If you have access to a lump sum, it may be possible to carry out an IVA with just one full and final payment.

Using the IVA process, your creditors receive the agreed settlement as a one off amount. The IVA is then completed and all outstanding debt is written off immediately leaving you debt free.

To find out more click on one of the following links or continue reading below.

Where to start

• Choose the solution – Use the “Which way should I turn” form to get your FREE DEBT REPORT
• Ask the experts – use the IVA Forum
• Read expert articles about Individual Voluntary Arrangements
• Call us now – speak to one of our advisors in confidence to see if an IVA can work for you.

Take the first step to beating your debt NOW – Call us on 0800 077 6180

The benefits of a full and final settlement IVA

• IVA completed immediately – As soon as the lump sum is paid, the IVA is closed and you are left to get on with your life debt free.

• More debt written off – Because your creditors receive their payment up front, they will normally agree to receive slightly less than a traditional sixty month payment IVA. 

• No ongoing financial reviews – Once a full and final IVA has been paid, the arrangement comes to an end. Creditors can no longer demand increased payments if your financial circumstances then improve over the next five years and beyond.

How much will the lump sum have to be to settle my IVA?

The amount of lump sum required for a full and final settlement IVA will depend on the amount that you owe.

When making the proposal to your creditors, your insolvency practitioner will normally consider the amount that you would be required to pay using a normal 60 month payment plan and whether there is any equity in your property.

Normally the total lump sum you will have to pay will be less than what you would have paid using a standard monthly payment IVA in light of the fact that the risk to your creditors is reduced as they are receiving payment up front and in one go.

Where does the lump sum come from?

A cash lump sum can be generated from a number of sources:

• Property equity released by remortgaging
• A windfall such as a redundancy payment
• A gift or loan from family or friends

If you have borrowed the lump sum you will need to make sure you can afford to make the repayments required.

Bear in mind that you will no longer have any unsecured debts and so the monthly payments to these creditors will stop.

Can I settle if I have already started a normal IVA?

If you have already started a normal monthly payments IVA, you can make an offer of early settlement to your creditors at any time.

This may be possible if the value of your house has unexpectedly increased or friends or family agree to help you raise the required lump sum.

In these circumstances, your IVA will be closed and you will stop making your normal monthly payments.

Your creditors cannot ask you pay a lump sum and continue to make monthly payments as your disposable income will be required to repay the amount you have borrowed.

You should also bear in mind that your ability to use a windfall to settle an IVA which is already up and running will depend on your circumstances. Windfalls should normally be paid into your IVA in addition to the monthly payments you are making.#

More Information: Expert articles

To read articles about individual voluntary arrangements written by our experts please click on the expert articles and news link in the "Useful Links" box below.