Settling an IVA early can be achieved by settling an IVA’s outstanding balance, which could be the result of a change in circumstances.
Typical changes in circumstances that may offer a person the chance to settle their IVA early would include a windfall being received during the IVAs normal 5 year term.
This windfall could be something as unlikely as a lottery win, or another type of large gain, resulting in the opportunity to make an offer of early settlement to your creditors.
Other opportunities could arise to make early offers of settlement, such as 3rd party offers from friends or family. Creditors tend to like the idea of receiving a lump sum settlement, rather than having to wait the full duration of the IVA to receive their money, especially if the funds are provided by a 3rd party.
Owning property can also result in the opportunity to finish an IVA early.
Being in a position to release equity from a property can sometimes generate sufficient funds to get an acceptable offer in front of creditors, and should not be overlooked, even in this economic climate.
One thing that will always be difficult to answer is the question of how much to offer creditors as way of a settlement.
Read this article for a clearer idea of the calculation of IVAs Full and Final Settlement.
It should be a realistic offer and, depending on where the funds are being generated, it ought to be of a similar value to what the creditors would have received over the IVA’s full duration.
However, it is also worth noting that creditors will have a reduction of expected Supervisor Fees if you bring the IVA to an early close.
You will be able to see what the Insolvency Practitioner is charging as a Supervisor Fee by referring to your IVA proposal, as it will have been mentioned in the document for the approval of your creditors.
These Supervisor Fees can add up to a significant amount over the term of the IVA, and are well worth saving, so your settlement figure should reflect this saving.
For more information about settling an IVA early call our free helpline 0800 088 7503 or leave your details on our quick contact form and we will call you back.
Related Articles: