equity, I rent and I cant drive due to my illness so no car.
I owed my ex £18200, it was a proper legal loan that was signed by us both, and he got a percentage of my payment to my IVA company. Yes, I get PIP. My debts were (including a car) around 60K.
Sara (Debt Camel) says
Ah sorry, I misread part of what you wrote.
Getting your creditors to agree to accept that your IVA is treated as completed on the basis of the funds paid to date sounds like a good option for you now.
The IVA firm cannot give any advice. From what you have said, if this isn’t agreed, the IVA will probably fail as you can’t carry on with the payments after you lose your job – so your creditors, including your ex, don’t really have a choice between between voting in favour (being nice and not getting any more money) or voting against (being nasty and getting more money). They aren’t going to get any more either way…
Do you think that is correct? I understand your reluctance to sway what he does, but there isn’t much point in leaving him in the dark thinking he may be able to get more money back if you won’t be able to afford it.
J says
Hi
My current iva balance is £8250 i am only 6 months into the iva and the monthly payment i make is £150pm. I have just found out my salary is increasing from 20k to 26k and i know once they are aware of this they will try make the payment higher. I am worried as to what that amount will change to so asked them if i was to ask a family member to make an offer to clear the iva and stop the monthly payments what would be acceptable.
They said i need to make an offer first just wanted some advice of what offer i should put forward if my balance is now at £8250? Or should i just continue to pay it and pray they dont make my payments go up much higher when my new salary starts?
Thanks
Sara (Debt Camel) says
My current iva balance is £8250
Do you mean the total of your remaining IVA payments at the current monthly rate?
It is misleading to think of that as your “IVA balance” as though it is loan you can just pay off.
If you have a house with equity, then are you allowing for making an extra year of IVA payments at the end?
pray they dont make my payments go up much higher when my new salary starts?
That isn’t going to work! Unless you can argue your expenses have gone up a lot, then you are going to be paying a lot more to your IVA.
How big were the debts that went into your IVA? How have the £150 payments been so far, easy enough? Any problems?
Were you expecting a big pay rise at some point when you started the IVA?
When is your pay going up? because it takes time to get a settlement agreed…
J says
Yes the total amount remaining on my iva payments over the 5 years is at 8250
I dont own a property so dont have to worry about equity
Do they have a set allowance of what can be used on food/bills ect as when i started it they said i am at the max of these costs
Payments have been easy to manage no problems debt was over 20k
Were you expecting a big pay rise at some point when you started the IVA?
No this came unexpectedly
When is your pay going up? because it takes time to get a settlement agreed…
My first wage of my new salary takes effect from end of sept
Sara (Debt Camel) says
OK, so you can propose to your IVA firm that you offer a settlement of the remaining contributions. But you need to tell the IVA form about your pay rise I am afraid and that may mean they are a lot less likely to accept that amount.
Your IVA should say how much of a pay rise you will have to pay in. It iwill be net obviously of tax and NI and pension contributions. Are you making pension contyributions at present?
J says
So the remaining contributions is 8250 what would you think is a reasonable offer for them to accept to settle the iva early
Iv told them about my pay rise however they said they will look into it once i actually get the payment which is end of sept
To then work out what is affordable, i don’t contribute to a pension
If they do try to raise what i pay surely if i let them know my expenses have gone up too it shouldn’t go up drastically too much i hope anyways
Sara (Debt Camel) says
I think you should make a list of your expenses that have gone up. And say you should be contributing to your pension – find out what the normal contribution is from your company.
You need to do that and work out how much your take home pay will be going up.
John says
Hi I was just wondering would creditfix my iva provider accept my wife’s 2500 redundancy when she gets it in December as a settlement because by then we would have just 11 months left and we would have about 3000 left to pay by then.
Sara (Debt Camel) says
Is the IVA just yours or does your wife have one too?
Is she likely to be able to find a new job soon?
John says
Hi its a joint one because we have some in joint names.
The problem is she has been given 3 months notice from 21st September 2021 and after the next week she won’t have to go in whilst being paid her normal wage till 14at December and then on that date she will be paid the redundancy as well.
Also her friend said she might be able to get her a part time cleaning job which does pay 80.00 less per month so we are just weighing up to see if its worth doing.
My last point is when she gets redundancy do you think we could offer the amount for final settlement.
Sara (Debt Camel) says
Probably not. She can keep up to 6 months worth of redundancy money to let her carry on making the normal payments. So that would be theee months. Then you should be able to get a variation so that your IVA payments are reduced if she is on a lower income.
John says
Also I just wondered if they would let you use any of the redundancy ibecause our stair carpet is got holes in it and dangerous.
Sara (Debt Camel) says
You can ask, but they may want to extend the IVA if you want to do that. And with less than a year to go, you might prefer to just get to the end.
John says
OK thankyou for your help.
Angeldust12 says
Hi can anyone give me some much needed advice. Had IVA 6 months pay £150 a month over 5 years. Gas and electricity has gone up due to covid wages have decreased I’ve spoke to insolvency practitioners and they said they can do a review to lower payments or if I had someone willing to gift money they could send an offer to creditors I was going to offer £8000 which is what is left to pay over the 5 years. Can anyone gift you the money or would it be better a family member? I just want out of this IVA.. my husband has been offered a position by an old employer and wages would increase significantly and don’t want to pay it into IVA could his potential employer pay it off?
Thanks
Sara (Debt Camel) says
Can I ask if you have any assets to protect? A house with Equity? A car?
Angeldust12 says
Hi no house we privately rent and we have a car that’s paid off.
Sara (Debt Camel) says
is it just you in the IVA or your husband as well?
How much is the car worth, whose name is it in, yours or his?
Angeldust12 says
It’s both of us, the car is worth £5000 and it’d in his name. I need my car as my son is disabled and gets dla I need it to take him to hospital appointments.
Thanks
Sara (Debt Camel) says
To answer your question, the money could come from anyone. But the IVA firm will ask who it is from and the creditors may be informed. Whether they would think this was odd coming from a firm, I don’t know.
When would your husband start this new job? Because it takes time for an IVA settlement to go through and the IVA firm will run a closing review if the settlement is affected and if his salary has gone up, they may block the completion unless you have told them before the settlement offer about the increase.
Angeldust12 says
That’s the problem the job is to start in November but he could maybe delay until January would that give it time to be completed? And a family friend has also come forward and said they would pay it off?”
Sara (Debt Camel) says
It will take over a month to go through. January would be safer. A family friend may be simpler.
Sara (Debt Camel) says
you do need to feel that this new job will be secure though. Otherwise you could be left owing a large debt to a family member :(
Angeldust12 says
Thanks for your advice really appreciated…. the debt was not taken out for a lavish lifestyle my son had 4 open heart surgeries when he was 6 weeks old and spent 1 year in intensive care he was self employed and was unable to work given the situation we had to move to the hospital with our other children whilst paying rent on our home so that it was there when he came home. When my son came home he had a tracheostomy and so my husband couldn’t return to work as he helped me as we where still in and out of hospital. Then he returned to work and we where paying about £800 a month off debt so found ourselves using credit cards just to get by. Then covid hit and we where told we had to shield because of our son and the company he worked for went bankrupt so we found ourself in a difficult position where we had to take action and was advised an iva was best option. Now he has opportunity to start work again but we don’t want to end up like before working every hour and having no money at all as IVA will take it. Is bankruptcy the best option? And if he works do they take 50% over the basic cost of living or do they take all of it?
Thanks
Sara (Debt Camel) says
I am so sorry, that must have been so hard. It is a great shame you didnt opt for a debt management plan, not an IVA, but now you are in the IVA you need to work out what to do now.
Bankruptcy is unlikely to be a good option as you would be likely to lose the car.
Angeldust12 says
Do they do a review on banks before submitting an offer to end IVA and if it gets accepted do they check your bank again?
Thanks
Sara (Debt Camel) says
I can’t say what your IVA firm will do. But it is very common to ask for bank statements for the final review at closing the IVA.
Angeldust12 says
Thank you so much for your advice it is much appreciated. We have decided that we are going to put an offer of the full amount of IVA payments that’s left as our friends have gifted us it we have nothing to lose if they refuse then I guess we will just carry on as we are and try again in a few months. I will keep you updated of how we progress. Thank you 😊