Help! Found out today that my variation, applied for due to reduced income and arrears, has been rejected and the creditors have requested the IVA be failed. What next? Where do I stand now? Don't want BR if possible due to occupation. We have no assets whatsoever except our mortgaged house in negative equity! Any advice/suggestions gratefully received! Thank you.
It is unusual to see an IVA failing at a variation meeting - you must have been offering a very low dividend compared to the one you originally offered. Did your IP fight as hard as they could for you do you think? Did they tell you what the actual reasons for failure are?
If the iVA has to conclude, then you are back to the position you were in before it was taken out - ie creditors can pursue you directly and there may be a free for all. If you wish to avoid bankruptcy then entering into a DMP with creditors may be your only option, but that does not come with any guarantees either unfortunately. Personally, if I felt that I had made my very best offer to creditors and it was rejected, I would give bankruptcy very serious consideration. Why do you feel your employment would necessarily be affected?
Thanks Melanie
I am a returning user and was very grateful for your advice and sugestions a while ago. But now my IVA has turned for the worse it seems.
I'm with GT and the original IVA was proposed in Sept 2007 but did not get approved until Oct 2008!! And since then my business income has seen a big reduction from Sept 2007, in fact. But was so pleased this difficult proposal was approved, we went with it in Oct 2008.
With arrears and reduced income, the variation proposed an extension of 24 months and an affordable repayment of £500pm. This reduced the dividend down to 19p from 31p!!!
It appears the creditors have 100% rejected it and 100% wish for the IVA to be failed!!
I need to check again with GT as I didn't take all of yeaterday's phone call in! But I also think that HMRC Inland Revenue may be considering petitionong for BR.
My concern for BR is our home (we have a toddler and also 12 week old twins!) and for my occupation as a mortgage and insurance adviser.
GT are adjourningyesterday's meeting for two weeks to see if any counter proposal can be made. I am considering asking them to propose keeping the dividend the same but asking for an extension of 12-24 months to clear up the arrears built up. Then suggest a sliding scale upwards repayment plan to maintain the original terms. What do you think of this idea and it's possible success?
With BR, as we have no assets, my wife is in a DMP with Payplan and our home is in negative equity by c£30000, do you think BR would be petitioned against us and would we lose our home?
Hmm - HMRC can be less than helpful sometimes, do you owe any post-IVA tax at all? If so, they will automatically reject variations and your IP ought to have checked this out before putting pen to paper.
If you have no assets then why not go bankrupt - would this affect your career? If there is no equity in your property then this is unlikely to be affected by the proceedings. Better to speak with your own IP about this directly as they have detailed knowledge of your case.
I believe BR would mean, under FSA regs, I would no longer be able to trade as a Mortgage Adviser! However, I will get full clarification of this because, as I am not a full IFA, it might be the rules are slightly different.
If, as I suspect, I would not be able to trade, then this would obviously lead to no income and the amouunt of surplus I was offering towards my IVA would disappear and not be available for the BR. Would this influence a creditor's (ie HMRC) decision to petition?
I would like to continue trading, therefore, saving the IVA or undertaking a DMP would appear to be the best options for this I presume. Is that right?
However, it is reassuring to note that with BR, it is unlikely the house would be lost.
19p in the pound doesnt sound too bad. Much more than creditors would get through forcing BR!!! Check the implications regarding your job and then you will know if its a good option or not.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
If you're not able to trade Maradona, how will you be able to continue paying your mortgage if you were to go bankrupt?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Thanks for your posts.
Will be checking out the trading situation with the FSA.
re mortgage, I assumed that all our outgoings would still be required to be paid and my wife's salary plus anything I might earn if /when finding alternative work would cater for it.
Need to find out more about ALL the implications of BR!
Is it likely BR would be petitioned against me without any assets and substantial negative equity?
Going to repropose a variation by trying to maintain or get very near the original dividend but asking for an extension to cater for the arrears.
Any BR or alternative courses of action would be gratefully received.
There are ways and means of working with HMRC so long as you understand what they look for in an IVA proposal. Did your IP provide them with proper trading projections, matched to historical accounts, and was it fully explained what changes you had and were still intending to make to your lifestyle to ensure the success of the IVA. These things are very important when choosing a firm to represent you.
Thanks for still bearing with my waffles, Mel!!! Here's another one!!!
I think projections for one year were done and they suggested (we had no reason to doubt why not) a similar income going forward.
However, this never happened and basically Grant Thornton and I have been juggling various revised repayment plans to cope with the reduced income and the arrears building up, until it came to a head when they recently suggested a variation.
They asked me to give my best offer and wondered if I could consider offering to extend the term too. This I gladly did, but to no avail, I'm afraid! The creditors rejected due to reduction in dividend AND the extension from 72 to 96 months!
Spoke to GT today. It hasn't helped that The Insolvency Exchange were one voice for my RBS, HBoS and HSBC debts...different from when original approval.
HMRC said they were unhappy that the IVA was effectively breached in the first 12 months and, along with all the creditors that bothered to vote, said the IVA should be failed.
Also, HMRC requested GT petition for my bankruptcy! However, GT aid today they didn't have the remit for that in the original terms of the IVA (I think that's what she said!). If GT don't petition for HMRC, where does that leave things?
As I would have to cease trading if I was made BR, I am re-proposing my variation, this time by maintaining the agreed dividend, putting down a realistic repayment plan that takes account of what I can afford now and what I think I can pay as the IVA progresses and business improves (I hope)but with asking for a 12 month extension to help play catch up rather than 24 months. What are my chances do you think?
Another thing GT said today, which surprised me, was to consider allowing the IVA to fail as it is breached but then propose andther IVA from scratch!! Surely my creditors would reject that if they have rejected a variation to the original one?!
I've just realised how much I have typed here!!! Sorry!!! But hope you can help. Could you even take on the baton for me?!!!
Thanks, Mel. (And anyone elese who may have suggestions/advice/support to offer!)
Hi Mel
Just noticed a question you asked me in one of your earlier posts!
No...I don't owe any post-IVA tax.
How can I get HMRC back onside do you think?
Hi! I can't be as much help as Mel but wanted to add my support. If you can show an IVA provides a better return than BR, it seems silly for creditors to force BR. And effectively there will be no return in BR as you wouldn't have an income. GT are a good firm so request a meeting with your IP direct to decide on the best course of action. Good luck x
Firstly I don't think that a 96 month IVA was a sensible solution to put before creditors, and your credibility may now be shot if you go back with a seven year one.
HMRC are very tricky to deal with once a breach has occured, and seem to prefer bankruptcy these days particularly if there are arrears of post-IVA tax outstanding as well.
I also don't think it is sensible to look at failing this IVA and representing another - you will merely be in front of the same creditors again with the same offer!
Do you have assets at risk if you were to be made bankrupt? And why do you feel that your business could not survive under bankruptcy proceedings? Many do - depending upon the trade or profession you are in, and everyone has a basic human right to earn a living. What do you do in your business?
Thanks Broke. Your support and advice much appreciated.
Mel...no I don't owe any post-IVA tax to HMRC. I have no at risk assets other than a house in negative equity. My occupation is a mortgage and insurance advise and as such would have to stop until bankruptcy is discharged.
I hear what you say about the extension issue, however, this time I'm aiming to keep the 31p dividend as opposed to the 19p GT proposed on my behalf!
I have always felt GT were doing well for me and was very grateful for getting a complex arrangement approved (even if it did take 13 months!!) and helped with adhering my requests to amend the repayment schedule along the way. But on reflection, I'm not sure they've pulled out the stops fo me, even when I consistently explained my income had reduced since approval. For example, they have never mentioned the 15% reduction in repayments without having to call a meeting that I have read about on the forum. (Might be just being bitter and twisted...I don't know!!).
Anyhow...spoken to my wife and she wondered what woukd be the chances of a joint IVA working out for us and what issues are there for this?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
