Paying off an IVA early is possible.
Most times an IVA suits being paid off early will be due to a change in circumstances, enabling the IVA to be paid off more quickly than was scheduled.
The types of changes in circumstances that allow for paying off an IVA early will need to be substantial, such as receiving a large windfall.
A large windfall really means the unexpected arrival of a large Lump sum of money. So typically this might be an inheritance, or a lottery win, or a gift from a generous friend or relative.
When a large windfall is made available, you should approach the Insolvency Practitioner who is acting as your IVA supervisor.
There are two reasons for this.
Firstly, you may be required to pass the full benefit of the windfall to your IVA supervisor anyway, which would reduce the chances of being able to offer a settlement to your creditors. Your Insolvency Practitioner will be able to explain your obligation to the IVA creditors, and therefore what you are expected to give to your creditors should you receive a windfall payment during your IVA.
Secondly, your supervisor is best placed to advise you with regard the settlement figure. He will be able to guide you as to how much money he believes your creditors will need to be offered as a one off payment for full settlement of the IVA.
And finally with regard to settling an IVA early, there is also the chance of having such an improvement in your household income that your monthly IVA repayments will increase.
This may not be as exciting as a windfall, but can be equally as effective.
A substantial increase in income may allow you to return all the IVA’s outstanding debt within the 5 years of the IVA, in which case you will find the IVA will complete earlier than scheduled.
Read this article for further information on your IVA’s Full and Final settlement calculation
For more information about paying off an IVA early call 0800 088 7503 or leave your details on our quick contact form and we will call you back to explain how you can pay off your IVA early.
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