Please advise not sure which figure to use

[Madge70]

Hello, we have been in an IVA since Sept 2005 and have never defaulted on any payment. In the first 14 months we paid £410 and since then and up to now we pay £470 a month. Actual claims submitted totalled £69471.33 we were told that we would be paying 25p in the £ . Last Sept 06 we received a statement Receipts from us £5330.00 plus interest 5.20 totalling £5335.20 and Payments totalling £4212.88 which include nominee fee of £2967.50 and supervisors fee of £822.50 land registry fee £40.00 stationary and postage £287.88 specific bond £25.00 and registration fee £70.00 . We have worked out that in total we have paid £9508.00 . We are looking into making a full and final settlement in the near future as we may be getting a loan offered to us by my parents in advance of our inheritance. Can you advise us on the amount we offer as we are a little confused on which total to offer. Do we include all fees for example over 60 months we would have paid £26674.00 but 25p in the pound of £69417.33 is £17354.33 . The 1st years fees are £4212.88 if we take that from what we have paid £9508.00 leaves £5295.12 less any fees for this year ( not sure what they are yet ) . Do we knock off any balance after fees off the £26674 or the £17354.33 . Please advise as we will be offering the full amount agreed but not sure which figure to use ..
Kind Regards Madge70

[Adam Davies]

Hi
I,m presuming that you do not have a fourth year equity clause in your IVA.
You need to return to creditors about 17.5k[25p dividend]You need to add on about 5k for IP fees to date plus 1k for a variation meeting[to propose your F+F]So in total you will need to pay in 23.5k.You have paid in 9.5k so you will need to offer a further 14k.
Your IP will be able to give you a figure that they feel is acceptable
Hope this helps
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[Madge70]

Hello, Thank you for getting back to me, yes I think we must have a fourth year equity clause I have just read the the proposals and it says ... The debtors property is to be professionally valued shortly after the fourth year anniversary of the arrangement, the debtor's equitable interest is to be realised and paid to the supervisor before the completion of the arrangement. If necessary the arrangement can be extended to allow an equivalent sum to be paid by way of ongoing contributions for a period of up to twelve months. To protect creditors interest in the property the supervisor is to register a caution at HM Land Registry, if this is not possible the debtor is to sign Land Registry form RX1 and return to supervisor for lodgement at HM Land Registry to effect a restriction on the debtors property... we did sign a form RX but I am not clear what has actually been done. Also we have little if not any equity in the property as First Plus approved a loan way over 100% of the valuation ( in fact they did a drive by valuation which surprised us )so we have been in negative equity for some time and will probably have little at all in 3 years time. Can we still offer an full and final settlement if we have this clause ? Please advise.
Kind Regards Madge70

[catullus]

Yes you can still make a F&F offer.

What you will be offering creditors is a faster method of them getting their money back compared with the remaining 3 years years that it will take you to make contributions and remortgage your house.

In your case this will come from your parents who will be offering money to the creditors CONDITIONAL UPON THEM ACCEPTING THE REVISED OFFER. In other word the money won't have to be put in unless the creditors accept the offer.

If the creditors do accept the offer then the restriction that the Supervisor has put on your home would be removed leaving you free to remortgage if you wanted to, subject to your credit status.

[Madge70]

Hello ... Thank you for that I was getting worried I wouldn't be able to make a F+F with the clause. Do you think it may be advisable to make a slightly increased offer from the original agreed amount just in case the creditors are relying on the equity clause. Also the fees mentioned in andydavie's reply do they include the £4212.88 from the first years fees or is that just for the second year. £5000.00 in total to date in only £787.12 more for this year is that right? Add the £1000.00 for the variation meeting, do I calculate £6000.000 in total on to the £17.5k. So the £23.5k less the £9.5k paid to date is an offer of £14k. Given that all the interest on the First Plus Loan is front loaded and we haven't barely started to pay off the balance borrowed yet we still maybe in negative equity the amount of equity in another 3 years is not likely to be above £10000 ( and do you have to have a certain amount/% of equity before they can make you re-mortgage ) would it be advisable to offer slightly more and what would be a good figure to offer. Also if the first offer is turned down do we have to pay another £1000 variance fee to make an increased offer ?
Please advise.
Kind Regards Madge70

[catullus]

Madge70

I'm getting lost with all those figures!! As Andy said the IP will give you a figure that he recommends you go with.

Forget about what the situation might be in 3 years time. The creditors are more likely to judge your new offer against what the proposal said they could expect at the time that the IVA was approved.

You should only have to pay one variation fee, That will result in a creditors meeting at which your new offer will be considered and, if it was initially rejected, the IP would adjourn and continue negotiations with creditors during the adjournment, At the end of that process you would know whether the creditors would ever accept such an offer and what amount it should be.

[Adam Davies]

Hi Madge
Go with the 14k as you can always negotiate up.
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[Madge70]

Hello Thank you for all your brilliant advice, does anyone have any examples of F+F settlement letters or advice on how to word the letter.
Kind Regards Madge70

[Madge70]

Hello again ... we have submitted a F+FS letter to our IP for £14500 with our mortgage redemption figures and house valuation all which show us in negative equity and likely to still be this way in 3 years time... the IP has agreed to the offer and has called a variation meeting for the end of this month (everything crossed) so on top of payments already made of 10450 to date the total paid would be 24950 26p in the pound which is more than the original agreement of 24600 25p in the pound this amount covers all fees to date ...

my first question is that if we pay another 471.00 before the meeting and the proposal is passed what happens to the extra funds paid to the IP whilst waiting for the meeting ?

my second question is if there 4 main creditors with 17.9 / 44.4 / 31.4 / 6.3 % of the votes who voted originally in favour of the IVA what % percentage of votes is required to pass the proposal for the F+FS ?

Kind Regards Madge70

[Madge70]

just to clarify we have joint IVA and have different % votes on each (not sure how this works) but only one joint loan and then individual debts totalling the whole IVA ... the % in the last post were my husbands and mine are as follows 81.3% debt is the joint one that voted with 31.4% on my husbands also I have 16.3 and 2.4 % all voting in favour of the original IVA
Kind Regards Madge70

[MelanieGiles]

To your first question - ask your IP! If I was acting I would deduct it from the lump sum, but others may have differing views.

To your second question - 75% in each case.

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

[Madge70]

Thank you Melanie for getting back to me so promptly.. can you also tell me what happens if the large % creditor on my IVA votes in favour this gives me 81.3% on mine and 31.4% on my husbands does this mean we need the difference on his to pass the proposal or do they get treated as seperate ?
Kind Regards Madge70

[Adam Davies]

Hi
On the above yours would be agreed and your husbands would if no other creditor voted.He will need 75% of the voes,by value,on the day.
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[Madge70]

Thank you Andy ... lets keep hoping that everything goes ok on the day .. the IP said that they won't usually put F+FS forward for a variation meeting unless they were confident that it will be agreed but to remember that it is the creditors decision not his ... I just hope that they have faith in him and accept.

I will keep you informed
Madge70

[MelanieGiles]

That's good advice!

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