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  • Saving for a F&F

    Ok so we are 1 year into a 5 yr IVA and it's going ok so far, I have seen a lot of information about offering a full and final to finish the IVA early which I understand needs to be as near to the projected dividend as possible.

    There are a couple of things I am wondering.

    Firstly, I find it rather strange that an awful lot of people who are in an IVA suddenly find a friend or member of the family who is willing to loan them thousands for a F&F, I can understand this happens, but not on the scale I have seen, I am therefore thinking that these people have possibly come into some money and instead of declaring it as a windfall, are somehow managing to get a friend or member of the family to write a letter saying they are loaning the money as a F&F.

    Now, we are finding things ok and as we had been in some debt for some time and used to living on a very tight budget, we are finding the allowances we have are ok and we are able to put some money away every month, we are wondering if we could save as much as we can and then in a year or so's time, offer our savings as a F&F, would this be acceptable or would we have to do the 'a member of my family has offered this money' thing?

    I am fortunate that I earn extra money through unsocial hrs payments and occasional overtime that is not calculated in my basic pay for my IVA payment (I can keep 10% above my basic pay and split any more 50/50 with the IVA and for me to keep) so I have enough to save each month.

    As we have been paying extra in every month we have paid over an extra £1200 in the first year alone than was expected, this is great as it means our creditors get a better dividend, but what I need to find out is the expected dividend is 20p in the £1 which works out at £15k to be paid back, I understand that I will always owe the total debt plus fees until the IVA completes, but would the extra I will have paid in have any bearing on the amount I can offer as a F&F?

    For instance, by this time next year, I would hope to have £6k saved, at that time the remaining payments total £8k, but with the extra I have paid in this would come down to about £7k, do you think my IP would take that into consideration when looking at a F&F as my proposal only states that the dividend expected is 20p, which they would still be getting, but 3 years early?

    I am sorry for the long post but I would be grateful for any thoughts

  • #2
    Re: Saving for a F&F

    Hi skyla.

    I can't answer your questions regarding how the F&F would work when you are in an IVA, but I'm sure someone with knowledge in this area will be along soonly

    In the meantime, the following link is a good place to start with F&F offers and would help to explain why people use a third party to make the offer
    http://forums.all-about-debt.co.uk/showthread.php?t=236

    Creditors have been known to bank the F&F money, but not actually use it for its proper purpose, but instead use it as a part payment, hence the wariness when offering/sending money.

    Hope this helps for now.
    If happy little bluebirds fly, beyond the rainbow, why, oh why can't I?

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    • #3
      Re: Saving for a F&F

      Thank you so much, I wish I had found this site before my IVA as I think we would have looked at the UE route as most of our debts were CC's taken out before 2005, oh well you live and learn.

      Yes my biggest concern would be the creditors just taking the money we saved against the debt we owe into the IVA pot and us having to carry on anyway, the difficulty is going to be convincing someone to state the money is from them, noone knows about our IVA apart from me and my hubby, I'm estarnged from my own parents and my hubby's parents won't even claim off the house insurance when they need to as they feel a fraud! so I can't imagine for a minute they would do this for us.

      It's going to be very hard to save this money as we really will have to live on the breadline to do it for the next 11 months but it would be worth it to draw a line under the whole saga

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      • #4
        Re: Saving for a F&F

        Originally posted by skyla View Post
        Thank you so much, I wish I had found this site before my IVA as I think we would have looked at the UE route as most of our debts were CC's taken out before 2005, oh well you live and learn.
        Are you sure it's not too late to consider UE? I thought you could cancel an IVA at any time or let it fail, but you need to check that with yout IP, although bare in mind the IP is probably getting "management" fees while you remain in an IVA so may not be motivated to let you go. Don't do anything based on what I've just said but do check it out as an option

        I would kick myself if I spent five years paying off any debts which couldn't be enforced in the first place
        I don't give advice, I share wisdom. Whenever the chips are down there's always a Plan B

        I'm a fully qualified mother which is the hardest exam I've ever sat. I have other more formal qualifications which are less important

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        • #5
          Re: Saving for a F&F

          I thought IVA's were legally binding? Not sure either PlanB, so it's best for someone with proper insight to come along me thinks! Would hate to give skyla incorrect info xxx
          If happy little bluebirds fly, beyond the rainbow, why, oh why can't I?

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          • #6
            Re: Saving for a F&F

            Yes you can let it fail, just by missing 3 payments but to be honest I'd be too scared to do that now at this stage, if I found out any of our accounts weren't unenforceable then we would be back at square 1

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            • #7
              Re: Saving for a F&F

              Originally posted by skyla View Post
              Yes you can let it fail, just by missing 3 payments but to be honest I'd be too scared to do that now at this stage, if I found out any of our accounts weren't unenforceable then we would be back at square 1
              I'd not suggest doing this either, what is the term of the IVA (6yrs?)......

              I presumed at the end of the IVA that was it, you start afresh - or have things changed (or have I misread things)> i.e. why not just see the IVA out....?
              I'm the forum administrator and I look after the theme & features, our volunteers & users and also look after any complaints or Data Protection queries that pass through the forum or main website. I am extremely busy so if you do contact me or need a reply to a forum post then use the email or PM features offered because I do miss things and get tied up for days at a time!

              If you spot any spammers, AE's, abusive or libellous posts or anything else that just doesn't feel right then please report them to me as soon as you spot them at: webmaster@all-about-debt.co.uk

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              • #8
                Re: Saving for a F&F

                Would it help to know whether any of these debts are UE in order to drive a hard bargain with any F & F s being planned which is what Skyla is considering? I suppose it depends on the sums involved.
                Last edited by PlanB; 6 March 2012, 14:41. Reason: added words
                I don't give advice, I share wisdom. Whenever the chips are down there's always a Plan B

                I'm a fully qualified mother which is the hardest exam I've ever sat. I have other more formal qualifications which are less important

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                • #9
                  Re: Saving for a F&F

                  Yes diddly, it is legally binding so we currently have legal protection and all interest stopped. I have to say, I'm more than happy with our IVA company as they've been fantastic but it's just I feel in limbo and that it's neverending, life is hard.

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                  • #10
                    Re: Saving for a F&F

                    our IVA is 5 yrs, so 4 yrs to go, I guess I would just like an early resolution to it next year, I see so many people doing F&F's during the term of the IVA, but this means a year of cutting back extremely hard to save enough to do it.

                    I think my key point was, if we do get the savings together, how would we offer a F&F without involving anyone else?, would they just be entitled to that money we managed to save from our allowances anyway?

                    I don't think we would be able to drive a harder bargain regarding UE as as far as the IVA company are concerned, the full debts are owed by us

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                    • #11
                      Re: Saving for a F&F

                      Although it's hard sitting out the five years at least you know you are protected from any legal hassle or interest added for all that time

                      You've not said whether you are a homeowner or have entered into an 'Equity Clause' as part of your IVA which could impact on the end game when creditors may be able to ask for this to be taken into account after a re-valuation of your property since the beginning of the IVA deal. But if you haven't got a property it seems the deal you've set up means you're safe and sound for the next four years. And if you have any unexpected drop in your income (redundancy or less overtime/bonuses etc) I expect you can asked your Superviser to reduce your payments accordingly by agreement with your creditors
                      I don't give advice, I share wisdom. Whenever the chips are down there's always a Plan B

                      I'm a fully qualified mother which is the hardest exam I've ever sat. I have other more formal qualifications which are less important

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                      • #12
                        Re: Saving for a F&F

                        Sorry I thought you said it was 5 years in already, not just one year!

                        I guess you could continue with the IVA and consider UE in the meantime, although you'll be met with resistance as you're in a formal agreement thus the lenders won't always play ball and may mess you around somewhat.

                        If you fancy a crack at UE just send a CCA Request and then let us know what they send back, worse case - you could end the IVA and instead have a dmp paying only maybe 10% of the monthly premium, or even save enough for F&F however without the details of the debts we'd be hard pressed to confirm.
                        I'm the forum administrator and I look after the theme & features, our volunteers & users and also look after any complaints or Data Protection queries that pass through the forum or main website. I am extremely busy so if you do contact me or need a reply to a forum post then use the email or PM features offered because I do miss things and get tied up for days at a time!

                        If you spot any spammers, AE's, abusive or libellous posts or anything else that just doesn't feel right then please report them to me as soon as you spot them at: webmaster@all-about-debt.co.uk

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                        • #13
                          Re: Saving for a F&F

                          Originally posted by diddlydee View Post
                          I thought IVA's were legally binding? Not sure either PlanB, so it's best for someone with proper insight to come along me thinks! Would hate to give skyla incorrect info xxx
                          Yes diddy IVAa are legally binding but they're also a little bit voluntary too As as I understand it the terms can be renegotiated at any time as long as all the creditors agree to the change. It's not uncommon to agree F & Fs because creditors may like to accept a bird-in-the-hand approach rather than sit out the full 5 years when a debtor may default or lose income stream before the end of the deal. I read that IVAs have a failure rate of 20% - 30% (if you believe statistics!). Even the payments over 5 years don't add up to anything like the 100% the creditor is owed which helps to focus their money minds when a F & F appears on the horizon
                          I don't give advice, I share wisdom. Whenever the chips are down there's always a Plan B

                          I'm a fully qualified mother which is the hardest exam I've ever sat. I have other more formal qualifications which are less important

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                          • #14
                            Re: Saving for a F&F

                            If you want to go for F&F then you can actually save the pot of cash then take that to the insolvency practice handling your insolvency (IVA) and ask them to utilise it towards a F&F offer but then they'll take a cut so best way is usually to come off the IVA by mutual consent then to do F&F's direct to the lenders, usually around 20p in the £1....

                            Is that even viable for you? You can't do one then another if via the IP as they'd negotiate them all as one - to do one at a time you'd need to do it yourself...
                            I'm the forum administrator and I look after the theme & features, our volunteers & users and also look after any complaints or Data Protection queries that pass through the forum or main website. I am extremely busy so if you do contact me or need a reply to a forum post then use the email or PM features offered because I do miss things and get tied up for days at a time!

                            If you spot any spammers, AE's, abusive or libellous posts or anything else that just doesn't feel right then please report them to me as soon as you spot them at: webmaster@all-about-debt.co.uk

                            Comment


                            • #15
                              Re: Saving for a F&F

                              Yes you're right planB, our dividend works out at 20% I believe, the original total debt between us was £56k and the amount they're going to get back over the term (if nothing changes) is £11k net of fees, by next Feb we will have paid back about £7k and was going to offer another £6.5k to end it early, our payments are £260 a month but obviously I also pay over a bit more each month depending on what unsocial hrs I work, this works out on average another £60 a month.

                              What I can't figure out is if we started the ball rolling in Feb next yr, there would still be a further 37 months to go which based on £260 a month would mean payments in total of 9620, but as we would have paid in about £2.5k more than they would have expected by this point anyway, would they still want £9620 to settle it, or do you think they would accept £6.5k based on the fact we had paid in more?

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