F&F suggested not an offer????

[MelanieGiles]

Rule 11.2 of the Insolvency Act declares that a dividend will be paid within four months of the notice, and that if creditors do not lodge their claims within 21 days of the notice their right to dividend will be lost.

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

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[Lisa2009]

Thanks Melanie, is that 21 days after the variation meeting (26th November)?

[MelanieGiles]

No - 21 days from the date that the 11.2 notice was issued. If this was done within the variation report, you can count the days from that date.

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

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[psbmids]

So could an IP issue an 11.2 notice after 12 months say, to clear up any existing claims? Or even after the first creditors meeting if an IVA was accepted by other claimants?

[MelanieGiles]

An IP can issue this notice at any time he or she likes, but they then must pay a dividend within the following 4 months. It would be too early to do this at the beginning of the case, but no real reason not to by the first anniversary.

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

[catullus]

Do you rely on this rule,Melanie?

My policy is always to reserve for a known debt, regardless of whether they have proved or not.

I can't quote you the cases but my recollection is that an IP could be held personally liable for making a distribution, without carrying out exhaustive efforts to agree a claim, regardless of 11.2?

Always ready to learn!!

[MelanieGiles]

No I don't in IVA's, on the basis that most of the creditors are known to us and we have contacts with each of them to enable us to get claims agreed. We also tend to get most of the claims in either at the creditors meeting or shortly afterwards as a general rule, and rarely have loose claims outstanding at the first anniversary, unless they are trade creditors or HMRC where returns have not been submitted or finalised.

I personally would never leave a £30k Lloyds claim out in the cold, when a quick call to KPMG would get a proof of debt fairly smartly.

But having been through two regulatory inspections over the last 6 years, I can confirm that Rule 11.2 can be used in IVAs for the purpose for which it was drafted - ie declaration and payment within 4 months. What appears to be generally happening, however, is that some IPs are using this as a rod to beat up creditors with - and then not distributing within the timescale. Naughty!

As a matter of interest, what do you do with the reserved money you are holding at the end of the case?

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:
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[catullus]

I've never been there but,in theory,I think that our proposal and T&C's (R3) provide that the money is given back to the debtor to hold on trust for the creditor, not that I think that I would do that either for any sizeable amount.

What I wouldn't do, regardless of what the proposal and mods say, is distribute it to other creditors.

But as you say, it's all theory, good practice has to be to agree the claims quickly.

On another professional note, what did you think of GT's recent email edict.Cheeky is a word that comes to my mind, particularly relating to procedures where there are differences in claims (from the S of A) and submitting supporting docs!!

[MelanieGiles]

Don't confuse that ability to return funds to the debtor with uncashed dividend cheques. I think you will find that you can return to the debtor in the event of uncashed cheques, but this of course assumes that a claim has been received and agreed first.

My own proposals allows for the return of such funds to the debtor if the amount is <£500, but distribution to the other creditors otherwise. Other alternative is to pay to the ISA.

With regard to the receipt of claims, you have to draw the line somewhere, and I personally would not allow a provision if a creditor could not be bothered to submit a claim, and ample time had been provided for this along with a final notice. But as this is an interesting point, and I am meeting with my expert solicitor friend on Wednesday, I will enquire.

We generally find with GT these days, that they submit PODs in line with the SofA figures, and back this up at a later stage with formal confirmation. As in my practice we independently verify the creditor claims prior to the IVA being issued, we rarely get discrepancies of more than 10% so tend to accept the claims as they are received without further ado.

I do hope that these voting representatives are getting their acts together soon with regard to claims submission, especially as we are now being asked to distrubute at earlier intervals, and of course with the advent of SIVAs (I know it seems to be a neverending story with that - Oct 08 I now hear!), no claim within 90 days means no cheque.

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