IVA secret 4: Make sure you have fully considered the “Full and Final Settlement” or “Lump Sum” IVA

by admin on 3 December 2007


Let me tell you; if you really want to do an IVA and not go bankrupt then a “Full and final settlement” IVA is better. Being in debt to a friend or family member is far better than being exposed to the stringent rules that govern a repayment IVA. In a repayment IVA you could suffer the punitive measures that apply in the case of IVA failure – which can occur if you miss 3 months payments. In a repayment IVA you could be paying monthly for 2 years and then not be able to afford an IVA and end up bankrupt anyway. All that money you paid would be then “lost”. Also in a full and final settlement IVA you can get better terms, usually a lower settlement and the IVA is completed in a matter of weeks not five years unlike a repayment IVA.

However all of this is subject to your creditors accepting your proposal for a full and final settlement. Your creditors will compare the lump sum they will get with the full and final settlement IVA against how much they would get if you paid into the IVA monthly for the five year period. If they can get a lot more out of you in the repayment IVA they will insist you do that.

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