Dividends compared

[mb2]

Whilst I am happy to maximise payments to creditors, I am been reading many posts of reassurance to other forum members where dividends to creditors are regularly quoted as c.29p/£.

My IVA started in the Spring and my dividend is 89p/£! There is a clause from the smallest creditor put forward that any earnings surplus go to the IVA as well.

It is unlikely that I will have any surplus and more than likely not declare it if I do.

How unusual is such a seemingly large dividend.

[Oliver]

IVA's as there name suggests are INDIVIDUAL. This means that 2 people with the same amount of debt may be required to pay different dividend amounts to have their IVA proposal accepted. A person will always be required to pay as much as they can so this can range from anything to up to 100p in the £. If you are paying 89p in the £ this will have been because you can afford to pay this dividend. Remember that you are still not fully repaying the money owed and that all interest and charges are legally frozen meaning you will never have to pay for more than 5 years.



Best Regards
Oliver

Thomas Charles Ltd: Experts in all things IVA
www.thomascharles.com

[mb2]

Thanks for the feedback Oliver. I realise that I am not paying back everything I owe as over the term of the IVA interest etc would accrue if the IVA wasn't in place. Perhaps my posting wasn't as clear as I intended.

I realise that IVAs are negotiated contracts and will be dependant on prevailing circumstances such as disposable income, as such they are as you point out "Individual".

I am not resentful of the size of the dividend and see my IVA as a vehicle for being more in control whilst at the same time ensuring that creditors receive as large a dividend as possible. Interestingly, since the IVA started in the spring, the approx 70% of the debt by value has been sold on.

My points with limited experience and statistics, were that

• Members often quote a value of sub 30p/£ and was my dividend unusual?
• Based on the 89p/£ I was surprised that there was a clause for any surplus to go to the IVA

[Oliver]

I would say that your dividend of 89p in the £ would be rarer than a lower dividend. I wouldn't like to state what the average IVA dividend would be but I would guesstimate that this would be between 25-50p in the £. I would suggest that the reason there are less people paying the top end dividends like yourself is because you find yourself on the cusp of potentially being able to use a debt management plan (if you can manage to get interest frozen) to pay your debts back. However, you are most certainly not alone and I regularly see clients paying anything up to 100p in the £ in their IVA proposals.

The reason that you are still asked to pay a portion of any extra monies is because IPs work on behalf of both you and your creditors and so they are duty bound to seek as much money as possible for your creditors right up to the full amount owing. Extra monies can take many different forms, if you won the lottery you would have to pay all the money you owed, and this is a similar case with overtime, commission and bonus, although you will often be allowed to keep 50% of these in order to encourage you to continue to work towards them etc...





Best Regards
Oliver

Thomas Charles Ltd: Experts in all things IVA
www.thomascharles.com

[mb2]

Thanks Oliver - here's to all the numbers and the bonus ball!

[neverending]

Hi
89p dividend IS high and when you add on the IPs fees then you will be paying in more than you actually owed[interest not included].What is the toatal debt and how much are you paying each month ?
regards

[mb2]

The debt was c.£74K, the IVA payments are c. £1.2K per month. The nominee & supervisor fees are being taken out of the £74K (the fees equate to 11p/£) and BTW I did not pay any fees upfront.

Scary figures but I feel I have coped well in the last eight months only 52 more to go ..... knowing I will be debt free; eventually, is a target I remind myself of, on each payment. The first eight months went quickly.

I feel that the creditors have been given a very good deal which I see as fair.

[neverending]

They have got a good return and you have been fair.
regards