increased dividend after meeting - is this usual

[hopeful]

Just got our chairmans report back yesterday from our meeting on Monday and can't believe the increase in the dividend which our creditors are gonna get since they asked for the Supervisors fees to be reduced. Our original dividend was 57.74p/£ and its now gone up to 72.77p/£ plus the sale of my husbands company shares for the next 5 years. Am so pleased that we are able to pay our creditors back that amount cause i feel so guilty that we weren't able to pay back eveything we owed as it was entirely our fault that we are in this situation. Hopefully this will swing the balance a bit and make me feel better into the bargain. Just wanted to know if this is usual for the fees to be reduced by so much

[MelanieGiles]

It can be quite usual for the dividend to increase as a result of creditor modification - and in your case it looks as this has arisen as a result of shares being included in the arrangement. Were they originally left out for any particular reason?

[Michael Peoples]

The dividend may have also gone up because the IP has had their fees reduced. While this may seem better for creditors at this time, in the long run IPs are not going to be able to provide the same services as they have done so in the past if the downward pressure continues on fees. There is already a reduction in the number of IP firms doing IVA work and for those clients with low disposable incomes there are even fewer IVA companies who will take their case. This is completely down to fee cuts and and is forcing people into bankruptcy or nusuitable DMPs because IP firms would actually lose money if they took on their cases. This cannot be good for creditors or debtors in the longer term.

[MelanieGiles]

I completely agree with you Michael. What other profession is in a real lottery about their fees, which are never confirmed until after the work has had to be performed. Crazy!!

[banjoplayer]

Hi Hopeful, I also was notified that my IP had to reduce his fee's which then gave the creditor 33.5p in the £ rather than 26.5p in the £.

It seems strange that creditors can dictate the fee's claimed by IP's after all IP's are qualified professional people.

[hopeful]

totally agree Banjo- couldn't see any other professional body putting up with people changing their fees.

[kallis3]

Perhaps it is about time the fees for and IVA were fixed. Everyone would know exactly where they stood then.

Some IP's - not ones who post on here, must ask for quite large fees, which is why they reduced by the creditors.

As a point of interest, if the IP doesn't like the modification over the fees, can they refuse it?

[MelanieGiles]

They used to be fixed Jan - in the days when life for busy IPs was so much easier. The goalposts were changed by the banks, and this had led to many people pulling out of the markeplace completely. I feel sure that there will be more doing this over the next couple of years.

IPs have no part to play in accepting or rejecting creditor modifications - but if we think a creditor is being unreasonable then we can make representations.

[kallis3]

Perhaps they should still be fixed at a reasonable amount for everyone.

If you make representations to the creditors if you think they are being unfair, what actually happens to the debtor and the IVA?

[MelanieGiles]

I agree! But sadly there are many who don't.

I guess that some IPs might walk away from the job if they feel the fee is not worth their while. Me? I just take it on the chin and move on - we cannot treat human beings as assets and liabilities at the end of the day!

[zim zim]

The trouble with that though Mel, and i'm thinking long term here-if IPs start walking away, it takes away the personal touch whilst at the same time leaving it open to the bigger firms whom, dare i say it,do not really care about the client but just the numbers! By that, i mean that no matter what market you are in, if you can mass produce you will make a profit regardless! Sadly though i feel the clients ie the debtors will suffer along with those that have made it their profession should they choose to leave. Sad days indeed.

Regards zim zim

[MelanieGiles]

You could be right there Zim Zim, but let's hope not.