IVA Full and Final Settlement Offer

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

If you’re thinking about an IVA Full and Final Settlement, this simple guide is here to help. Every month, over 170,000 people visit our website for advice on debt problems.

In this easy-to-read guide, we’ll show you:

What a Full and Final IVA Settlement is.
How to know when to make a settlement.
The good and bad sides of a Full and Final Settlement.
How much it might cost.
Ways to get the money you need for a settlement.

Our team has people who have been in your shoes — they have faced the same money troubles. With our expertise, we’ll help you figure things out.

What is Full and Final IVA Settlement?

An Individual Voluntary Arrangement (IVA) is a debt settlement option. In such an arrangement, the monthly payments on your debts are handled by insolvency practitioners. Your creditors may only get in touch with your insolvency practitioner for your debt settlements.

An IVA full and final settlement is when you pay a lump sum amount of money at once instead of your monthly payments. This way your IVA ends earlier than 5 years and all your debt is cleared.

How a debt solution could help

Some debt solutions can:

Stop nasty calls from creditors
Freeze interest and charges
Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:

Situation

Monthly income	£2,504
Monthly expenses	£2,345
Total debt	£32,049

Monthly debt repayments

Before	£587
After	£158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

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When to Make a Full and Final IVA settlement?

You can make a full and final IVA settlement if you’ve come across a large amount of money unexpectedly. This money can be in the form of a lottery win, equity or some inheritance that comes your way.

This money can then be used for your full and final IVA settlement and to end your debt to your creditors once and for all.

Usually, when you pay your creditors a lump sum amount of money at once, they even write off some amount from your loan.

People usually go for this settlement debt option when they have a lump sum amount of money but their monthly income is low. This way it becomes inconvenient to pay your creditors small monthly payments for such a long period.

Keep in mind that you should definitely get debt advice from a professional before taking this step as Individual Voluntary Arrangements can be complicated to deal with.

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Pros and Cons of Full and Final Settlement

The pros of a settlement are pretty obvious. You will be debt free and can make a fresh start without any financial pressure. Moreover, your credit report and credit rating will also begin to improve.

The con is that it is very hard to come up with a huge amount of money that can end all your debt in one payment. This applies especially if you have multiple creditors that you have to pay off.

Also, your creditors will probably demand the entire amount of your debt as settlement.

If you continue with your IVA plan, you might end up paying lesser money as your creditors might be willing to right off some of your debt due to the circumstances you’re in; but if you come up with a lump sum amount of money, your creditors might want all of their money back.

However, it can also be the other way round.

This is why it is important to get professional debt advice before making any offers and proposals so that you don’t accidentally make your situation worse.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

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How Much does It Cost?

An IVA settlement is done by first proposing an adequate amount to your lenders. If your creditors think that this amount is sufficient to clear your dues, they will accept your settlement and you will only have to pay the fees of the insolvency practitioner in addition to your settlement.

Frequently Asked Questions (FAQs)

Is Full and Final Settlement in an IVA always beneficial?

Settling your IVA may not always be beneficial for you. Sometimes, your creditors demand more money if you want to settle your debt early. Your creditors will usually compare this money you’re willing to pay to end your IVA against the money they can potentially get by making you bankrupt and will choose the better of those options. However, sometimes creditors want their money back at once and you can get away with paying a smaller amount than your original debt just because you’re paying the amount right away instead of over a span of five years.

Does it Cost Less Compared to Monthly repayment of IVA?

Not always. It is hard to say what happens in every case of every IVA repayment. In some cases, it is a lesser amount as compared to the monthly repayment option. In others, your creditor might be willing to accept lesser money if you’re giving a huge amount at once.

What Are the Best Options of Finance for Full and Final Settlement?

The best options for paying your IVA in full are selling your assets or equity in your name. You can also sell family inheritance to finance your IVA.

Does it Improve my Credit Score?

No, your credit score will only improve after 6 years of your initial IVA announcement. Even if you pay your IVA in full, it does not disappear from your credit report till 6 years after the initial announcement.