do earnestly hope if you can help

[ray_a]

My wife and I are in an IVA and after a lot of difficulties we decided to sell our home and make a 100% payment to our creditors and the supervisor fee. We decided to do this in November 2006. We requested the settlement figure from our supervisor and was informed that it would be £60,000 and this would meet the requirement for the house to be sold. In April this year we were told it would be £57,500. Last Friday we were told that he had not included the statutory interest payment because we had excess funds due to there being a clause which gave him the power. this means we will have to pay a further approx £10,000. This will leave us with only £16,000 which we will have to pay £8,000 for the property we are renting as deposit. The result is that we are back to square one with our finances. We were planning to rent for 6 years and then find a small place outside the South East to retire to and we were planning to keep our capital intact.

Our supervisor thinks the whole thing as a joke when I explained to him what his proposed charge would do to us. He even suggested that as a"punt" I pay him £600.00 to try and vary the IVA. Later he was rude to my solicitor who is carrying out the conveyance and told him that he will decide when he will provide the settlement figure. After a long argument I managed to get a calculation of his interest figure. I have spoken to an accountant friend of mine who thinks this clause is poorly worded and provides no basis for the calculation. He also thinks that we should have been advised of this when it was being drawn up. He did not go through the agreement either explaining what was the consequences. In saying that I do work in the financial industry but my wife doesn't.

I have been advised to refer this matter to the ICAEW who is his regulatory body especially from the solicitor. The solicitor is worried about the fact that we might lose the sale and what this will do to our mortgage lender, our creditors, and to ourselves.Infact today I told him that I will be doing this as they did not respond to my e mails. Is this a good idea?

Secondly does anyone know whether he has the right to make this claim against our estate when we are paying 100% to our creditors?

If so is there any way we can reduce this charge as we were not told about this at the outset. The modification from creditors refers to any new assets that come after we entered the IVA but given that we had the house in the first place that was an asset that we had.

Can our supervisor go for us afterwards to make us bankrupt as I no longer have any confidence in him and infact the relationship has broken down?

My wife and I are devasted by this and it has affected my work, my wife has gone into another bout of depression, and it is affecting my son with his A level studies. Can I do anything for the damage he has done?

Sorry this is a long message but only just found this site this evening and do earnestly hope if you can help.

Thank you for your time.

Ray

[aguise]

Hi Ray
I just wanted to say hello and welcome to the forum. I cant answer your question but I am sure Melanie or someone with more understanding of the mortgage side will be along soon.
We have all been on the low side at some point try not to let it get you or your wife down, easy to say but health and family are more important than anything else.

Ang

[chris_]

Hi Ray,

Melanie or one of the other experts will be able to shed more light on this for you, but in the meantime it would be helpful if you could post some more details for them to consider.

- Does your IVA contain an equity release clause for your home, or was the home kept completely outside of your IVA ?

- How long have you been in your IVA, and how much were your creditors going to get back ?

A variation meeting is a possible option as creditors would have to seriously think about getting their hands on their money now rather than later, but it all comes down to the pros and cons to them.

Remember that it is your IP's responsibility to maximise the return for the creditors and that this has to be taken into consideration.

Finally, do not panic - it sounds to me that you have the makings of a full and final settlement here and at the end of the day it is your creditors who would make the decision - not your IP. The issue of interest on excess funds if you are offering 100% in a full and final settlement is intriguing as who would get the money - it is actually yours if everyone else gets paid.

Just a theory - when you say you are making a 100% settlement, does that cover the IP's fees as well.

[MelanieGiles]

Hi Ray

I shall caveat my reply firstly on the basis that I do not have the full facts of your case in front of me, and that I am just one of the forum experst. Others may have differing views.

However, and based upon the information you have supplied, it appears that there is a dispute over whether statutory interest is payable or not - and that your own solicitor has intimated that the clause may be unenforcable.

Firstly, I would not run the risk of losing your buyer, if you have plans to move into rented accomodation. Your dispute with your IP relates to money and not the asset, therefore you could sell the property and agree to put the disputed sum of the sale proceeds into a separate account - or ask your solicitor to keep them in a client account - pending this matter being resolved. This ought to satisfy your Supervisor.

Once the issue over the statutory interest clause is resolved, and if this goes against you, then you could ask the Supervisor to call a variation meeting of creditors to see if they are prepared to waive their right to receive the interest - and I think that you have a good chance of achieving this given the circumstances you have described. The supervisor will incur additional costs in preparing an appropriate report, and of course will want those to be paid.

Personally I would not threaten a report to his regulatory body - as I am not sure what grounds you have and this is not likely to assist with an attempt at amicable settlement. Why not try and arrange a face to face meeting with the IP to see if you can resolve things on an amicable basis. I am sure that you will get the result you are looking for, and don't forget to keep posting with your news.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ray_a]

Hi

Firstly a big thank you for allowing me to join you!

Secondly, another big thank you for your support it is greatly appreciated.

Many thanks Melanie for your advice and it does help for someone who is outside the situation to put this into perspective. I have spoken to my Wife and we will back off from a report although for reasons which we will share later we might have to reconsider. Although the way I feel a meeting at this juncture would be a good idea as feelings are very strong at this moment.

Just to fill you in the clause our supervisor is claiming reads:-

"In the event that it appears to the Supervisor that there are sufficient funds to make payment in full of the debtor's debts, together with statutory interest at the prevailing rate, and the fees and associated costs of the Arrangement, he shall do so expeditiously and in the conclusion of the Arrangement"

Hope that helps in seeing what he is claiming for.

What I don't understand is why did he not bring this up when calculating the final settlement in November 2006 and April of this year?

Also Melanie is there a recognised formula you use and is there any legislation or case law that can be used as a source.

Please don't get me wrong if I have to pay it then I will have to do so but I see very little guidance on this whole area.

Once again a big thank you

[MelanieGiles]

Hi again Ray - you are most welcome here on the site, as all of us are just eager participants and you would be amazed at how much I actually learn from all of the other experts each day!

I think that the key thing here is, as Chris highlighted in his earlier post - was the property included in the IVA in the first place, and were you required to release equity at some stage in the future? If this answer to this is yes, the I feel that you are caught under the clause to pay statutory interest - but that does not mean that it can't be varied as a result of your current circumstances. If your property was not included, then you do not have to inject any money from the sale into the IVA - albeit you may want to to offer a final settlement. In which case I cannot see that statutory interest applies.

Statutory interest runs at 8% per annum from the date your IVA was accepted, and comes from Section 17 of the Judgments Act 1838.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ray_a]

Oh Dear!!!!!

Basically there was an equity clause and so it looks as though we have lost.

Many thanks for the source I haven't heard about the Judgements Act 1838!

As regards the variation I was told it would cost £600 and there was little chance of the creditors agreeing to it.

Not sure we should risk £600 on a lost cause.

But many thanks for your help Melanie I have appreciated the honesty of your advice.

[ray_a]

Further thought would I have a better chance if we offered say £3,000 to £5,000 of the variation at least we would be able to keep 75% unlike 50% which would happen if we don't go for the variation.

Can I organise my own variation meeting as I do not really want my supervisor to do this as I have lost complete confidence in him.

[Adam Davies]

Hi Ray a
Any variation must go through your IP I,m afraid.
regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[ray_a]

Thanks Andy
Can I though write what I want to say to my creditors rather than using him to write it for me. At least i know what I want to say rather than using a third party?

[MelanieGiles]

Hi again

It is your Supervisor's report - so he will want to word it in the way he feels it is best written - but feel sure that he will include all of the points you wish to be raised. Ask him for sight of a draft report before he issues it to creditors.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ray_a]

Well let's see what happens today!

I have written to my supervisor agreeing that his requested amount is placed in a clients account at a solicitor.

I am working on a variation and I will make a monetary offer to try and reduce this statutory interest figure.

Let's see what happens!

[ray_a]

Just a further thought!

I take it that to vary an IVA requires a meeting with our creditors.

Obviously we shall make a proposal to the meeting.

If either side requires time to consider or make amendments to the proposed variation can an adjournment be allowed?

This occured twice when our IVA was being originally proposed,

Many Thanks

Ray

[MelanieGiles]

Hi Ray

Yes you can also have an adjournment for up to 14 days in an IVA as well.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ray_a]

Hi Melanie

Many thanks for that and you are a STAR!!!!

Regards

Ray