50/50 clause

[Hovish]

Hi,

Is anybody else out there with Grant Thorton for their IVA, and have you had a review yet. I am really confused about 50/50 clause if you get a bonus of pay rise etc. I remember seeing somewhere when I first contacted Grant Thornton for an IVa that stated any pay rise, bonus would have to be split 50/50 with the IVA. I have read my proposal/ chairmans report over and over, and nowhere in there does it state anywhere that this is the case. Is it general practice that it has to be handed over or do some companies not have this clause, because in that case then any extra income we will save and hopefully be able to offer a full and final within the next couple of years. Any advice please thanks [:)]

[ianmillington]

Hi Hovish

I've not seen a GT proposal myself but as it's an obligation they impose on VA proposals drafted by others by way of modification, I'd expect it to be in there somewhere.

The current modification is:

"5. Annual Review of Income and Expenditure
A full review of income and expenditure will be undertaken annually. This must include a copy of the Debtor's latest P60 together with payslips for the 3 months immediately prior to the review. Where net income has increased (including routine overtime) the Debtor shall increase monthly contributions by 50% of the net surplus (after taking into account costs of living). The level of contribution into the Arrangement (and any arrearage calculation thereof) will commence from the date of the review."

The good news is that GT take into account any increases in costs of living before calculating the 50% although that does not rule out one of your creditors taking a less charitable view. Check the Chairmans Report with a toothcomb.

If neither the Proposal nor Chairmans Report refer to the 50% then it's not set in stone and is within the discretion of the Supervisor.

Regards

Ian

[Hovish]

thanks for your advice I will check again with a fine toothcomb but I am quite sure it is not mentioned.

[cr15py]

Again, I don't know about GT, but I know my proposal states that I have to give over 50% of anything over and above 10% of my net pay.

[Hovish]

I have checked it again, and it definately does not mention it, all it says is that if we receive any kind of windfall then it has to be handed over. Anyway We are not silly enough to think that we would not get away with not having to pay anything, so we will put it in a savings account (make a bit of interest) and wait for our annual review. At the end of the day it will be paid into the IVA anyway.

[ianmillington]

From what you say it would appear that there is a fair degree of flexibility for you then, as increases will be as agreed between you and the Supervisor. You will be free to argue your case, which will come in useful given what is happening in the energy market.

My only worry here is your awareness of a 50/50 split[:)]. Thinking outside the box, could it be that the reference to the 50% was something that GTs advised you might happen, but ultimately it did not?

[louisa.s]

Hi there,
We are with GT and we have to give 50% of my partners bonus to them and we do this on a monthly basis when he makes bonus.

As to payrises, if they are significant (ie above the standard 3% or so), then it is best to inform them as you will probably have to contribute 50% of increased monthly wage to them until your next annual review.

otherwise standard pay rises are dealt with at your annual review as don't forget you have to sometimes take into account increased living costs.

Hope that helps

[MelanieGiles]

If there is no 50% uplift provision in your proposal, any increased payments will be dicussed between yourself and your IP. To be frank, without any provision, you are likely to be asked to pay over whatever surplus income you have remaining, after provision for increased expenditure you have incurred during the year. These issues are usually resolved by negotiation between IP and client at the annual review stage.

[Hovish]

Hi thanks for your replys,

Although hubby got a payrise of 1036 per annum which equates to 86.00 per month, he actually only got an extra 38.00 as this takes him into the next tax bracket, so this is not really a significant amount of money extra

[Hull_Tiger]

Hi,
I have read this with interest as I have been having the same discussion in another thread.
My agreement has no 50/50 provision or similar, just as yours, and my IP is insisting I pay 100% of my extra income into the IVA, as Melanie suggested. They have left no room for negotiation other then increased expenses which I think I will have to prove.

[ianmillington]

Could you tell me what the review clause (either in the proposal or any creditor modification) says? The whole basis of an IVA is to create a win/win situation, not to provide the Supervisor with a stick to beat you over the head with! If I know what it says, then I can probably let you have some meaningful comment.

Ian

[Hull_Tiger]

I dont know the exact wording of mine, as I'm at work, but I'm sure it reads very similar to what you stated above except it states "Debtor shall increase monthly contributions as reasonably requested by the Supervisor".
I shall check when I get home.

[Hovish]

Hi,

My proposal does not even mention a review so I have no idea when it is, I assume on an annual basis, reading everyone elses comments. We started our payments in November 2007, so I would assume we wait to her from Grant Thornton. Modifications state. Payments must be maintained. If in arrears more than 3 months this is a breach. If any information is found to be false at a later date breach. Have three months to remedy breach. Contributions must be made for 60 months unless an early conclusion is agreed by creditors. contribuitons can not be lowered by more than 15%. Any windfall has to be handed over. Any variation meetings not less than 28 days notice must be given. should debtor die any property of life policies have to be paid into arrangement. these are all of my modifications (basically not stated whole paragraph.) Under this it states in general the aim of the arrangement is to maximise the return to creditors whilst ensuring you have adequate funds to provide for living expenses.

Paula

[ianmillington]

If the proposal does not provide for a review, then your contributions are fixed for the 60 months, period. The Supervisor has no right to review it - his powers are limited to the proposal and any modifications. Having said that I am extremely surprised to see that an August body such as GT have issued a proposal containing no review provisions. It may simply be a typo. Maybe simply because of GTs reputation the creditors haven't bothered to look at it either.

The only other place I would think of looking is in the Standard Terms (if separate from the proposal) but I would imagine they would use the R3 ones which to my knowledge won't cover it either.

I would make an appointment with a local IP or Solicitor to have the paperwork given the once-over. You need to know where you stand.

[Hovish]

Hi,
thanks for your replys, I am just reading through the standard terms and conditions which states:

Assets

2.2 All income contributions and asset realisations under the terms of the voluntary arrangement will be applied in enhancing the distributions of funds to the creditors in the due order of priority as set out in the Insolvency Act 1986.

Duration of arrangement

4.1 if tne debotor has failed to pay over any contribuitons (wether from income or from the realisation of assets) that the supervisor deems to be payable
4.2 the possible presentation of a bankruptcy petition by the supervisor is considered further under the heading @failure of the agreement@ below.

Can you please claify what this means exactly


Thanks
Paula