KPMG

[catullus]

An interesting development which I would like to share with the board and perhaps give an insight in to the difficulties that IP's experience on a daily basis. It also is a cause that I believe that IVA.co.uk should take up on behalf of the IVA community.

Today KPMG voted against a proposal that I had put forward on the grounds that the household budget was "unsustainable". The reason for this view was that the budget was drawn up on CCCS guidelines which, as I already know, KPMG think are " ridiculous"

The creditor spread in this case was such that no particular creditor had voting dominance and so, in drafting the proposal, there was no one particular set of criteria that I knew that I had to follow.

The major issue in the proposal, however, was that the wife was severely disabled and to accomodate the wife's disabilities the family had obtained a large loan from Picture in order to fund alterations to the house to accomodate the wife's diabilities.

Unfortunately this meant that more than half of the household income was spent on property costs and was in significant negative equity but, given the special needs of the family, there was no alternative such as selling the house. Having discussed various family budgets with the client, they were more than prepared to commit to the CCCS budget to make the IVA work.

Every other creditor that voted, did so in favour of the proposal but KPMG's vote blocked approval. In discussions with KPMG they have reiterated their rejection of CCCS expenditure guidelines and, I was shocked to be told, had not read the client history in the proposal so did not understand the particularly special needs of this family, which by the way included 5 children.

I am absolutely hopping mad about this and, if potential IVA clients feel that their IP is manipulating their expenditure budgets unnecessarily, perhaps this story will give an insight in to the pathetic attitudes that some voting creditors ( and yes I mean you KPMG in this instance)bring to bear and which IP's have to accommodate.

I was also told that KPMG had no voting instructions from their clients and so were exercising their own discretion. Like the good IP the board knows that I am (!) I have demanded that they put this case to their individual clients and if they do not do so I will.

It's worth noting in this pathetic story that a number of KPMG's clients actually refer debtors to CCCS for debt management so one has to question where on earth they think thay they have the mandate to reject a proposal based on CCCS guidelines.

Don't get me wrong, if I could have included a larger household budget I would have done so but for the fact that the client, for very understandable reasons, insisted that they had to continue living in their current house.

And to top it all, the husband is one of the most regulat guys you could wish to talk to and works in an essential service that, believe me,you would be pleased to see if in need.

The irony of all of this is that this voting attitude positively encourages these clients to petition for their own bankruptcy in order to buy out their negligeable beneficial interest for £1, yet the clients genuinely want to avoid doing this and want to make a decent offer to their creditors.

IVA.co.uk? KPMG need to be asked why they don't support CCCS guidelines (and this is not the first case like this I have had, but the most deserving) when their clients are more than happy to recommend CCCS to debtors who are struggling to pay.

I'm hopping mad about this, if it wasn't obvious!

Your thoughts, as a forum, would be very welcome.

[Lisa2009]

Stories like that sadden me when theres genuine people trying to do the right thing by their creditors.
I really hope you can get this one sorted. I can relate to the NEED to stay in their own home. Theres 1 disabled adult in our house and 2 disabled children.

mrs skint

[MelanieGiles]

This is a further demonstration of the continuing differing opinions of the four key voters - KPMG, TIX, GT and Eversheds - at a time when we keep being told that they are all getting together to come up with common policies. And wasn't the BBS protocol supposed to address this???

Personally, I would not hesitate in contacting creditors directly if I thought they should be made aware of an issue like this - and moreso I have done this on a number of occasions. I agree with KMPG that the CCCS guidelines are ridiculously harsh, and why lenders are so reliant on them is absolutely irresponsible in my opinion, but we as practitioners are stuck with it - and as you and I know there are a lot of people who genuinely do not wish to declare themselves bankrupt - your client being a prime example.

I have, very reluctantly, been obliged to now use the CCCS guidelines when advising clients, as we were getting far too many requests for contributions increases - but I am absolutely convinced that this will increase my failure rate over the next couple of years.

Do you have a client relationship manager at KPMG? I do, and he is absolutely fantastic, although I do not wish to name him by name on the forum. With your experience you probably know the two key players in that team in any case. I would be really having a chat with someone higher up to food chain, who I am sure would be concerned to learn that their staff had not read the proposal.

And finally, I personally and professionally find it extremely frustrating that prior to drafting a client's proposal I have to decide if it should follow a particular voters requirements. Sometimes I think that I really will return to the corporate insovency arena - Leyland Daf is definately not as bad as this!

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

[ellie 553]

The corporate insolvency area could be very lucrative over the next 12 months ! I think we would all rather have you all here helping us though Melanie

[Beechy]

49% Dividend

Client with £75k debt £25k to Northern Rock.

NR votes no, will not listen to any reasoning. Dont have a criteria.

Client did not want to go bankrupt because they felt morally that it was wrong and they did not want to feel the stigma of bankruptcy (although it is not the same these days.

The thing is they have no equity in the property, and no other assets.

I went to there house last night to assist with the bankruptcy papers.

I really do feel sorry for these people there were in tears. I know, like all people who work with people with debt issues we all go the extra mile to help but these people really got to me and we went the extra mile and a half.

Like Melanie corperate might be better, I have 2 pubs and a 50 bedroom hotel which I am dealing with at the moment. May be I should take an emotional break from personal debt

Disappointed is not the half of it





Dave Beech

[Adam Davies]

Hi
Quote " I was shocked to be told, had not read the client history in the proposal so did not understand the particularly special needs of this family"
This is appalling,creditors are dealing with peoples lives here.
If Catullus or Melanie can email me a contact at KPMG I will try and set up a meeting,similar to the TIX meeting that I had.
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Adam Davies]

Beechy
As from Feb creditors,including NR,will have to give reasons for rejection,as part of the new protocol,I for one will be very interested
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[mish1953]

I apologise to the IPs right now - before I rant.

Why aren't IVA's put to an independent arbitrator - say a tribunal with a legal bod ( Judge/solictor ), a creditors member and a citizen rights member . The Ip is there to represent their client, the creditors to represent themselves. Each to put their case forward and the tribunal to decide. The payments set by the tribunal and the whole thing legally binding. Use the OR's guidelines and someone from the OR in attendence.
You could allow an IVA or if insufficent funds a BR .
It seems to me that the current process is loaded in favour of the creditors which results in stupidity like this, hardship, failed IVA, and more BR.

I worked in something similar years ago relating to industrial injuries and compensation, it wasnt perfect but it worked and both unions and employers thought it was fair.


Serious moment over [8D]

I'm off to start packing - house due to be possessed soon !

Slainte
MIsh


Will an automatic discharge hurt.

[Beechy]

I understand that is the case for Feb unfortunatly that has not helped out this individual.

On a different client NR voted no, we did manage to get a reason for this "there were n o arrears on the account"

The reason for nil arrears was the client was using credit cards to make payments. There by increaseing their debt.

Today i was listing to radio 4's money programme and a guy from the FSA said as soon as peoople realise that they a having financial problems they should seek Professional advice.

Does this mean that if some one has a debt with NR they will be told to stop paying them to generate arrears, by the way the arrears dont garuntee a yes vote.

The other concern with NR is there charging order policy when 6 months arrear are hit.

You can see where they are going carn't you, miss payments let thyem get charging order securing there debt and let the other credirors have a reduced dividend.

Wasn't there some one compiling a case for this to challange NR prefing there selves at the cost to other creditors?

Dave Beech

[MelanieGiles]

Don't see how you can say that NR are preferring themselves - the charging order process is there for all creditors to avail of, and they do give customers plenty of warning about such action.


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

[Beechy]

NR appear to be more pro active than most at this course of action.

See Observer sept 30 2007

Dave Beech

[MelanieGiles]

With AMEX not too far behind!

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

[Beechy]

The Obsever newspaper (30 sept 2007)repoted a action against NR with regard to this practice, I wounder what happened, if anything following the demise of the bank.

Dave Beech

[Beechy]

In the bank's half-yearly results in July, Northern Rock's chief executive Adam Applegarth blamed the growing number of 'bad debts" those that it has to write off because they are not being repaid

Its a bit worring when you think the Government has told us our money is save and secure in NR, better send of email to Alistar Darling

Dave Beech