Pension payments in IVA

[ian_ngfl]

Had IVA accepted this week at 75p. One mod required is that both myself and my wife opt out of out pension schemes with those payments going into the arrangments. Not too happy with this as we would also lose our employee contributions into the pension scheme. With pension payments in the arrangment offer is likely to 95p ish.

Do I have to accept the modification? Could we offer one pension?

A quick response would be helpful!
Thanks

[catullus]

A creditors meeting either acheieves a result or it must be adjourned.If you had your IVA approved this week then during the meeting, you must have been consulted about this modification by your IP and presumably you indicated your acceptance.

That being the case, there really is no going back.

The alternative is that the vote cast by the creditor who proposed this modification was not required to acheive the 75% majority and you should have been advised of this fact and elected to reject the mod.

All in all I think that it is likely that you did require the creditor to vote positively and so would have to accept the modification that they wanted.

If that is correct then if you choose now to sign the minutes of the creditors meeting to confirm your acceptance of the modification then the IP will have no option but to confirm that the IVA has failed.

In the meantime the modification is not that unusual and frankly, in my opinion, not that unreasonable although you are being asked to pay a high dividend.

[ian_ngfl]

Thanks for your response. The creditors meeting was on Tuesday, so when I was told it have been accepted and told what the modifications were I assumed that it had gone through OK. based on what your saying it is accepted subject to agreeing the modifications. Probably my misunderstanding in the heat of the moment. Indeed, I do need the creditors (RBS and HBOS) to take me over the 75% so did agree in principle (on the phone) to it on Friday, but just wanted to see if there were other options. Based on what you are saying it seems the acceptance is the only option.

Thanks again for your prompt response.

[Adam Davies]

Hi Ian
Again it seems to come down to poor communication from your IP.Did they explain this modification to you at the time of the creditors meeting and was it a modification from a creditor that held a deciding vote on the day ?
Some people have their pension contributions stopped and diverted into the IVA and others do not and again it seems to come down to the ceditors on the day.
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

[ian_ngfl]

Thanks Andy.

I think the words were 'the IVA has been accepted, but there are some modifications requested'. I don't think the words 'accepted subject to.......' were used. Or if they were, I didn't pick up on them.

I'm a realist and know that at the end of the day I owe them the money and have pay them as much as I can. As long as this is a reasonable request on their part, and not out of the ordinary, then I can accept it.

Must admit, whilst I've been frustrated with myself for allowing us to get in this situation, this is the thing that has really struck the implications of 'out of control' debt home to me.

Thanks

[hara]

How is it that your IP proposed such a high dividend in the first place?

The minimum is 25p most of cases vary from 25 to 40p.

You are almost paying 100p in the pound.

Seems a very,very un fair deal.

Did you not question the original offer of 75p in the pound?

Who is your IP?

hara

[ian_ngfl]

75p is what were deemed to be able to afford having taken into account our living expenses etc. We'd already changed our mortgage to interest only to allow us to get to 75p. Because we were already offering 75p that's why I was more frustrated about throwing the pensions into the pot as well!

IP is Grant Thornton

[Adam Davies]

Hi Ian
Even if you end up paying 90-95p dividend you have still saved all the interest charges etc and you will no longer receive any phone calls or letters.
If your circumstances change within the five years and you pay more into the IVA then once you have paid the original debt and IP fees plus possible interest[8% per year] your IVA will complete early.
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]

This might be useful information.

IVA legislation requires the IP to file a report at Court within 4 days of the meeting explaining the outcome and who voted how. That's why I said in my earlier post that you can't really change your mind from a verbal yes to having to confirm that yes in writing, the reason being that the IP will already have taken a critical step in confirming the outcome of the meeting.

At the time of the meeting each modification should have been gone through individually and explained to you with the IP also explaining which creditors votes were required to get the IVA approved.

For what it is worth, my practice is to require the person going in to an IVA to confirm their acceptance of the IVA and mods in writing by email or fax before I file the report.

What Andy has said about your IVA is correct but it shows what you have to do these days to get an IVA through. At the end of the day you pay in to an IVA what you can afford, not the least amount you think that the creditors will accept and the days of writing off 75%are pretty well gone.

I do hope that you feel that you can manage on the budget that you have been given and, if so, at least you have the peace of mind that at least the creditors are now off your back and you have a clear path to getting your financial position back under control.

[ian_ngfl]

Thanks both for your comments. All through this process we have been committed to paying off the debt in the best way we can and it certainly hasn't been a 'what can we get away with?' approach. Therefore, if we can afford to pay the whole of the debt off during the 5 years then so be it, after all that would be the right thing to do anyway.

Reality is, we have no choice but to manage on what we've been given!

[Rainbow]

Hi - Very interesting - We are about to receive our proposal from GT (We have been waiting since May 1st!) At no time have they mentioned to us that we may have to stop our pension!!!
That will be interesting!
I hope you get yours sorted and if amendments are requested for ours I think I will ask for it to be adjourned whilst we decide instead of making an 'on the spot decision'
Thanks for the post.
Rainbow

[ian_ngfl]

GT are not the fastest. Our initial discussions took place at the beginning of April and we'd sent all documentation by the 28th April. Constant chasing seemed to help speed it up, although I still think they work at their own pace!

There had been no mention of the pension payments at all during any conversation we had with with the CCCS or GT, so it was a big suprise when it was in the mods list.

The adjournment may be a good idea to give you time to think, to be honest I didn't realise I was making an on the spot decision, but there we are, I don't think we had any other option any way. The important thing for me is to get accepted and focus on the future.

Make sure you check the draft proposal in detail when it arrives, there were a number of things on ours that weren't correct.

Good luck!

[iva experts]

Hara - although Ian's dividend seems unfair, you have to remember that in an IVA the individual must pay back as much as they possibly can.

Due to an IVA being based on an individual circumstances, some people can end up paying back 100p/£ plus I.P fees plus statutory interest. There is no limit to what is paid back, its all based on what you can afford.

Best Regards. IVA Experts

[hara]

But completing IVA is not the end of the matter.

What is life is left aftr IVA?

In this instance the concerned are losing their pension contribution hence getting less on retirement.

hara

[Adam Davies]

Hi
I think that in most IVAs the creditors are writing off a large proportion of the debt and not being able to pay into your pension for five years is a fair deal.However in Ians case where he is paying 95 percent of his original debt plus IP fees you have to weigh up the pros and cons of an IVA and seriously consider a DMP.
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