in IVA with rolling up payment subsidised by partner

[ianmillington]

It depends whether or not the proposal provides for the Supervisor to charge for a variation meeting.

[plasticdaft]

Ahh,I thought that there would always be a charge for a variation meeting given that it involves extra work for Ip's.

[ianmillington]

No, although I can see how you would believe that to be the case. Most IVAs nowadays (at least Consumer cases) are done on a fixed fee basis. If we want to charge for a variation we need to have it in the proposal or get the creditors to award additional fees when we actually convene the meeting.

One exception will be if the fees were determined to be on a time-cost basis in which case the extra work would result in extra fees.

Ian

[ianmillington]

Gordon

The idea of a variation is that you cannot fully comply with your original plan and so you put forward an alternative to see you to the end the IVA. That generally means reduced contributions, but an extension is not obligatory simply because the monthly contribution goes down as it's quite possible to offer the creditors a lower return in the light of your reduced ability to pay.

Given you are already doing 6 years if I were your IP I would be reluctant to ask you to extend. You have already complied for 56 months so I don't see why the creditors should not as a principle cut you some slack, particularly in the light of your circumstances, unless of course you are paying a very low dividend already .

You are right to check the papers - I wish everyone did. Then have a word with your Supervisor and see how the land lies.

Ian

[ianmillington]

I would sit down and work out how much you can realistically afford to pay, and then be proactive and approach your Supervisor with a revised proposal. Much better to do that than endure misery over the next 16 months, or wind up with your IVA collapsing.

I imagine you've said it elsewhere but can you tell me the dividend your IVA is meant to pay out?

[ianmillington]

I would normally expect the Supervisor to take any variation fee out of the IVA fund, so you wouldn't generally have to pay for it, although you will of course already have paid in the money from which he draws it, so it's reflected in a lower dividend.

Ignoring amounts, the creditors are receiving dividends and by all accounts the IVA is proceeding OK. As a result, there are reasonable grounds for believing that the creditors will accept a reduction in payments to take account of your reduced circumstances. The $64,000 question is, of course, how much of a reduction you need.

Ian

[ianmillington]

If I understand you correctly.....

I think the way that fuel etc bills have been rocketing and your enforced change of job it may well be obvious to the creditors that your ability to contribute has been impaired.

If you see yourself making it to the end of the year on the contracted payments I would pre-empt the I & E review by getting your figures in and your proposed revised figure for the final year before the anniversary. That way the Supervisor can kill 3 birds with one stone : Annual report, dividend cheque (as seems to have happened previously) and variation notice. Just a thought.

[ianmillington]

It is clear that you have displayed a highly responsible attitude to your IVA, and I'm sure your IP would not see any request from you for a variation to be without good reason and as such I am quite sure it will be viewed seriously. Yes, it is best to approach this on a "big bang" rather than a piecemeal basis and with the backup evidence to which you refer.

Also it won't do any harm to notify your IP that it's on its way.

[ianmillington]

Welcome, any time

[v6daddy]

Hi Ian and Mel, interesting reading. At the risk of being a pain, I have a couple more questions, firstly: at the first meeting when an IVA was discussed,I said I wanted to "try to do the right thing and pay some money back" to my creditors, the person who later became my IP worked figures, but I had to give my information about partners net salery, and her outgiongs, and because of the size of my debt and my earnings, to get into the 25p in the pound zone for the IVA, HER disposable income was calculated as well as mine, and not just the amount she contributed to the household bills, was it right to do that ?, and secondly, the company that my IP works for, and I believe is a director of, has changed "ownership" and is now known by a different name, I have been told to change my standing order to another name, but it is not the name of the "new company" on the form, but what seems to be a bank account in the personal name of the new "owner" for want of a better term, his name appears on some of the letters I get. I am not at all happy about paying into a bank account that does NOT bear a company name, can you advise on this as well please. Many thanks.

[MelanieGiles]

It is usual to take account of a partner's income in the calculaation of your own disposable income. In the good old days, when most of us learned our trade, creditors trusted the word of IPs and did not touch the partner's spare money - the computation being effected merely to demonstrate that you were both paying a fair share towards the shared household bills. Sadly, of late, creditors and perhaps some IPs have sought to include the partner's disposable income into the IVA proposal on the basis that he/she must have benefitted from your debts. Whether this is right or wrong is irrelevant - they have the power of the vote and they make the rules.

In your case your IP seems to have done this to affect a dividend of 25p in the £ which, until quite recently, was viewed as a minimum dividend beyond which creditors would not accept an IVA.

Do remember that IVAs are personal assignments of the IP concerned and not the firm. In my case I own my company, so this is irrelevant, but other IPs are just employees of the company and it is important that their names are on the accounts and not the company's in order that your funds can be protected for the benefit of your creditors.

Which firm are you using as a matter of interest?

[v6daddy]

Hi Mel, its now called debt solve, formally Tony Freeman & Co. How do I know that paying money into this account will go where its supposed to, and realistically, I would need to halve my monthly payments to survive, is it likely this will be found accepatable, given I have paid around £12,500 back so far.

[MelanieGiles]

I believe that this was the firm that handled Andy Davie's IVA, so he may be able to give you better specific advice.

If your money goes walkies, which is highly unlikely where a qualified professional is involved, then there is a fairly rigid insurance policy in place to cover this, so I woul dnot worry about that. What is of concern is that you are no longer affording your payments, and it appears that your IP is not prepared to put forward a sensible offer of variation. It is your right as a party to the IVA to offer alternative options to your creditors, and their right to either accept or reject them. The IP has a duty to put forward any reasonable offer, and I fail to understand why this is presently being denied to you.

Perhaps Ian knows the IP as they are based in his neck of the woods and can help you further?

[v6daddy]

Hi Mel, thanks for all the advice. I will contact my IP with MY proposal about what I can afford,and hope that it gets accepted. If its rejected, I hear that Brazil is a nice place !!!.

[ianmillington]

Hi all - firstly I agree with everything Malanie has said. Sometimes life can get awkward when there is a partner contributing directly or indirectly into an IVA. In all cases the client needs to walk in with eyes wide open, that is equally true for contributing partners.

Sadly, nowadays, it seems to be a given that earning partners will contribute, whether the debt is in their name or not, aand any proposal that tries to ringfence a partners income without very good reason can as a rule be assured of a rough passage at the creditors meeting stage.

I'm sure there is nothing sinister about the banking issue. Tony Freeman has been around a long time. I know there have been some events in his practice in the last few months and I'll make some enquiries in the morning about it and will come back.

Ian