IVA costs [IP charges]

[rickyg33]

yes........HSBC are also on the list, but not as big a creditor [smallest in fact]

[carlmcmullen]

Problem you have is HSBC use a company called to The Insolvency Exchange (TIX for short) to vote on there proposals.

TIX also vote on RBS (Including Mint), halifax, natwest and various others. So if TIX are voting on your proposal on behalf of HSBC then they will enforce the 40p in the rule for the rest of the creditors regardless.

So you need to be reaching that hurlde rate, and like Melanie said with costs of the IVA then you would be looking at a dividend of 30-40p in the £.

Providing you can reach this bench mark your proposal should have a good chance of approval.

[rickyg33]

I thought there needed to be a 75% agreement around the creditors?

How can they 'impose' a target on other creditors at voting?

[rickyg33]

The list in it's entirety would be:

CapitalOne
Mint
HSBC
LloydsTSB
Tesco
Marbles
Egg

[carlmcmullen]

I will let an Expert answer the question about imposeing hurdle rates for other creditors as i dont agree or understand this ruling. TIX should vote independently for each creditor they represent but they dont !!!

There does need to be 75% acceptance from creditors but for example should lloyds have 50% of the vote and accept with no modifciations and TIX vote to impose 40p in the £ and have 25% of the vote.

You have to accept TIX modifications as if you reject them your IVA would not be approved and threfore if you accept the mods the 40p.

Hope this makes sense as it i know it is difficult to get your head around.

[carlmcmullen]

Mint, HSBC, Tesco are all TIX creditors so 40p in the £ would be required.

The list in it's entirety would be:

CapitalOne
Mint
HSBC
LloydsTSB
Tesco
Marbles
Egg

[rickyg33]

sorry but it doesn't make sense to me

I'm assuming each creditor has an even 'share' of the vote [or does the sum owed determine share?]

if there's 4 creditors and 3 vote to accept, the other 1 has no choice but to be bound by the acceptance

in my case, if there's 7 creditors, then it needs 6 out of the 7 to accept, as 5 out of the 7 is only 71%

my stumbling block as far as the 40% hurdle is concerned, if TIX represent HSBC and Mint, then that's 2 out of 7 that can reject and the other 5 have to follow suit

[carlmcmullen]

No it is 75% in value from the creditors who vote at the meeting.

I would suggest contacting an IP and having a chat who can fully assess your situation and see if there is a way of getting past that 40p in the £. I have known to extend IVA's a little longer than 5 years to achive it.

[MelanieGiles]

The 40% hurdle rate is only used for HSBC and not the other creditors represented by TIX. I think that they initially voted similarly for all of their clients, but latterly they seem to have been voting independently for the banks that they represent.

Have you experienced otherwise in your firm Carl, and how many IVAs are you proposing each month?

[carlmcmullen]

I was still aware that was there policy and to the best of my knowledge they were still enforcing the 40p in £ hurdle if they represtned HSBC on all other creidtors they were representing.

You have got me thinking now and I have just sent myself an email to check this out tomorrow.

Thanks Melanie

[emma_t]

Hi ricky

I must admit when I was looking at proposing an iva I did not even consider the fees of the IP, it was much more important to me to have an IP who I had full confidence in as 5 years is a long time and it needs to be right from the start.
I knew the fees would not be in addition to my payments, and also knew that creditors would vote to bring them down if they were to high at the creditors meeting.

i would take some individual advice regarding your case and you will be guided through the level of payments you would need to make in relation to creditors hurdle rates.

have a look at www.iva.com for reviews of iva providers and goo luck
Emma x

[louisa.s]

To be honest I thought very much along the lines of Emma! My IP costs were the last thing on my mind as we focused on getting our IVA accepted and starting our pathway out of debt.

Saying when i have looked at our proposal recently we seem to have a good deal. We are paying approx £7000 over the 5 years for them to do all the work which I think is very fair.

[aguise]

Hi Ricky
I notice you said you assume each creditor has an even share of the vote, they do not their percentage of vote is the percentage of debt owed. So if you owe 20,000 and one is owed 10,000 they will have 50% of the vote the others will have the other 50% again depending on how much they are owed.
As for the IP fees again it was one of the furthest things on my mind at the time, just getting help was important. Ours are about £9000 and that is for us both as we have interlocking iva's.

Ang

[carlmcmullen]

Hi Ricky.

I have just had a telephone conversation with The Insolvency Exchange who have confirmed that if HSBC are voting then they would enforce the 40p in the £ on all creditors they represent.

However if they have less than 25% vote the proposed dividend will apply.

Carl

[cr15py]

This is something I was wondering. Halifax and HSBC were two of my creditors, and both voted through TIX. Therefore, what was separately 61% and 11% of my creditors suddenly became 72%.

Basically, what I am trying to say is that if HSBC and Halifax had voted separately, and HSBC had insisted on the increase as a modification, and Halifax had not requested any increase in my monthly contribution, then my IVA would have been accepted as it was.

TIX seems to me to be a bad thing for people applying for IVAs, because they seem to get more clout in making decisions, and therefore are on more occassions than not going to have the major percentage of debt, and therefore the deciding vote, even though it may be made up of 4 or 5 creditors.

With regards to the fees, they weren't a consideration of mine either. As Emma and Louisa say, they come out of your monthly contribution, so does it really matter whether they get 10% of it or 30% of it? It didn't to me, although I would like to think my IP gets paid well for all the questions I keep asking her!!