Confused by supervisor's report

[trionon]

Dear all

I've just received a copy of the supervisor's report following my 1st year of IVA, and having difficulty understanding the breakdown of payments, and wonder is somebody might be able to clarify these for me. My contributions for the year (april, 06 to april, 07) were £6975.92 less various disbursements, nominees and supervisors fees and actual payments to creditos of £5230.31 leaving balance in hand £1745.61. So the question is, why is this balance in hand, and why it was not distributed to creditors (the actual amount distributed was £881.73)?

Also, the report states estimated dividend is 51.04, what does this mean?

Many thanks in advance.

[R1CHARDT]

I think alltho im not sure (i very new to IVAs, but not to debt) that 51.04 is the pence in the pound your paying back.

------------------------

Rich.

[Adam Davies]

Hi
At the moment it is quite normal for your IP to pay themselves first and not pay the creditor until the second year onwards.Yours has paid a small amount and again they have left an amount in hand to cover their fees in case your IVA fails and they have to write to your creditors.This all looks like it,s going to change with creditors insisting on their money paid earlier in the agreement.
The 51.04p is the dividend that they expect to have paid your creditors at the end of your IVA for each £ that you owed.
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

[trionon]

I see, many thanks for the prompt reply although I am a bit disheartened that out of almost £7K contribution the creditors only received some £800! I was on a debt management plan before entering into IVA, and had some creditors cooperated (with stopping interest and penalty charges etc), probably would have paid a great deal more in a year than they are currently receiving but I suppose they will be gaining some considerable sum of money at the end as I will be required to release some equity from my property in year 4. I know it's a bit premature at this stage, but what will be a reasonable sum to offer as a final settlement? the property was valued at £82K a year ago and the current outstanding mortgage is £45K but I was told by my current lender that should I re-mortgage I will not be able to borrow more than 75% given my credit history and the fact that it is buy-to-let mortgage (I have an AST on the investment property and rent myself in the meantime), which at the present state will probably be less than £17K? I was planning to approach my IP at the end of year 2 with the view to ending IVA early but do not wish to put unrealistic proposal, and am actually worried that there won't be enough equity to repay the IVA in any event

[Adam Davies]

Hi
You will only be able to borrow what you can afford,a sensible lender will not allow anything else.You will have to go through a broker in an attempt to get the best deal for you.If house prices keep going up then you may well be able to offer a full and final settlement in a few years.
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

[MelanieGiles]

Hi trionion

It is quite likely that your Supervisor has retained a sum of money sufficient to meet the costs of petitioning for your bankruptcy in the event of IVA failure. This is quite normal, and something which may in fact have been stipulated by your creditors in the first place.

With regard to your re-mortgage, Andy is right and this must be based upon affordability. As you will not be funding IVA contributions when you re-mortgage, it is fair to assume that you will be able to afford to raise a substantial portion of the equity, and a lot of lenders will now go as far as 90% loan to value for customers subject to IVA proceedings.

It is too early to even worry about this at the moment. My advice, for what it is worth, is to review the situation in conjunction with your own IP in a year's time.

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

[trionon]

Many thanks to everyone who replied, things are much clearer now!

[ivoriva]

My creditors had a modification expecting a annual return every year from end of year two (rather than a small % end of year two and the rest on completion), and interestingly, I'm sure there was one stating that bankruptcy fees couldnt be with held. Sounds like they dont want me BR, if I fail on the IVA.

[Adam Davies]

Hi
I think that we will see more modifications relating to payments to creditors.They are pushing for payments to be more evenly spread out over the term of the IVA,if this happens IPs are at risk of not recovering all their costs if an IVA fails.
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