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How Does an IVA Early Settlement Work ?

Should you wish to settle your Individual Voluntary Agreement (IVA) early then you can do so by offering the creditors an amount of money to complete the IVA. The amount that you would offer to settle the IVA early should be an amount of money around the settlement amount, ideally enough to satisfy the creditors. Usually the creditors will be happy to accept an early settlement.

What is the process?

When you decide that you wish to settle your IVA early you should inform the supervisor who will then call what is known as a creditors meeting. This will give the creditors the opportunity to consider your offer. During this time it will also be necessary for a new financial statement to be produced which will state any information regarding the funds that have been made available.

Should the creditors accept an early settlement then a time limit will be set by which the funds should be paid. Often this will be around three months.

In what circumstances might you settle your IVA early?

There are a number of ways in which you might suddenly find yourself in a position to complete your IVA early. It could be that a friend or family member can offer you a lump sum of money. If this is the case then your IVA supervisor will need to be informed so that they can decide if the offer is feasible. They will also want to know the origins of the money and be given proof that it is available to settle the IVA.

Many people often decide to sell their house so that they can have the peace of mind to settle the IVA early. Should this be the case then your creditors will normally be happy to accept a large percentage of this equity.

Some people will choose to remortgage their house to release the equity so that they may settle their IVA early. Although this can be a great way to settle, you should be aware that the repayments could be quite high due to your debt history. Therefore make sure that you can definitely meet the repayments and living costs without getting yourself into any further debt.