Lump Sum Payment IVA IVA Information 22/08/2018 Start an IVA Monthly payments are not always required to start an IVA. A lump sum payment may be an option if the cash can be made available.What is a Lump Sum Payment IVA?How much cash is required?Where could the Lump Sum come from?Are additional monthly payments ever required? Want help to start an IVA?Give us a call: 0800 011 4712 or complete the form below to speak to one of our experts What is a Lump Sum Payment IVA?A Lump Sum Payment IVA involves paying a single cash lump sum rather than making monthly payments over 5-6 years. It is also commonly known as a Full and Final Settlement IVA.Once the Arrangement is accepted there is immediate protection from the creditors. After the lump sum is handed over the IVA is completed and remaining debt written off. The lump sum does not have to be paid immediately. An agreement can be made for it to happen at any time after the Arrangement is in place. As such this could be months after acceptance if the payment relies on equity release or a property sale. A Lump Sum Payment IVA is ideal if you cannot afford to make ongoing monthly payments. However it can also be used where monthly payments could be paid but a third party offers the lump sum instead. How much cash is required for a Lump Sum Payment IVA? The amount of cash required to carry out a lump sum payment IVA will depend on your circumstances. If you have no assets and cannot afford to make payments towards your debt it could be relatively low.Depending on the amount of debt outstanding it may be possible to offer as little as 10% of the total owed. Creditors will accept such a low sum if it is better than they would expect to get if you went bankrupt.The amount that will be acceptable to your creditors will increase if you have other assets such as a property with equity.A lump sum payment IVA is often a better solution than trying to negotiate settlements with each creditor yourself. It is likely to be agreed for a smaller amount overall and involves far less work for you.Where could the lump sum come from?There are a number of possibilities for finding the cash required to achieve a lump sum payment IVA. One option is that you may know someone who is willing to make the money available for you.You could use a windfall that you have recently received such as an inheritance payment or redundancy money if you have recently lost your job. You may not have to offer the entire sum you have received.If you are a home owner you may be able to re-mortgage your property to raise a lump sum. However if you decide to do this it is important that the ongoing mortgage payments you are left with are affordable.If you borrow money from a family member or friend or any other source you are allowed to start paying them back as soon as your IVA is completed.Are monthly payments ever required after a Lump Sum Payment IVA?Once a Lump Sum Payment IVA is agreed it would be unusual to make any further monthly payments towards your debts. However there are certain circumstances where these are still required.If you have disposable income which you can afford to pay into your IVA you may have to do this until the agreed lump sum is made available. This is particularly common if this is going to take a number of months.If the lump sum is being borrowed from a third party or coming from equity release once it is paid your monthly payments would also stop. From then on you will need these funds to start repaying the lump sum.If you receive a redundancy payment but then get a new job immediately and have surplus income your creditors are unlikely to agree to a lump sum payment IVA. In these circumstances they will usually demand the lump sum and ongoing monthly payments.