suddenly been asked to provide visual proof

[MelanieGiles]

The issue here is the degree with which an IP can request financial details post-IVA and there is no right or wrong answer as it really depends upon your own IP's judgement.

I do not ask to see bank statements on an ongoing basis, but I do ask for evidence or explanation of any area of expenditure which has increased by more than 10% - this is reasonable in my view, and balances the need for the debtor to be in control of their finances whilst creditors get a fair return. I always ask to see current wage-slips.

Ian and I therefore have a differing approach, which suits our own needs for reporting and monitoring purposes - and I am sure that both work for us in our respective practices - and so long as clients are made aware of the nature of the review process then this does not cause confusion.

I have rarely ever found a client has been untruthful to me about their expenditure, but this probably is derived from the fact that we build relationships with our clients and there is a mutual ongong trust. In larger practices the IP may never meet or speak to his/her client, so they probably need a more regimented regime of ongoing review and monitoring.

[Lisa2009]

For the 3 years hubby was in his IVA, he had to annualy produce bank statements (mine too and IVA was only in his name), council tax bill, insurance bills, copys of tax credit award notice and proof an any bills that had increased.
We didnt have a problem with it.

All said and done, we would have still been in a financial mess if it wasnt for hubby's IP so i would have happily sent him a kidney.

Its only an invasion of privacy if theres something to hide (my opinion)

You are so close to the end now so personally i would just smile, nod and send them off.

[Beans on Toast]

I would not have a problem with showing anything to my IP. The underlying issue I sense from some of the posts, is that to try and give ourselves more disposable income, we will naturally seek out better deals for insurance, utility bills and so on.
By doing this, it will obviously affect our I & E. If this would then be taken into account, what would be the point of changing in the first place? Please correct me if I am missing the point here, but if we can't try and make it easier for our selves, how are we supposed to build up any form of contingency fund. At the moment this is our main goal, and I don't want my family to go unclothed and unfed to achieve this during these early days of our IVA.
Any advice here would be greatly appreciated.

[MelanieGiles]

It's all down to the relationship you have with your IP Beans to be frank. I hold the view that if you are prepared to shop around to find cheaper utilities etc, or spend less at Tescos then you should have the benefit, which is why I have a rather relaxed view to annual reviews of expenditure unless they show material differences - but other IPs have differing views.

There is an argument that says that as IPs are acting in the creditors best interests then they should squeeze every penny out of their clients, and therefore by scrutinising bank statements they will find where the money is being spent - or not being spent as the case may be!

I do not necessarily buy in to all of that view to be honest - I have a post-IVA failure rate of less than 5%, have a significant IVA portfolio and rarely return a dividend lower than was originally pledged to creditors. So if in achieving results like that, whilst allowing my clients to run their budgets within reason, I know that creditors trust me to do my job.

It's all about trust at the end of the day.

[Beans on Toast]

Thanks Melanie, that's interesting to know.

[ianmillington]

I think the IPs role is very neatly summed up in the R3 booklet that we distribute to everyone - "honest broker". We have responsibilities to both sides. If we are seen to side to closely with one, we alienate the other. By maintaining our independence and doing the due diligence from the start, we earn the creditors trust in the proposals we draft and much of what we put in them will be accepted as truthful. There is a benefit to all sides in that, including the proposer.

Can I just say that the level of due diligence to which I have referred is that which would be applied at the start, in order to create the proposal. Once the IVA is running smoothly, there are arguably grounds for the annual reviews not to be quite so intense. Interestingly though, the new climate is one in which contribution increases will be based upon net disposable income, rather than the somewhat draconian terms hitherto imposed by some creditors. As a result, credit is given for increases in costs of living. Further, current provisions now give the Supervisor to agree, without a variation, a decrease in contributions of up to 15%, but it must be capable of justification. Before everyone gets excited typically that will only apply to proposals agreed this year. The new situation would suggest that in future the review will need to be a somewhat more holistic approach, rather than simply looking at your payslips and asking for 50% of the increase.

So far as Keith is concerned, there has clearly been a change in procedures - possibly recommendations following a regulatory visit?

Ian

[Emily]

It is great having the IP experts view on this subject and I for one is not seeing ghost where none exist or having double vision.

Creditors need to be mindful that their returns from any loses incl IVA will be slashed due to rabid market fundenmentals that they have contributed to - 'fanacial instruments' thought to be invented by the brainest of the Bankers better at designing rockets and all for raising cheap capital from all of us. The Guardian reveals and I kept the copy to frame up -US Banks incl UK Banks like RBS, HSBC,HBOS and some smaller building societies have between themselves responsible for 1000 billion dollars(500 billion in sterling) of lending to people who can't afford to pay back - which they had tried successfully till now to shift as 'toxic' investment to other investors who wants no more to do with it. The so called rating agencies were paid to set up and 'go with' the business model and didn't catalogue the risk property until people got burnt by them and then the ratings on these investments became 'worthless'

They Banks have now lost 50% of that in market value in 2008 and have wrote of over 126 billion dollars in real money, maybe your IVA is sold off and in there somewhere? It will be easier to found lost baggage in the Terminal 5 debacle to comprehend this mess.

The keenest experts incl big investors have said the Banks made monumental mistakes in their 'statistical models of risk' as the persue of profits became a regular fix and doing away with plain and simple human judgements. Why we now have a new revised Banking code to demand Banks help debtors -this will put the brakes on their activities -no more automated increase in your credit by a computer

If the Banks just admit their errors{I doubt} and show some humility as those have here over their own expenditure 'mistakes' and that they are not the Master of the Universe we can all get back to a better relationship with them on a level playing field. All the economist have openly berated their opaque activities

[pm5]

Well when your extra expenditure towers above the increase of salary, surely they cannot expect 50% of any wage increase !

[MelanieGiles]

That would certainly be unfair, and common sense ought to prevail.

[ianmillington]

Unfortunately that doesn't always happen. If the proposal has a silly modification to the review clause the Supervisor might not have any discretion and both he and the debtor are caught between a rock and a hard place.

Common sense in those circumstances probably dictates looking at a variation to modernise the provision

Ian

[MelanieGiles]

Or a supervisor who is prepared to have a good argument with a regulator if challenged Ian!

If we did this every time we ran into an issue involving a creditors modification, we would be varying most IVAs to our hearts content. I personally highlight minor issues like this in my annual reports to creditors, giving any dissenting creditor the opportunity to object to my chosen strategy and confirming that upon request I will call a variation meeting within the following 28 days. Never once been invited to do so - and gone through two JIMUs on this basis.

[ianmillington]

I expect I actually enjoy a privileged position Melanie in that, because my present firm is so young, my oldest case is less than 6 months old, so I don't have many with those draconian provisions in them.

Your strategy is an interesting one.