Do you think my offer will be accepted?

[peter.s]

Hi,

I have an IVA. 60 x £626 (although Payplan have accepted £595 as they over estimated the effect of the increase in my salary from stopping paying my pension).

I have recently changed my job as my current job was at risk and to give me better prospects for the future (I was in a dead-end job). The net effect of this is that I now have £200 less disposable income per month. My pay will increase back to my old salary in 3 years time, and then should go a bit higher still.

PayPlan's fees were £8,820, and total fees cannot exceed 35% of the total contributions.

My brother has offered to lend me £15,000 in April when he gets a big cheque in from a client. At this time I will have paid in £7,140. I would like to propose this as a full and final settlement - thus I will have paid £22,140.

I have HSBC as a creditor, and SLC company as another. (SLC has just under 25% of the debt).

Do you think my offer will be accepted? Do you have any other advice?

[pbeck]

It seems that by April you will have paid 1 year's contributions at £595 per month and thus have 4 years left to pay, which will come to £28,560 under the original deal.

If you were to only pay £395 for the remainder of your IVA, this would come to £18,960 as against £15,000 which your brother will offer at that time.

I think the likelihood of creditors accepting the lump sum settlement is less than even as: 1. you are proposing a variation after lesss than 1 year into the IVA, whereas many creditors refuse to consider variations within such a short period, 2. you voluntarily changed your circumstances rather than this happening as a result of events outside your control, 3. you would be able to continue making monthly payments anyway, albeit at a reduced rate, and 4. your brother's offer is significantly less than even the reduced payments you could afford.

Talk to Payplan about it and see if they will agree to call a variation meeting. If it fails, then you will have to continue at the original deal or see your IVA fail.

[abc]

Based on the figures you have given it might be worth trying but would be more attractive to creditors if the lump sum was £20,000 as with the savings on Supervisors fees it would only be a small discount. Money now is always better than money later. I assume you have no property and I assume that you will be no longer able to afford the contributions as you will have to pay back your brother?

[peter.s]

If I offer a F&F settlement, about how much of PayPlans fees will they still charge. I understand that it is not pro-rata
So how much of their approx £9K fees for the full IVA will they still take after only 12 months?

I will not be able to pay any more as I will be paying my brother off, but without the stress of having to make each payment monthly for another 4 years.

PayPlan say they would want me to make an offer in the region of £30K. I think they want their full fees even if I settle early. They said they wouldn't make the offer of £15K. If I made an offer of £20K (assuming my brother could stretch that far), could I make PayPlan call a creditors meeting? Or is it up to them?

Also, in the creditors meeting, can they offer my creditors either a F&F of £20K, or take a lower monthly repayment for a longer period due to my reduced salary at the same time?

What would happen if my F&F was rejected. Could I request another meeting to get the repayment amount amended due to my lower salary?

[peter.s]

I have no property and I live with my folks in a rented house.

Is it worth mentioning to Payplan that I may have to reduce my hours in the future - my parents are both in their 70s and I live with them and help them manage around the house. Their health is poor and deteriorating and that's why my brother is trying to help me with my IVA so that if they get worse I can work part-time, which my new job allows if required.

[Lisa2009]

It may be worth mentioning because it may alter your ability to maintain your IVA payments in the future. I dont know whether on them grounds they would accept a reduced offer but theres no harm in asking.

mrs skint

[MelanieGiles]

Taking Philip's comparison of approx £19k were tbe IVA to continue, or £15k offered by your relative, I would have to say that I would be unhappy to put that offer forward. An increased offer of £20k has far more chance as it offers a direct comparison of your current circumstances - which you say were largely enforced due to direct job insecurity.

You could find the additional £5k by making ongoing payments of £395 for the next year, but then advising creditors that after this time the money would be needed to repay your relative.

[peter.s]

The admin person at Payplan said they could not put forward a full & final settlement at the same time as an amendment to reduce my IVA due to my change in circumstances (change of job). Is this true?

I was also told that if a F&F was rejected by my creditors then I would have to keep paying my current payments which are already too expensive due to my reduced income [:(]

Also, if my offer wasn't sufficient then Payplan said they wouldn't even put it forward to my creditors. Is there no way I could "make" them put it forward. Would speaking directly to my IP a way to do that, if it is possible to speak to him directly?

If an F&F is put forward, do my creditors just say yes or no or can they amend it as well?

Basically, I have changed my job due to a high probability of being made redundant. I have moved to a job which allows me to work flexibly if I need to (I will probably work part-time in the not to distant future due to my mother's ill health - worsening arthritis and early stages of alzheimers at present. Also, she is only partially sighted). My brother has agreed to lend me as much as he can, about £15K, which I can pay him back at a similar rate to my IVA, but he will "write off" if/when it comes to the point where I need to work less to look after my mum part or even full time, depending on the situation.

Obviously my IVA would fail if I had to do that mid-term, so am looking for the best solution for all parties.

What is the best way of putting that forward to PayPlan and my creditors so that we can all move on. Should I send them medical documents and reports when I submit my proposal.

Sorry for the long post, and thanks in advance! [:)]

[pbeck]

If you're proposing that you repay your brother at the rate of £395 per month why not simply suggest to Payplan that you they call a meeting to vary the terms of the IVA to continue making your payments at that rate for the remainder of the IVA and not borrow the money from your brother ?

When you enter into an IVA the creditors will feel that in exchange for the debt release you will commit yourself to the original deal for the full 5 years, if you want to change things relatively early on why should they continue to believe anything you originally said ? In general creditors don't like to be faced with requests for variations to IVAs unless it can be seen genuinely to be as a result of events outside a debtor's control as otherwise it brings the whole system into disrepute.

From what you say, you changed you job entirely voluntarily because of only a "probability" of being made redundant. At the time that you entered into the arrangement less than 1 year ago were you planning to change jobs to earn less ? Could you have foreseen ongoing deterioration in your mother's health at that time or a high probability of redundancy ? Did you declare in your original proposal that these problems might exist in the future and that if creditors voted to accept it then you might not be able to stick with it ?

[MelanieGiles]

Personally I feel that peter.s has good grounds for a variation - although he probably should have involved his IP in his decision making at an earlier stage.

I have an elderly Mum who lives with us and I can see that her condition is also deteriorating, which has made me have to change some of the things that I do - so I fully understand the worry and concern that you are going through right now. Given the choice of paying my debts or looking after an elderly loved one would not take me too much time to make my mind up.

The key here is that he has changed his job for good reasons in order to ensure that his Mum can receive appropriate care in the future, but is still committed to making his IVA work in some reduced capacity. Given the option of carrying on paying payments of £395 per month for the remaining five years, or offering a lump sum to settle early, if I were a creditor I would take the money and run any day.

This is all about having an IP who will carefully and appropriately explain your position to creditors. I cannot understand the comments peter.s makes in his first paragraph about his IP's advice - this does not make sense, but I suspect that he is talking to someone relatively junior rather than the IP himself. Peter has a right to put a variation forward, and even if he had the ridiculous no variations for the first 24 months provision, his circumstances have changed and if I were his IP I would be prepared to present a revised offer.

Peter - you should also look to see if your are entitled to any carers allowance as a result of looking after Mum. This could top up the shortfall, making your current situation a little academic.

[peter.s]

Thank you for your advice and understanding. I really appreciate the swift response.

How do you suggest I move forward with my proposal?

I am thinking of putting the whole situation into writing and hoping that my IP will understand my position and put it forward to my creditors in the same way you would.

Should I provide documentation of my mother's deteriorating condition or other "backup" documentation, with a letter clarifying the situation and the offer?

My worry is that as I have only spoken to the admin staff at PayPlan and not the IP, except when my IVA was approved, that my IP will not fully understand my predicament, or that it might be rejected before it gets to him [|)]

What should I do to make sure it is considered exactly on its merits. (I have confidence in my IP, but not the admin staff).

I am not qualified for carers allowance as I currently earn above the income threshold of £84/week after income tax. I would qualify if I gave up my job but it would allow only a subsistence living.

Personally I feel that peter.s has good grounds for a variation - although he probably should have involved his IP in his decision making at an earlier stage.

I have an elderly Mum who lives with us and I can see that her condition is also deteriorating, which has made me have to change some of the things that I do - so I fully understand the worry and concern that you are going through right now. Given the choice of paying my debts or looking after an elderly loved one would not take me too much time to make my mind up.

The key here is that he has changed his job for good reasons in order to ensure that his Mum can receive appropriate care in the future, but is still committed to making his IVA work in some reduced capacity. Given the option of carrying on paying payments of £395 per month for the remaining five years, or offering a lump sum to settle early, if I were a creditor I would take the money and run any day.

This is all about having an IP who will carefully and appropriately explain your position to creditors. I cannot understand the comments peter.s makes in his first paragraph about his IP's advice - this does not make sense, but I suspect that he is talking to someone relatively junior rather than the IP himself. Peter has a right to put a variation forward, and even if he had the ridiculous no variations for the first 24 months provision, his circumstances have changed and if I were his IP I would be prepared to present a revised offer.

Peter - you should also look to see if your are entitled to any carers allowance as a result of looking after Mum. This could top up the shortfall, making your current situation a little academic.

[MelanieGiles]

I feel that it is important to discuss this with your IP directly, although I know that other people may feel differently. By engaging directly with your IP you are dealing with the decision maker, and the person who ultimately decides whether to put your revised offer to creditors. If you can provide them with enough information to support your request they will see this as being helpful, and it will strenghten your case.