Modifications

[catullus]

Melanie

Have you found yourself recently wading through more and more mods trying to work out how they fit together and, quite often, concluding that they are contradictory and that one creditor will have to drop some of their mods, particularly TIX v KPMG?

In fairness to TIX, on one occasion they have dropped a mod for us but in the last few days, on a separate matter, they refused forcing us to jhave to go to KPMG to ask them,and we're awaiting a response. It's the mod regarding reduction in contributions (which between the two of them conflict) and if KPMG don't back down, a perfectly good IVA will fail.

Now isn't that daft?

And my other gripe is that some of these mods (everyone included) appear to have been written by first year clerks as a bit of a training exercise. All well and good until in year 3 you as the IP have got to make some sense of them.

This really needs to get sorted, and soon. I'd be interested to hear of your experiences on this because in the last 2/3 weeks the problem appears to have grown considerably.

Apologies for the geek speak to non IP's!!

[MelanieGiles]

Not really more so than before - but we rarely get modifications from KPMG other than the property and fees ones - and I've been dealing with contradictory modifications for the last 10 years. I think our record number of modifications per proposal runs at 143 and that was this year!!! Of which 142 were probably not relevant or already included within the proposal and T&Cs.

It is about time these voting representatives got together in a padded cell to be locked in until they get consistent agreement on what they want. Personally I have few problems with the TIX new protocol (well I don't like the low nominee fee if I'm honest but it is swings and roundabouts) and find the dwelling house, income flexibility and default provisions quite useful. The key will be if any of the others seek to fee cap, which in fairness TIX have said they will not do, but no news yet from the other major players.

My big beef is that TIX indicated that they would possibly reduce the 40% hurdle rate if IPs complied with their protocol - guess what? we tried two and they refused to accept a lower offer even though the proposals were good ones. Had to bring in third party monies in one case, and extend by a year in another just to get acceptance. I gather that this is under review and may change in the future.

I don't know what has happened with the big BBA/DTI initiative, but we need to get things sorted out soon because I agree with you there are some strange voting decisions at the moment.

And when will they all leave us alone to get on with the good stuff of assisting credible debtors to put forward viable proposals. I've been quite pleased that IP's have been out of the media spotlight over the last couple of days, where focus has been elsewhere in the financial marketplace!

If you want a natter (or a gossip or a moan) you have my details - feel free to call or e-mail. It is good to network with fellow professionals and see what is happening within other areas of the profession. One of my other IP pals called me today with much the same gripe as you, so maybe my turn is nigh!


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

[catullus]

I don't understand how you don't get the KPMG/TIX mods on reduction of contributions.Your proposal can't satisfy both. TIX will allow IP flexibilty down to 15% but, from memory, KPMG require a creditors meeting if the dividend will drop below a certain amount.

To me this means that you cannot agree to have the two mods in, and your proposal has to choose which one you run with.

No need to reply. I'll call you tomorrow to chew on this and other matters!!

[Adam Davies]

Hi
Reading between the lines are TIX allowing the IP flexibility in accepting lower contributions upto 15% of the monthly contribution [at the IPs discretion]? If so it is a step in the right direction.
regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[catullus]

One of TIX more sensible innovations but some of their other mods are just plain daft (and I'm not just talking about fees!!)

[Adam Davies]

Hi
Can you give an example ?
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[catullus]

Modification that says that you are limited to a remortgage of 60% of your monthly contribution (sic)

ie if your monthly contribution is £500 you are limited to a remortgage of the equity of £300 even though you might have equity of say £100.000.Lucky person in 5 years if this md has been allowed to get through today.

What they actually mean is that the monthly cost of the extra remortgage should not exceed 60% of your monthly contribution, but that is not what the mod that I saw today said.

You may well agree with the sentiment,although I'm not sure that I do, but its the damage that these clowns are causing to the smooth workings of IVA's that annoys me.

Can't remember any more at the moment but I'll try to remember to post on this tomorrow

[Adam Davies]

Hi
So the mod reads that the TOTAL remortgage monthly figure must be no more than 60% of the debtors disposible income [iva payment] rather than the EXTRA remortgage cost should be no more than 60% of the debtors disposible income. ????
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[MelanieGiles]

I have taken the view to incorporate their suggested protocol into my standard proposals, where there is a significant TIX voting presence. Less hassle and limited modifications. I actually find the wording of the dwelling house sections quite clear and helpful.

And I have checked the KPMG mods we usually get and there are only three - I have not had the one disallowing lowering of payments for some time, so do not have a conflict with TIX's modification re this, where again I have incorporated this into my proposals as it is a helpful clause for the debtor.

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

[Adam Davies]

Hi
I welcome both the modification to allow for reduced payments upto 15% without the need for a variation meeting and also the modification for the extra mortgage payment,following the equity release to be no more than 60% of the disposible income.
To be fair the main TIX problem seemed to be the IP fees making low monthly payment IVAs unviable for IPs to consider.Does anyone know if this has had an affect ?
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[MelanieGiles]

Andy

There are firms who are refusing to take on cases where contributions are less than £400 per month and TIX have >25% of the vote. We are not one of them, but do support the view that IP's should be allowed to set fee levels based on the work required by each individual case, and not on a global basis!

If a client is still suitable for an IVA, and is committed to a long term repayment plan, then I do not propose to deny them that opportunity. I rather suspect that things will settle down shortly, once we get the much longed for BBA/DTI guidance which was expected in July!

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

[catullus]

I was going to post more on this but unexpectedly I've not been in the office for a couple of days so haven't been able to get hold of a full list of TIX modifications.

It may sound as though the TIX mods are very reasonable Andy and like Melanie, we are adopting the TIX protocol simply because, as they are now all pervasive, we've not got much choice.

On a closer inspection of the mods, however, there are some serious restrictions. Remortgaging in month 54 effectively removes the ability for the IP to structure an up front F and F remortgage offer and we don't yet know how they will vote on this if we structure a proposal that way.

The cap on the disposable income to be used for a remortgage sounds sensible, but if it is coupled with minimum threshold requirements, that's not quite so welcome, is it.

They have also now introduced a 40% cap on fees, which on the face of it may seem sensible, but it stops us making a really good profit on the higher DI IVA's to effectively subsidise the lower ones. Consequently the fee cap is now kicking in and we are effectively having to turn down IVA's with less than a DI of £250 dependent upon who the creditors are. Their fee structure also makes it almost impossible to propose stepped contribution IVA's where contributions will rise as HP contracts etc expire because the nominee fee is geared to the opening contributions.

Giving the Supervisor the 15% contribution discretion is sensible but we did have KPMG voting the other way and for several days neither of them would back down. We did eventually get one of them to do so but for reasons that I can't really go in to, but it was nip and tuck and you can imagine how the client felt whilst all this was going on.

I also have an issue with some of the loose wording that has been used in their protocol but without the wording to hand I'm afraid that I can't remember the particular issues at the moment but I do envisage problems on this in the future.

And with all of this going on we are continuing to have to grapple with the completely unreasonable voting positions of NR and MBNA which now turn a clients prospects of getting an IVA accepted in to a lottery, dependent on what your mix of creditors is.

For anyone reading this and thinking of doing an IVA don't be disheartened, we are getting plenty of our clients through but often not without a great deal of additional work and soul searching, often on the part of the IP, and in these difficult times it really does pay to consult an IP like Melanie who both understands the process and will treat your case with the care and attention that it deserves.

Commission cheque in the post on Monday, Melanie??!!

[MelanieGiles]

Thank you for those kind words, Catullus - and I had not picked upon the the 40% fee cap despite their assurances that they would not seek to cap at all!

But I guess the maths still enables a good return on higher disposable income cases. And I certainly agree with you that times are getting harder at creditors meeting - but I think that just gives us a lot more job satisfaction getting the cases through.

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

[Adam Davies]

Hi
The thing that strikes me from someone on the outside is the complexity of it all.It almost seems to be a mine field with an IP having to read the situation and structure the proposal in a certain way to keep many people[creditors]"happy".It also seems to be more time consuming,totally the opposite to that proposed by TIX as one of the benefits.
Can you imagine an IP in a large volume processor[better not say factory]having the time to fine tune and negotiate in the way that both you and Catullus seem to ?
I can,t
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[MelanieGiles]

Perhaps that's what makes us different Andy!

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