Modification query -please.

[aragorn]

Hi,
If a modification states 'failure to pay unsecured non preferential creditors a minimum dividend of 50p in the pound shall be deemed a default of the arrangement'.

Does this mean that it we cannot pay a 50p dividend the IVA will definitely fail .Due to redundancy a new job may mean a £6,000 pay cut as there are not any jobs about for the same pay.

Two years in(never missed a payment) and we could start seeing the light at the end of the tunnel, we really cannot face another 5 years again so are seriously considering bankruptcy if IVA fails. Never been so scared!

Thankyou for the advice.

[carlmcmullen]

Hi Aragorn,

If your circumstances have changed significantly then your supervisor may want to consider a variaion meeting to reduce payments - which basically means he/she will go back to creditors with another payment offer.

Providing your offer is realistic and an IVA is still appropiate then i would not see why creditors would reject.

How much are you currently paying to your creditors ?

[aragorn]

Thankyou, £727 per month.

[MelanieGiles]

In essence the modification does mean that if the dividend of 50p is not achieved then the arrangement fails, however as Carl has already pointed out this could be overridden by a subsequent variation to the original terms.

In my experience creditors tend to lose interest in an IVA once it has been accepted, and generally so long as your variation indicates that you are making the best offer available, rather than merely wanting to end your IVA earlier, there ought to be a good chance of acceptance.

[aragorn]

Thankyou-will try our hardest to get same pay but will take the first job offered before the mortgage payment and Iva payments arrears get too out of control!

[MelanieGiles]

Absolutely - your family and home are far more important than paying off a few debts and must have the ultimate priorities.

Good luck in your search for employment.

[ianmillington]

A couple of years ago one of the creditors reps was proposing modifications solely along the lines of an arbitrary minimum dividend of 50p in the £ without seeking any increase in payments to achieve it! As a consequence there was a risk of failure from day 1.

Can I add that you should chat this through with your Supervisor. If you've been compliant for 2 years ought to get a sympathetic hearing.

Ian