settlement help please

[belcroft]

we are in our 14th month of an iva and would like to try to settle our iva, our daughters have offered to help us out. our payments are £232 a month for 60 months with a remortgage in 4th year of £10447 total debt was £52271 with a total of 24367 available for creditors we are paying 29p in the pound and wonder what a sensible offer to settle would be. we are on a fixed rate mortgage which expires in june this year and when we go to normal rate we would be in trouble the ip has said they were not aware of this even though we told them from the start and have said to contact them nearer the time to sort it as they had not come across this before!!!

we have also just had our first review and one of my payslips had 400 tax back which the ip has said i must pay half to them as it is considered bonus, i am a little puzzled with this as it is not bonus or windfall as surely i have already paid this to the taxman only to get it back this tax was paid before the financial year of the iva started.
sorry for all the questions but we are not sure how all the legal jargon works.
andy

[MelanieGiles]

Hi belcroft and welcome to the forum

I suggest that you ask your IP to provide you with a settlement figure, but it may be difficult to persuade creditors to accept an early offer now if there are no good reasons for this - ie affordability difficulties. This is because they may see some benefit in waiting to see if the property market increases and thus the equity in your property might increase.

Having said that there are benefits to creditors of receiving their money early, and I would suggest that you put forward an offer which gives them at least the dividend level they originally agreed to.

With regard to the tax rebate, they are probably right but do check the wording of your IVA proposal and Chairman's Report carefully to be sure.

Good luck and let us know the outcome of all this in due course.

[belcroft]

thank you for the welcome, the problem we have is that my wife is highly unlikely to be able to return to work due to long term ill health (the iva says she MAY return to work and make payments on top of the current amount).Also the mortgage we have will increase by at least 200 pounds, when we come off the fixed rate tand go on to standard this will blow us out of the water as far as income versus outgoing and this would lead us to probably go down the bankruptcy route. i would rtaher not do this as before the iva we had excellent credit rating and the main reason for getting into debt has been the ill health of my wife who earned far more money than i did.

[MelanieGiles]

Seems to me that you have good reasons there for making an offer of early settlement, so see what your IP has to say. Do your daughters have a limit to the amount they have available for you?

[belcroft]

working on the original money available to creditors of 24k, they could just about scrape that amount together. Would we still be expected to remortgage the house or if we offered a FF would we be done paying the iva? i have seen reference to the ip being able to claim money back after the FF has been paid.

another question, what are the fees we would be expected to pay as they seem to vary wildly reading some cases, is it the total fee(nominee and supervisor) divided by 5 or do they have minimum figures that they can charge us? the total costs we have listed are nominee 3250
supervisor 4250
bordereau 228
DOTI 30
VAT 1313

leaving from the total monies available of 24367, 15296 net funds available.

this is so flippin confusing..lol

[MelanieGiles]

Not sure what you mean about IP claiming money back after a full and final settlement has been paid? If you offer a full and final settlement you get exactly that.

You will need to check with your own IP reference their fees - which seem very high at £3,250 for a nominee's fee, less so for the supervisory costs. Also find out if they will intend to charge a variation fee, as this will also eat into the amount eventually available for creditors.

[belcroft]

Sorry to be so vague, but i am sure i read that after the iva has finished the creditors can still claim some cash back within 6 months ie if we win the lottery, or did i just dream that one lol.

just had our first yearly statement and it reads, we have paid 2784 to date of this 30 to sec of state
bordereau 19
nominees fees 2096.27
legal fees 40
vat 366.84
leaving 232.05 balance.

So basically we have not paid any money to the creditors just the people who have set it all up.
which brings me to the question, do i just make an offer of around 24000 or do i minus this years payments ...

my head hurts now..lol

[MelanieGiles]

I think you have been at the cheese late at night again!!! Once an IVA has completed there is no comeback even if you are lucky to win the lottery.

It is quite normal for your IP to receive their nominee fee first, and I would get your IP to work out a settlement figure for you based upon achieving the dividend originally offered.

[belcroft]

As you advised i have just spoken to the IP. he seems to think a settlement of £18,500 should be about right, and has asked me to put it in writing with proof of the monies available from my daughters.

From the overall (approx) £9,000 nominee and supervisors fees appparently, he worked out we could minus £2,600 (approx) because of settling early. Does that sound about right?

To be honest i am a little suprised at the amount he suggested of £18,500. I thouught it would be nearer the £24,000 mark.

The IP thinks we have a good reason for an early settlement due to my wifes illness. He also thinks it should only take about 3 weeks, isnt that a little optomistic?

[MelanieGiles]

Follow your IP's advice. He/she has detailed knowledge of your case and it would be unwise to follow others. But for the record it is a sum I would be prepared to present.

[Adam Davies]

Hi
Sounds promising.
Going back to your queston regading your IP claiming money after your F+F is agreed,I think that you are referring to the timescale between the proposal being accepted and the IVA being concluded.If you have a windfall during this time then it would be payable into your IVA.Once your IVA is concluded and you have your certificate then no further claims can be made
Good Luck

[belcroft]

Hello Andy, yes i think thats what i meant. Lol! So the secret is to get the certificate as soon as possible and dont let the IP drag their heels at closing the file. We are with 'Accuma' and to be honest they havent be very communicative at times.

Can i say thanks to both yourself and Melanie for your help and advice, keep your fingers crossed and i'll let you know the outcomes as they happen. Our daughters are moving the monies at the moment so they are all in one place to show the IP, instead of scattered in bonds and accounts all over the place.

[MelanieGiles]

The very best of luck to you - and what kind daughters. Do let us know how this progresses over the next couple of weeks.

[belcroft]

We are currently in the process of getting the monies together in one account and have looked over our recent yearly review and we found this in the document.

"The debtors statement of affairs provided for total creditors claims of £52,271. Claims received to date amount to £11,927. However, there are five creditors who are still to submit their claims. At the date of approval of the IVA these were estimated to be £39,527. Estimated total claims are therefore £51,454. If you have yet to submit your claim, please can you do so as soon as possible"

Will this hold the procedure up at all or is it normal for this to happen? Sorry for all the questions, but we can now see a light at the end of the tunnel and dont want to drag it out any further than is really needed.
Thank you for all your help.

[Adam Davies]

Hi
Your IP should chase these prior to your variation meeting,however as long as your original debts were accurate then all should be fine with the meeting.However do chase your IP as this may slow up the closure of your IVA.
Speak with your IP about your concerns