IVA - full and Final Settlement.

when is a full & Final IVA suitable ?

Full and Final IVAs are suitable when the debtor has access to a lump sum of money, but insufficient ongoing disposable income to make continuous monthly payments.

When to make a Full and Final Offer

A Full and Final settlement offer can be made as part of an IVA proposal or at any stage during the IVA to bring it to an early conclusion. If you are already in an IVA, you will need to speak to your IVA supervisor about changing the terms of your agreement.

Like all repayment offers in an IVA, approval by 75% of creditors (by value of the debt) is required. All creditors must be treated equally, so offers must be pro-rata; proportional to the amount owed to that individual creditor as a percentage of the total debt.

Raising money to make Full and Final payment offer

Typical sources of capital to make a Full and Final offer include:

• Sales of assets
• Remortgage
• Gift from family or friends
• Inheritance or other windfalls.

What you are not allowed to do is take out a conventional unsecured loan to raise the money.

Any financial arrangement between family/friends would require written confirmation that the money does not need to be repaid.

Benefits of a Full and Final IVA

Many IVAs are settled early due to the introduction of capital into the pot.

Creditors welcome full and final offers as they get their money sooner and don't need to continue supervisor payments to the IVA company.

It also gives the debtor the opportunity to start to restore their credit rating sooner.