www.iva.co.uk

I am coming to the end of an IVA, but my IP is saying that some of the creditors have not yet put in a claim, and that the repayment period might have to be extended. How long do I have to wait for a creditor to put in a claim, and can the payment period be extended? I have NOT defaulted in amy payments during the period.

In my opinion, the IP cannot simply extend the payment period just because some creditors have not submitted claims. You have complied with your obligations.

What the IP should do is write to any creditor who has not submitted a claim giving them a 3 week deadline to submit their claim otherwise they will lose their right to a dividend permanently.

I am a bit surprised that this is happening at the end of the IVA. Every year that there has been a dividend declared the IP will have come across the same problem, surely by now the creditors should all have submitted claims.

Philip Beck

Licensed Insolvency Practitioner and IVA specialist

Hi
This is simply not acceptable,you have conducted your IVA as oper the agreement and should not have the uncertainty of "maybe" having to extend it.
Go back to your IP and state that you are unhappy with his/her reply and would like the matter concluded.
Ask for the response in writing

Regards

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

Creditors will be notified of the intention to pay a dividend and will be asked to show proof of the debt, normally 21/28 days.

If they do not submit the should be excluded from the dividend.

Dave Beech

I wrote to them asking when it will be concluded in November last year, they have only just answered.

In there reply they say:- 'Your IVA was approved, subject to a minimum dividend of 24p in the £ on 2nd July 2003. The terms of your arrangement was estimated at 60 months therefore the estimated conclusion date would be 2 June 2008, I have noted that payments were made prior to your meeting being approved and as such this brings the estimated conclusion date to 2nd April 2008.

As a result of the increased creditor claims, I estimate that there will be a potential shortfall of £1807.92 to achieve the 24p in the £ repayment by the conclusion of the arrangement. The duration of your arrangement may be increased so that the minimum dividend is finally achieved'

How can the amount suddenly be increased? I thought that it was fixed at the creditors meeting, and that once the amount was fixed that was it? Could they have added interest?

James

james1 -

It must be very disappointing to be told that just as you thought things were coming to an end. I have a Minimum Dividend modification so find your experience very interesting. Thanks for sharing that.

The Minimum Dividend requirement is perfectly fair - but surely it would be preferable to be made aware during the first 2 or 3 years of the exact amount required to meet it - people would then know exactly where they stand and just how much is required in additional payments to reach a satisfactory conclusion.

From the start of the IVA to the end your Voluntary Payments have never changed, up or down?

Dave Beech

The letter goes on to say:- ' I must point out that at present we are still waiting for 5 of your creditors to submit their final claims for monies owed by you to them. In the circumstance that they were to submit an increased claim, and then the monies required to meet the terms of your voluntary arrangement will correspondingly increase and further increase the duration of your arrangement.'

With what has been said above I am in the process of writing to the IP, oh by the way it is Debt Free Direct, and state to DFD that I expect DFD to write to the so called 5 creditors who have not submitted their final claims, and inform DFD that they are to give them 3 weeks to reply, if they don't then that is the end of any claim that they have against me.

James.

The payments went up by £50 after 6 months, but apart from that they have stayed exactly the same.

I have had no end of problems with this firm, and I had to resort to sending a fax every hour on the hour before I got them to start answering me. I did warn them that I would do that unless they replied. It took a while but they got the message!

They also misrepresented me in the court papers and I have told them that I am seriously considering reporting them to whoever contols them.

James.

James.

How were you misrepresented?

Dave Beech

The information that they gave to the court, and in the papers was not correct. When they sent the papers to me to read, I made a number of corrections and pointed out the errors, some were changed but others were not.

For example the debt was in fact not mine direct but my wife, who died and I had tried to sort out her credit cards etc.

From what you had posted this looks more like a divedend issue rather than proof of debt.

When your IVA was completed was there a modification by a creditor stating that the min dividend must be 24% or the IVA would be deamed to have failed

Dave Beech

I agree about the dividends issue. The point about the proof of the debt was lost when it went to court and which court fees built up and caused such a large debt in the end. I was always under the impression that debts died with a person, but the courts said no.

So yes it is about the dividend. All it says on the Modifications sheets is:-

1. Creditors are to receive a minimum dividend of 24%.

Nothing about it having deamed to fail if that isn't reached or anything like that.

With regards to the time span. In clause 8 it says:-

Contributions will be made for a period of 60 months. The duration of the arrangement may be extended at the Supervisor's discretion in order to complete any final administration but creditors must receive final dividend payments within 63 months of approval unless there are payments in lieu of equity still to be introduced.

I am not a number I am a free man

There is a provision for bankruptcy of a deceased person if there are no assets in the estate


Dave Beech

I wish I had been informed about that years ago, but too late now sadly.

I am not a number I am a free man