Hi,
Myself and my partner both had IVA''s approved in Sept/Oct 2007. We voluntarily surrended our property to Northern Rock and moved into rented accom.
Payments to the IVA were to commence upon the sale of the house once the shortfall to First Plus was known.
The house still remains unsold and has been reduced in price.
We''ve just had a letter from the IVA company along with their annual report stating that it''s likely, given the current climate, that creditors at present would receive a dividend of no more than 19p in the pound (terms of arrangements were for them to receive 39p in the pound).
The letter then asks that we consider "whether to terminate the arrangements or seek to vary the terms".
What does this mean?? Would us agreeing to terminate mean they would declare us bankrupt? Or would it simply release the creditors back to dealing with outstanding debts direct with us?
We''re feeling very confused and unsure which way to turn!
I am not sure why this constitues a failure of your IVA - unless you guaranteed a minimum dividend payment which your IP does no longer feels can be achieved.
The higher claim anticipated from First Plus would have the same effect in an alternative bankruptcy, so if there is no minimum dividend requirement the facts are what they are.
I think you need to discuss this further with your IP, and I am a bit suprised that no-one has called your firstly to discuss this.
Are you saying that your IVA was put forward on the basis that you would only start making contributions when the property had sold? Tell me a little more about the way your proposal was structure and I can probably try to help.
That sounds to me like an IVA which was set up to fail from the outset. Very difficult to determine the realisation of an asset in terms of timescale or amount released following the sale, and therefore it ought to have been presented on the basis that no minimum dividend could be guaranteed.
I think all your IP can do now is advise creditors of the situation and seek an extension of time for the property to be sold, but this can clearly not be openended. Is the property being marketed at a realistic selling price, and is the agent aware of the need for a quick sale?
The property is in line with the market and area - it's recently been reduced by £25k!!!! Not sure whether they're marketing for a quick sale or not - it's in the hands of Northern Rock.
The IVA company has been pressurising me to commence payments all year ever since we surrended the property. I've resisted based on the fact that not all the figures are known until the property is sold. Why would I start paying into something that could potentially fail??
With the way the market is going, there may even be a potential short fall to Northern Rock for the mortgage!!
Where do I stand with regards to the recent requests for ME to submit alternative proposals?? I'm pretty sure I paid attention when I was at school but must of missed the day when we had the Insolvency practioner exam?!
And what exactly is meant by "termination of agreement" and what does it mean for us and our debts??
If you agreed to sell your house and move into rented accomodation, and you have surrendered the house instead, I do not understand what is stopping you now making the payments into the IVA - unless they have become unaffordable and they need to be varied.
If you feel unable to submit a revised plan to the IP, why not arrange to have a meeting with him/her to see what can be done. I am sure that this would be beneficial for both sides, in an attempt to avoid a failure of the arrangement.
If the IVA is terminated, you will be back to looking at either bankruptcy proceedings or debt management as alternatives.
Who in their right mind would start making contributions into an IVA when the full extent of debt is not known???? Let's say I'd started making the £410 contributions back in January - I'd now be over £4500 lighter and facing the prospect of STILL not achieving the right pence in the pound!!
It's being stupid with money that's got me into this mess! I'm not about to start throwing more money down the drain.
Unfortunately, approx 200 miles prevents me meeting the IP, added to the fact that they can't even reply to my e-mails suggests they're highly unlikely to even turn up!
If I sit tight and do nothing, will they advise the creditors that the agreement has failed and seek to declare me bankrupt?
Me thinks they're more likely to cast me back to the vultures. After all, the only contribution they've had from me is £380 which was deducted from my account PRIOR to the creditors meeting!!! I should of taken note then!
This doesn't even come close to paying for 2 bankrupts - unless Gordon Brown decides to use the proposed hike in alcohol prices to fund "BOGOF Bankrupts"!!
You never know - I might even get a reply to my e-mail tomorrow!
