Any suggestions or help greatly appreciated

[o77]

Hi, I am currently coming up to my 2 year anniversary of a 5 year IVA. the original debt was quite substantial and I struggled to keep it up and an IVA seemed the best option to remove stress and tie everything off in a manageable way. The original proposal of around 43p in the pound was rejected and a revised proposal of 63p in the pound was accepted by me. unfortunately I forgot to take into account the fees charged by the IP which amount to almost £9k. I was recently made redundant and received a cash lump sum and have maintained all of my IVA payments without any hassle. Luckily enough I managed to get another job straight away and was not unemployed at all.

However, my girlfriend is now pregnant and once the little one arrives we will be down to just my salary and I will be unable to maintain the payments under the IVA. we have managed to get some family members to agree to help and it is possible that I can raise a lump sum (plus my contributions already made) to bring a total payment up to the 63p in the pound. However, when I agreed to the proposal of 63p in the pound I forgot to factor in the IP fees and just realised I have to pay these in addition to any settlement........in fact the IP told me that at the original rate of contribution I would have required an additional balloon payment at the end of the term to settle their fees as well! It is just luck that I voluntarily increased my contributions due to a pay rise shortly after the commencment of the IVA.

Anyway, that is the situation at present and I have two questions

1 - If I am settling the IVA early is the IP still entitled to the full amount of their fees or would they be open to negotiation?
2 - Is it best to make a lump sum offer to my creditors directly or does it have to be made through the IP? as I think I may be able to do the negotiations myself and get a reduction on the 63p in the pound! If I can get my creditors to accept around the 50% mark then I can probably afford to pay the fees as well.

FYI - there are only 5 creditors overall and I have worked in credit/debt for the past 10 years so broadly know what I am talking about but even someone like me forgot to read the small print or look into everything properly! But I am well versed in negotiating and think I can possibly do a better job than the IP!

Any suggestions or help would be greatly appreciated!

thanks

[iva.com]

Hello o77,

Welcome to the forum. In answer to your questions:

1) If you conclude your IVA early via 'full & final' settlement you should be able to negotiate reduced IP fees as the supervisory period will be reduced. However, you should discuss this with your IP.

2) I believe that any settlement negotiations would need to be undertaken through your IP as you are already in an IVA. However, if you believe that the creditors will accept a lower dividend then you could point this out to him/her.

Good luck with this and please let us know how you get on.

Kind regards,
Terry Balfour
IVA.com

IVA.com - The IVA Comparison Site
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[Adam Davies]

Hi
Terry is correct,but your f&f must be via your IP
You have a good case for a f&f offer because of your reduced income
Good Luck

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

Hi there

The IP is only entitled to claim for fees he has actually incurred in accordance with the terms of the IVA, so check that out with them but I would have thought there should be a reduction of between £2,000 and £3,000.

The offer of settlement will need to be via your IP, as you are bound under the terms of the voluntary arrangement. I would doubt at this stage that you would achieve a better outcome than your IP to be frank, and the only way out of the IVA would be to default, which I assume you would rather not have on your record.

I am rather alarmed to note that you entered into this IVA without knowing that there was a lump sum to pay at the end. Did your IP give you any advice on this at the time of the original creditors meeting?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[o77]

Hi There Ladies and Gents,

thanks for the replies!

As for your last question Melanie, the original proposal stated a particular payment per month over 5 years and out of the total contributed the creditors would receive their 43p in the pound and the IP fees would be paid.

As I said above, this proposal was rejected (ironically enough by one of the smallest creditors) and the new proposal was put to me in writing of 63p in the pound to the creditors and giving a monthly instalment. Naively on my part, I agreed to this as I could afford it and presumed that the fees would be taken out of these contributions. it is only recently, following receipt of the redundancy money, that I discussed this with the IP with a view to trying to sort out settlement when they mentioned it to me. It was not mentioned on the revised proposal that I signed and I wonder if I could have any comeback against them for not advising me fully?
I did sign it and agree to the terms so presumably there's nothing I can do?
How much detail should I go into with the offer letter to the IP and what should I tell them? They already know the bulk of the story but I don't really want to have to ask my girlfriend to give details of her accounts as it is all of my debt and all occured before I met her. She resents the idea of them poking around her accounts when she's never been in debt and doesn't want to have to justify any spending! It's not that she has lots of savings or anything but its just kept completely seperate Do we have to disclose this info or can we get around it if we are making a simple settlement offer?!

You are right in that I don't want to default on the IVA....especially as it could severely impact my career!

thanks for the comments.....feel a bit more confident now!

[MelanieGiles]

Difficult to claim they have been negligent if you have signed, but this forum is continually littered with tales of people who have not fully understood the implications of what they were signing, and it is our job and duty as IP's to ensure that they do understand.

Just put your offer to them, and see what they say.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp