HELP! Need advice on revised proposal

[desperateneed]

Will someone please help me understand a revised proposal my IP has sent to me? I am too frightened to sign and agree after the negative past experiences of dealing with this company. The result could be that I lose my home.

[catullus]

can you post some details?

[desperateneed]

It is my pleasure!
As part of my original proposal it stated that in year 4 I must remortgage my home to release the equity - this was in August 07. As my home is 50% co-owned with a housing association, this proved impossible. The advice I received from this forum proved invaluable and it was recommended that I go back and ask for a creditors meeting - this was September 07. I proposed that I continue to pay until the end of year 5, and offer an extra 12-months in lieu of the equity. However, this forum suggested that I did not offer the extra year and let the creditors ask this.
It is only TODAY that they have sent me the revised proposal - that is 10-weeks after approaching them and they are now saying that the creditors meeting will not be until 8 Jan 08! Apart from this being a 4-month delay I do not trust them. They want me to sign this proposal and return it to them immediately but as their past advice has almost lost me my home, and I am understandaby scared. I would really appreciate a translation of this as I don't understand the 'jargon', do you want me to type it all out?

[desperateneed]

I know this is boring, but can someone please translate this for me?

For the purpose of considering a proposal by the debtor and that their arrangement should be varied. At this further meeting of creditors, the following amendment to the arrangement shall be considered:

Modification 2xii of the Chairman's Report regarding the equity in the property, not be enforced.

That the debtor make additional payments of £250.00 per month for a period of 12 months to maximise the dividend available to the creditors.

Creditors will recall that the debtor's proposal was approved at a meeting of creditors held on 11th August 2003. The substance of the proposal was that the debtor should pay to her Supervisor the sum of £230.00 for a period of 60 months. Over the term of the IVA a total of £13,800 will have been introduced to the scheme. This proposal contained an estimate that, after the costs and expenses of the Supervisor had been provided for, there would be a dividend to the creditors of approximately 41p in the pound.

A further meeting of creditors was convened on 23 August 2004, at which it was agreed to alter the frequency and method by which the Supervisor reviews the debtor's income and also altering the basis in which the Supervisor is renumerated. The divident payable to creditors, after the amended proposals were agreedm was estimated at 30%.

In the 52 months since the initial meeting of creditors, the debtor has forwarded a total of £10,707.29 to the arrangement.

The debtor has forwarded confirmation that she has attempted to obtain a re-mortgage in order to comply with modification 2xii of the Chairman's Report, however this has not been possible due to the fact that the property is jointly owned with a housing assosiation.

Due to the above circumstances the debtor has confirmed in writing that she will extend the term of the arrangement for a period of 12 months in order to offer payments in lieu of the equity held in the property. This in accordance with the modification.

Whilst it is entirely a matter for creditors to decide whether or not they will agree this amendment, we would comment that it is estimated that following the payment of outstanding fees and expenses of the Supervisor, creditors could expect to receive 40p in the pound in full and final settlement of thier liabilities.

A form of proxy which ... blah, blah, blah

I suppose I do get the jist, but it is this so many pence in the £ stuff and what was the meeting they had in August 04 was all about?????

[catullus]

Hi desparateneed

I think that the proposal is fairly clear. What it says is that a variation meeting took place about a year after the start of the IVA. Do you remember that? You should do because the meeting couldn't have taken place without your agreement.

The variations that were agreed mainly affected the Supervisor in that it changed the method of doing your annual reviews and changed the remuneration of the Supervisor. Details aren't available but the effect of the changes was that, if you stuck to the IVA, the Supervisor told creditors that they would get back 30p/£, compared to 41p/£ which was offered at the start of the IVA.

The proposal then goes on to say that, because you cannot remortgage, you are prepared to offer creditors 12 extra payments of £250 and, if you do that, the creditors should get back 40p/£, very close to what you originally offered.

On the face of it I would have thought this stands a very good chance of being approved. In addition, nothing in the proposal guarantees a minimum return to creditors so, as long as you stick to what you've promised, the IVA will end regardless of what the creditors get back.

Hope that helps.

[MelanieGiles]

But how curious to vary a meeting one year after the original acceptance just to get a fee adjustment!

And what is not clear to me is has your Supervisor demonstrated to you exactly what you need to do to achieve the 40p dividend. They were happy enough for you to modify to offer a lower dividend to suit their own pockets, but now seem to be penalising you to make the higher dividend - when no doubt their increased fees have now been paid.

Or am I missing something?

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]

I must admit I thought it rather unusual as well.

[MelanieGiles]

I smell a rat - and this smacks of numbers being put forward to creditors without the debtor being aware of how they are to be achieved. Could you clarify your understanding of this please Desperateneed, and has the IP included a schedule of future payments and costs, matched to his receipts and payments to date to demonstrate that this higher dividend can actually be achieved?

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

[desperateneed]

Hello both and thanks for your response(s.

Hi Cattulus: Would they have asked me to attend, verbally ask for agreement, or would I have had to sign something? Cos I don't recall anything ...

Hi Melanie; My understanding of this situation is that they have assumed that I would be able to remortgage in year 4 and thus I would be able to offer a f&f payment. This however, is not the case. In the meantime, and on this basis they have lowered the dividend to 30p/£ to give them a higher cut of the money. They have not sent me anything other than the revised proposal which they are pushing me to sign and return to them by 23 November - tomorrow!

[catullus]

You may not have had to sign something but you should have been sent a notice convening a meeting of creditors, and you should have been sent a report of the outcome of the meeting.

If you keep all of your IVA papers, and you should, you should find these there, if they were sent to you. You wouldn't have been asked to attend, however.

Melanie's point is that you shouldn't sign anything until you understand where the IP get's his figures from to be able to tell the creditors that they will get back 40p/£, if they accept your proposed variation.

[desperateneed]

Okey dokey, have kept everything, so will have another look through - and I certaninly will not be signing a thing until I am satisfied, cos their track record (in my case) is not to be trusted. I thought your IP was supposed to be neutral, but this does not feel that way to me. They are not evasive, not clear and totally unsupportive - don't know whether I'm getting a bit paranoid now, but I think they made a bloomer in the first instance (by supporting the inclusion of the property) and everything since has been a knock-on effect in an effort to cover-up.