The Guardian’s “diary of a debtor” blog story has brought up an interesting option for some people in debt – a full and final IVA. We look in more depth at how these work and what’s involved in clearing your debt using this method.
The Guardian’s “Diary of Debtor” blog series really interests me. It’s not often that people are happy to talk about their debt problems, even anonymously.
In this blog, the writer was considering an IVA. Then, almost out of nowhere, a rich relative appeared. They offered a lump sum of around a third of their debts, to use in a full and final IVA.
Full and final IVAs are still quite rare and some readers may be scratching their heads and wondering – why and how? Here’s what you need to know!
How do “full and final” IVAs work?
A full and final IVA can be proposed when the person in debt has access to a lump sum of money. It could be a gift from a relative or a remortgage, for example. Often they do not have any other ongoing disposable income which could be used towards monthly debt repayments. unless the full and final offer is big enough to pay creditors in full.
The offer of a full and final IVA settlement can be made at the initial IVA proposal stage or at any point during the IVA to bring it to an early conclusion.
Anybody already in an IVA should speak to their supervisor, who would make this offer to creditors for them.
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 IVA repayment offers, 75% of your creditors (by value of the debt) need to agree.
You can’t take on another loan to raise the money for this type of IVA. Also, any offer from family or friends must have written confirmation that the money will not need to be repaid.
If you’re thinking about any sort of IVA, it’s worth taking a second to try the ClearDebtdebt calculator. It shows you, based on data from real IVAs, how much you could save every month in a ClearDebt IVA. Or ,call one of our experienced advisors on 0800 019 2095.