If you are in an IVA and considering making an offer of ‘Full and Final Settlement‘ to your creditors, it is quite natural to try to calculate the size of the offer you are going to have to make, for it to be acceptable to your creditors.
However, as you can imagine, it is rather difficult to find a calculation for something with so many potential variables.
You should be able to approach your Insolvency Practice for a guide as to how much you should offer, and in any event, that would be the protocol, to talk to your Insolvency Practitioner about the offer you wish to make.
In practice, however, any offer that is made to creditors will actually need to come as an instruction from the debtor to the Insolvency Practitioner, bearing in mind that the Insolvency Practitioner is acting as IVA supervisor, and therefore needs to remain impartial.
However, as a rule of thumb, you could use this calculation to find a ‘ball park‘ figure to enable you to find your starting point for discussion.
Your Offer = (IVA V.C.s x IVA Months Remaining) - S.F. Remaining
- VCs = Voluntary Contributions
- S.F. = Supervisor Fees
E.G :- If you are paying £300 into your IVA, and have been in your IVA for 24 months, and your IP is drawing £50 p/m Supervisor Fees, then,
Your Offer = (300 x 36) - (50 x 36)
Your Offer = approx £9,000
To confirm, this is not an exact science, and you should look for guidance from your Insolvency Practitioner as to the actual figure you should offer.
This calculation does not take into account any changes in the IVA’s voluntary contributions, or the introduction of equity into the IVA that might have been agreed in the IVA proposal, and therefore should be used for guidance purposes only.
If you would like to discuss your potential settlement figure with an IVA adviser, then call My IVA Adviser for free on 0800 088 7503 now.
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