IVA rejected

[Bengy]

Hi I am new to this forum but have been reading the topics with interest over the last few weeks. I have gone down the IVA route and my creditors meeting was today. After reading yesterdays topics I was fairly confident of success. I did not sleep well last night but I suppose that was expected. However my propsal has been rejected. I offered 85p in the £ and so was suprised it was not accepted. I am to have another meeting in 2 weeks time but there will not be any increase in the offer. My IP wants time to take the matter to a higher authority within the creditors team. I am now seriously considering bankruptcy. However being a widower with 2 young boys and my own property I am very scared of the future.

regards

Bengy

[zoe]

Benjy
Why was your proposal rejected and who by? did they give any reasons?
Zoe

[Bengy]

Hi Zoe,

It was rejected by a company being used by EGG as their nomination.

I do not fully understand the reason why it was rejected. My IP as well is stating it is not usual.

Bengy

[zoe]

I am sorry to hear that!
I thought from posts that Egg were usually ok!
Perhaps because of high divendend? the experts will be better to advise
Chin up - I'm sure your ip will fight your corner have they set another meeting?
Who did you go with practictioner wise?
z

[Bengy]

I thought EGg were OK as well. They had been very suportive up to this pint with them helping me with a debt management plan. It was others who did not want a DMP that stopped thet route.

I am not sure I should state who the IP is as I do not want to prejudice my position at the moment. I am told it should be 2 weeks for the next meeting so I am assuming 27 Feb.

[zoe]

Good Luck hun
and chin up x

[MelanieGiles]

Hi Bengy

Get your IP to tell you exactly why Egg have rejected your proposals so that you are kept fully informed.

I am afraid that there is a lot of adverse comment in the marketplace generally about IVAs at the moment, which is being fronted by a couple of creditors and their representatives. They believe that people like you are being persuaded to do IVA's when they are not really needed, and as you are offering such a high return, it is likely that if you stripped away the IP fees you could probably repay your debts in full over the five year period - so the creditors say why should they take a 15% write off. They do have a point!

Also - Egg have a policy that if you have been making payments to them up to the time you submit your IVA proposals, they will reject on the basis that you are not struggling and can afford to continue those payments.

Let us know if they change their minds - but do be prepared to continue with a DMP.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Bengy]

Thank you Melanie,

It is true, I have (had) never missed a payment on any of my creditors before it hit me I could not repay the monthly payments.

It is very stressful at the moment as I have not paid anything now since October when i was advised to stop paying and change bank accounts. I wil have to wait for 2 weeks now. I suppose the phone calls will start again !!

[MelanieGiles]

As a matter of interest - how much are your proposed monthly payments and how much do you owe to creditors in total?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Bengy]

HI Melanie,

My debts are c£163K. I currently cannot afford any monthly payments. However I own properties which are to be sold. I will also take a tax free lump sum from my pension and then pay £350 per month.

Bengy

[MelanieGiles]

Then I think that Egg are barking mad in not accepting your offer, as they will get a much lower return than would be available in bankruptcy.

How were you maintaining your creditor repayments up until October 2006 - from your property rental income?

If the creditors do not accept your generous offer, I would seriously consider bankruptcy. Your properties are to be sold in any case, and your pension would be then left intact. But let your own IP deal with this as he/she has detailed knowledge of your case and ought to be acting in the best interests of you as well as your creditors.

Don't forget to let us know the outcome and best of luck!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Bengy]

Melanie,

It is a long story as how I was paying each month, my business started to fail and I was made redundant from my full time work. Stupidly I carried on funding from my credit facilities hoping for a turn round in fortune. I am now fully employed in a well paid job but not sufficeint income to fund my creditors. The property sales are not straight forward either as they are in contracts preventing immediate sale. They are to be sold over the next 4 years. Hence I am giving lump sum payments when the funds are available and monthly payments when I receive my pension. The lump sum from the pension is also failly large. With all the sales and lump sum the ammount owing is less than £13k (not including IP fees)

Bengy

[MelanieGiles]

Bengy

What are the penalties is you sell the properties earlier?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Bengy]

Hi Melanie,

My case is interesting so my IP tells me. I cannot sell the properties as I have a legal agreement with a housing association that prevents any sale during the term. Of course there may be an option for someone to buy the properties but at a reduced sum as they would also be in the agreement. If I have to go bankrupt I will stop paying the mortgages and let the courts deal with it. The creditors will then not recieve as much as if they left them for the full duration. One of my properties is currently for sale and under offer another finishes the agreement in less than 2 years the other is four years away fronm the end of the agreement.

Bengy

[MelanieGiles]

Yes it is indeed interesting - but it represents a good offer! Have faith in your IP who seems to be doing a good job for you. If the creditors still refuse to accept the merits of your offer, then they deserve to get a much reduced return under bankruptcy proceedings.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk