proposed iva

[gobbin]

hi
we are in the process of having our iva drafted and have been asked by the ip to 'freeze' our pensions for the duration of the iva. i am not able/ reluctant to do this as i work for the nhs and my superannuation contribution of £150 per month also provides the only life cover i have. we have a young family and this is impoprtant to us. also, i am 44 and will retire at 55 due to my type of work, so to exclude 5 years from my pension at this stage would be disastrous for us. is this request common with an iva? it is possible to opt out of the nhs pension scheme, but if i do this, i will leave my family exposed if anything happens to me. any advice is gratefully received. gobbin

[accgroup]

Hi Gobbin

Your IP can suggest that you should freeze your pension contributions in order to maximise your contributions to creditors but you are under no obligation to do this unless you agree. This is also something your creditors may request - so if you propose to continue contributing into the pension throughout your IVA your creditors may put forward modifications at the meeting of creditors asking that the pension contributions be frozen and any increase in income be paid into the IVA - however you need to accept this modification for the IVA to be approved.

I would discuss this matter further with your IP to see if there is any reason he is suggesting you freeze your contributions before putting the proposal forward.

Hope this helps


AccumaGroup - A large insolvency practitioner service based in Manchester.
www.accumagroup.com

[MelanieGiles]

Hi there

I certainly would not expect you to put your pension contributions on hold given your age, and in my experience this is rarely requested by creditors.

How much are your total debts, and how much disposable income are you able to offer to creditors on a monthly basis assuming that you carry on paying into your pension scheme?

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

[gobbin]

hello melanie

thanks for your reply, we owe a total of £68000 and have around the £400 figure available as disposable income for our credeitors although the person drafting our proposal said that they would be looking to offer around the £490 mark. this shocked me a bit as i have worries about what will happen if say for instance mortgage rates shoot up (which they appear to be doing)or something else happens that in turn puts pressure on our ability to pay the iva. we are both in secure jobs within the nhs and are really quite stressed out by this whole thing. i have worked out our income /expenditure carefully using national debtline format and can see that the ip is trying to maximise the chances of the proposal being accepted, but at what cost to us. we are terrified of the consequences of the iva proposal failing, and losing our house.

thanks gobbin

gobbin

[MelanieGiles]

To achieve a minimum dividend of 25p in the £, based upon the charging scale I use in my practice, would require monthly payments of approximately £425 per month - but please don't use that as a guideline as other IP's may charge more or less, and at the end of the day if all you can afford is £400 you should not agree to pay either £425 or £490.

Your are absolutely correct to be considering interest rate rises, and must take all contingencies into account. Why not take a second opinion from another IP to see how the advice differs?

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

[hara]

how about increasing period of contributions to an extra yesr?is it acceptable?

hara.

[MelanieGiles]

Possibly - but most practitioners and creditors would prefer to see a maximum five year period.

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