24 month no variation clause

[acsn]

Hi

Has anyone succeeded in overturning the 24 month no variation clause?

I'm 20 months in.

I wondered if it would cost two variation meeting charges, one to challenge the clause and one to agree the reduced monthly payment?

I'm really struggling with my IVA monthly payment of £1000. The last two months I've completely run out of money by the middle of the month and though I don't want the IVA to fail, as bankruptcy isn't an option in my job,I know I can't go on like this as it's really getting to me physically and mentally.

It feels as hopeless now as before the IVA. I even had to miss a family funeral last month as I just couldn't afford to go.

I did wondering though if it would be cheaper all round if I just missed a payment ( it takes three over the life of the IVA for it to fail) to allow me to have some kind of emergency reserve. Variation meetings are charged at £1000 + costs by my IVA company.

[Viki.W]

Hey acsn, sorry you're struggling. Have you tried asking your IP to reduce the payments without a variation meeting? I know that in some of the new IVAs your IP can reduce the amount by up to 15% without a need to contact creditors and any arrears can be tagged on the end. Speak to them, see what they say. You shouldn't be missing something as important as a family funeral because of this, that's awful. Good luck. X

[MelanieGiles]

I would put forward a proposed variation to modify both issues at the same time if I were acting for you, and you had that silly modification relating to no variations for the first 24 months.

[Cybus]

I would also consider asking them to reduce the fee that they are proposing to charge for a variation meeting. To me £1,000 seems an outrageous amount. I bet that is not the standard charge for a variation meeting and the costs have been artificially inflated because of the high level of your contributions. It's not detrimental to you having such a high fee charged but it is for your creditors.

[acsn]

Thanks for responses.

I've now checked and the IVA company say they have no authority to reduce the monthly payment without calling a creditors meeting, which could take months to organise.

I have also been reminded to carefully consider the implications of attemping to reduce my monthly contribution. I have a 40p in the £ minimum return clause and it seems any attempt to reduce below this would trigger the immediate default of my IVA.

I could not cope with starting all over again.

It is so annoying, my creditors only get a 10p dividend at the end of the third year and the remainder after completion. The IVA company already have enough to pay the first dividend, their fees for the entire IVA and more.

But after talking to them I suspect this would all be lost in fees and disbursements if I tried to change anything.

Happy Days.

[Cybus]

Thanks for responses.

I've now checked and the IVA company say they have no authority to reduce the monthly payment without calling a creditors meeting, which could take months to organise.

I have also been reminded to carefully consider the implications of attemping to reduce my monthly contribution. I have a 40p in the £ minimum return clause and it seems any attempt to reduce below this would trigger the immediate default of my IVA.

I could not cope with starting all over again.

It is so annoying, my creditors only get a 10p dividend at the end of the third year and the remainder after completion. The IVA company already have enough to pay the first dividend, their fees for the entire IVA and more.

But after talking to them I suspect this would all be lost in fees and disbursements if I tried to change anything.

Happy Days.

What garbage ... not your post, but your IP's response. Did you speak to the IP or little Miss / Mr Workshy who sits pushing buttons whilst not understanding what they are doing? I'm sorry but this is the second workshy I've come across this week on here

I am sure you fully understand that creditors have modified your proposal to require a minimum dividend of 40p in the £ and I am sure you will have considered that at the original creditors meeting. You are attempting to avoid default by advising creditors of your position and it sounds to me that the IP is attempting to deny you of that right. You want to do something about it and you should not be made to feel that slipping below the minimum dividend requirement is an automatic default. You've got options.

Would you know if your IP's fees have been fixed by creditors or capped? You can check that by viewing the chairman's report from the original meeting.

Contrary to what you are being told, creditors do acknowledge that peoples circumstances change. The 'no variation in first 24 months' modification was a ridiculous one to put forward. That said it was almost two years ago that it was put forward and I do not believe it can be considered a proper modification under the IVA protocol.

But your IVA will not be a protocol one.

Would you know if your IVA proposal had the R3 Standard Terms and Conditions appended?

If so, refer Little Miss / Mr Workshy to Paragraph 60(2)and (3) of those conditions, which I reproduce here ...

60(2) [Power to requisition a Meeting] If requested in writing by the Debtor, or by creditors with not less than one-quarter in value of the total amount of debts subject to the arrangement, the Supervisor shall, unless relieved by the Court from so doing, convene a meeting of creditors within 21 days from the receipt of such request.

60(3) [Content of notice requisitioning meeting] A notice served upon the Supervisor under Sub paragraph (2) shall state the purpose for which the meeting is to be held.

You need to sit down and work through your income and expenditure and determine what you can realistically afford to repay each month. Once you have done this, provide that information to your Supervisor. If they are going to charge a grand to convene a variation meeting then you are sure as heck going to make them do something for it. Make them assess what the outcome of the arrangement will be with those reduced contributions. Would you be willing to extend the term of the arrangement by twelve months? If so make them work out what the estimated outcome would be in that scenario.

I would suggest that you request the Supervisor convene a meeting of creditors to consider a variation to your proposals with the following resolutions-

1. That the modification prohibiting a variation to the terms of the arrangement in the first 24 months be removed. AND

2. That the debtors be allowed to make reduced contributions of £XX per month for the remaining duration of the arrangement, increasing where reviews allow.

or alternatively-

2. That the debtors be allowed to make reduced contributions of £XX per month for the remaining duration of the arrangement. AND

3. The term of the arrangement be extended by 12 months to compensate for the lower return.

Once you put that request in to them, they have to forward it to creditors within 21 days ... so you can also rubbish the statement that 'it could take months to organise'

I'd like an IP's input here please ...

If the proposal states that the cost of a variation meeting shall be £1,000, but the creditors restricted or capped fees, is there a requirement to pass a resolution to take that fee charged for variation if by charging it, the IP is going to exceed the capped fee??? I believe the answer to that is a yes.

If a resolution has to be passed, it may explain the reluctance to convene a meeting given that the figure is unrealistic and causes creditors to suffer at the greed of an opportunisitc IP who saw a high level of contribution and so inflated the cost of any potential variation meeting.

[2012]

What a response C...like a silver bullet ripping yarns.....

[Soulgrowth]

You're not so bad yourself 2012 [;)] Bye the way ... that's my birthday!

Debbie

[acsn]

Thank you C.

The standard fees were capped at £8500 (£3k for the proposal, £5.5 for running it) but allowed for charges of up to a maximum of 30% of the total collected over the life of the arrangement if additional work was required - thereby allowing the IP company to potentially claim a much higher fee if either the creditors or I requested extra work.

The standard fee does not cover any variation work by my IP but only the companies management of the collection, reporting and final closing process.

If I require more work by the IP their fee alone is billed at £375 per hour with £125 an hour for admin. I suspect reviewing an amended I&E, agreeing a new payment plan and drawing up a variation report will take time and generate considerable cost in itself. All reducing the potential dividend to creditors further.

I'm alreay paying over 66 months to avoid an equity clause so wouldn't really want to extend further. I'm now in negative equity anyway. I do fear that if a reduction in monthly contribution was proposed I would find the IVA extended to six years and a charge, just in case the market improves, placed at the land registry. Amex and Capital One have held on to the debt and we all know how mean they can get with bad payers.

I have checked both the IVA proposal, the Chairman's report and the varaitions and they do not appear to include any R3 standard terms and conditions.

I certainly got the impression from the OK person I spoke with that the three months mentioned prior to the creditors meeting would be taken up with correspondence, reviewing my circumstances, drafting and agreeing a variation report and then calling the meeting. It did after all take five months to get the first propsal on the table.

I suppose like everything in life you get nowt for nowt.

Sorry but after careful consideration I've decided I'm just going to miss a payment and take it from there. Don't know why but it makes me feel I've go a bit of ownership of my life back. I appreciate the forum cannot condone such chavalier behaviour but it just seems easier.

[MelanieGiles]

Right - with regard to fees, as a practicing IP it does take more time to call a variation meeting and therefore why should we not be paid for that extra work. IP fees are being chopped drastically at the moment - and personally I am fed up of people having a pop at them. Try running an IP practice, and paying all of the costs of paying specialist staff and overheads, and then pass comment if you feel able.

Now with regard to your variation, you are entitled to put forward whatever offer you like and your IP should not knock this.

[acsn]

Sorry it was never my intention to annoy anyone.
I'll leave you guys alone.

[plasticdaft]

Perhaps the more Ip's fee's are chopped the more cowboys the industry shall be rid of,no??

Without knowing the industry in and out,a lot of people will see Ip's who do very little for their money Mel,either due to their uncontactability,poor office staff etc. You must remember that not all companies offering IVA's are as well run as your own.

[Cybus]

Right - with regard to fees, as a practicing IP it does take more time to call a variation meeting and therefore why should we not be paid for that extra work. IP fees are being chopped drastically at the moment - and personally I am fed up of people having a pop at them. Try running an IP practice, and paying all of the costs of paying specialist staff and overheads, and then pass comment if you feel able.

Now with regard to your variation, you are entitled to put forward whatever offer you like and your IP should not knock this.

I felt from the opening post that acsn was being fobbed off with excuses not to convene a variation meeting, by 'Considering the implications of attemping to reduce my monthly contribution' and 'any attempt to reduce below this would trigger the immediate default'.

Creditors do acknowledge that peoples circumstances may change and I feel sure that in the current climate they will have no objection to the removal of the 'no variation in 24 months' modification if they feel that the offer being made to them is the best.

I make the statement of fees for convening such a meeting as being 'Outrageous' because it is double any amount I have seen quoted before for carrying out such a task. No offence was intended and I have no desire to cause a fall out.

My particular bone with this is the reluctance of the service provider to help the customer. His / her circumstances have obviously changed and they have asked for help not excuses.