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What is a full & final IVA ?

A Full and Final IVA is an IVA in which a single lump sum payment is made to settle the debt problem. Although most IVAs are taken over a period of 5 years it is worth remembering that a Full and Final IVA is still an option, albeit a rare one.

For the majority of people the money to make this single payment could be either a gift or loan from a friend or family or from house equity or a redundancy.

When are they used?
This type of IVA is often used when the person in debt has little or no income to offer their creditors but can obtain a lump sum. It is possible that in some cases a creditor will accept the payments previously made into an IVA as a full and final settlement.
This option could also be necessary as it can be hard to get all the creditors to agree on an amount. Creditors will always look at each case separately as many times bankruptcy will not pay as much as an IVA. For a Full and Final IVA to be accepted, then the debtor must offer the creditors more of a return then they would get from a Bankruptcy or a normal 5 year IVA. So if your creditors see that the Full and Final IVA is the best offer then they will usually agree to this.

How would I go about a Full and Final IVA?
You should always make sure that you contact an Insolvency Practitioner to ensure that a full and final IVA is viable and to receive expert advice on the matter. You will be asked to provide proof of the funds and in the case of house equity they will request to see the mortgage offer. At this point they will then contact the creditors to set up a meeting to discuss the situation. As soon as your creditors have agreed, then you will be asked to pay the funds to your Insolvency Practitioner who will then pass this on to your creditors.

Depending on if the money is available then the process could be finalised in several weeks. If the money is coming from a re-mortgage then this could take several months and from a house sale then up to a year.