F and F settlement from company dividend

[paulgm_2000]

Hi,

I am about to enter into an IVA with a debts of around £55k. I will be paying around £20k in total over the five years.

I am the company director of a limited company and pay myself a set salary each month. If I were to have a very good business year and therefore able to take a dividend from the company would I be able to make a Full and Final Settlement offer?

My fear is that the creditors will then think I can afford more per month and up my monthly repayment.

Can anyone advise on this please?

[MelanieGiles]

Hi Paul and welcome to the forum

Unlikely - as the dividend income would already be captured under your IVA, but if you were able to pay creditors in full then that would be acceptable of course!

As you would be able to afford more per month, it would be perfectly right to increase your payments, and your IP will need to see copies of the company's filed accounts each year to make sure that you are not building up reserves which they could benefit from.

The shares will also be valued as an asset for the purposes of your statement of affairs.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[paulgm_2000]

Hi Melanie,

Thank you for such quick response.

As my limited company is a separate legal entity surely the IP has no right to take the company accounts in to consideration?

My question was more specifically, if my company received a big order and hence a large windfall could I not take the money from the company and offer a final settlement. This is as apposed to building up reserves in the company.

Thanks

[MelanieGiles]

The company is a separate legal entity but the shares are yours, and therefore the increased profits available to pay dividends are yours as well. How many shareholders does the compaby have?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[paulgm_2000]

I am the sole shareholder of the company.

Would the creditors or IP therefore seek to take any spare money available in the business?
I am concerned that any company profit would have to go to my personal creditors and leave the company unable to grow or be stable.

I must commend you on a first rate service by the way!

[paulgm_2000]

I should also point out that I pay my self a small salary and larger dividend every month. The combined total stays the same every month.

[MelanieGiles]

Hi Paul

No - the creditors would not want to leave the company undercapitalised, and you will discuss this with the IP at the end of each year when the accounts have been finalised.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp