Advised that creditors will not accept reduced payments and will pursue bankruptcy

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Shelley.m

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Post by Shelley.m » Tue Nov 25, 2014 6:31 pm
My husband has had an IVA for over 5 years (due to some missed payments which he's been making up). He had the IVA before we met so as far as I am aware my finances are separate.

Due to a promotion, his wage has reduced but will be beneficial in the long term (he's no longer working shifts therefore not receiving enhanced unsocial pay for nights and weekends).

After submitting his revised income and expenditure the IVA company have advised him that the creditors will now pursue bankruptcy unless he can find a settlement amount. They are not willing to accept reduced monthly payments.

My Grandad recently passed away and I am due to inherit some money. Are the creditors likely to accept a lesser amount than what would have been paid to them had the IVA been paid in full? The amount would have been another £8000.

The IVA company will not give us any guidance on this and have stated that even the full £8000 may not be accepted (presumably due to the reduction of the debt at the start of the IVA). They also advised him that he only has one chance to make an offer and if it isn't accepted bankruptcy will follow.

We rent our home and my husband has a lease car so there are no assets.

Do we offer the £8000 or will they accept a lesser amount rather than getting nothing at all if he is made bankrupt?

If this is declined is there any other option than bankruptcy?

It really upsets me that money my Grandad worked his whole life for is going to settle debts that my Husband's ex-wife deceiptfuly ran up (joint credit cards etc)! So I'd like to pay as little as possible without compromising our financial future.

I'd really appreciate any guidance on this!

Thank you in anticipation.
 
 

Foggy

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Post by Foggy » Tue Nov 25, 2014 6:57 pm
Hi. I am afraid that your husband is already on the back foot by having to make up arrears, so the creditors would, possibly, be less forgiving this time around.

A Full and Final is usually based upon the number of payments still due x the monthly payment. It can sometimes be reduced if there are mitigating circumstances like ill health. However, in this case, I would think an amount close to that due would need to be offered.

The IP is not being awkward in not getting involved with the formulation of an offer, it is simply beyond his remit as you are supposed to make your "best offer". However, he is being awkward in suggesting it is a one off, as you could come back with a better offer (bearing in mind how this would look to the creditors to discover the first offer was not actually the best!).

Bankruptcy will only follow if that is the way your proposal has been written, however, in view of the fact that nothing would be forthcoming from bankruptcy (other than, possibly, three years payments) this could also be addressed in the offer, but with no guarantee of acceptance.

I have, in the past, seen very low offers accepted, but, on the other hand, I have seen (although rarer) offers of the full amount and more refused. It is literally in the lap of the creditors.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
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bobbydavro

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Post by bobbydavro » Tue Nov 25, 2014 7:30 pm
Hi, how many more payments are left on the IVA and how much was the monthly payment to what you could afford now?
Last edited by bobbydavro on Tue Nov 25, 2014 7:31 pm, edited 1 time in total.
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Michael Peoples

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Post by Michael Peoples » Wed Nov 26, 2014 9:05 am
I cannot see firstly why the reduced payments offer was rejected. I can only assume that the creditors were approached and rejected this at a variation meeting otherwise your husband has a right for one to be called. Secondly any offer of a full and final should be based on what his current surplus is and not what he was paying and finally no offer is a once off and can be negiotiated and improved at the meeting.

Your husband should go back to the IP and request a variation.
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Shelley.m

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Post by Shelley.m » Wed Nov 26, 2014 11:26 pm
Thank you for your replies.

There was a variation meeting and this was where the decision came from regarding the settlement offer.

He would have had 16 payments left (due to being an essential car user for work and having hundreds of pounds in repairs over the first few years of the IVA). His income has reduced by £300 per month.

I feel as though we have been mislead as the staff advised him that his new job would not jeopardise his IVA and that the payments would be adjusted and extended accordingly. He may have reconsidered this had he known the outcome!

They also amended the revised income and expenditure form that he submitted in order for his disposable income to be reduced further, they stated that the creditors would then complete the IVA due to the amount he could pay each month and there would be no problems in doing so as he had paid a sufficient amount over 5 years. This call has been recorded and the IVA company are looking into it.

So because there has already been a variation meeting, is it correct that he will only have the chance to make one offer and that even if this is £8000 they may still decline it and pursue bankruptcy?!

Also, should he have received a 'notice of Breach'? I have read about this but he has not received one.

Thank you.
 
 

Michael Peoples

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Post by Michael Peoples » Thu Nov 27, 2014 7:12 pm
He has as many chances as he likes to vary the IVA and it should be settled one way or the other. There may have been no need to issue a notice of breach as the variation would have rectified it anyway.
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Shelley.m

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Post by Shelley.m » Thu Nov 27, 2014 9:24 pm
Do all IVA companies follow the same policies/protocols/guidelines or does this vary between companies?

My husband has been told on the phone and also by email that he only has one chance to make an offer to the creditors.

Do you think this is because the company have their commission now and want to close it for their benefit?

Thank you for your time!
 
 

luluj

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Post by luluj » Fri Nov 28, 2014 5:09 am
I think your husband needs to speak to the IP and not the caseworkers on this - its your husbands right to offer a counter offer if the first is not accepted, however as others have mentioned you should put your best offer forward first.
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Michael Peoples

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Post by Michael Peoples » Fri Nov 28, 2014 1:30 pm
I agree with Luluj that you may get more sense from the IP. All firms should operate the same way and it is your husband's right to put forward offers to creditors.

I am sure the IP would not be happy to see the email that was sent in his/her name!
Michael Peoples | McCambridge Duffy Insolvency Practitioners
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Shelley.m

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Post by Shelley.m » Tue Dec 30, 2014 12:27 pm
Hi again,

The IVA company gave my Husband a deadline of 5/1/15 to offer a settlement figure (fortunately we have this in an email). Today he received a letter from the "supervisor" saying his IVA has failed and that the creditors have been notified!!

He has tried ringing today but they are closed for Christmas until 5/1/15.

What do we do?!!

Any advice greatly appreciated!!

Thanks.
 
 

Foggy

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Post by Foggy » Tue Dec 30, 2014 2:09 pm
You need to lodge a complaint with the Insolvency Service using the Government Gateway at:

https://www.gov.uk/complain-about-insol ... actitioner
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
 
 

Michael Peoples

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Post by Michael Peoples » Wed Dec 31, 2014 6:54 pm
You need to go back to the IP and quote the email that was sent and ask for an explanation. I think you have the right now to escalate the complaints procedure and copy your IP in on any correspondence.

Have you ever spoken to him/her?
Michael Peoples | McCambridge Duffy Insolvency Practitioners
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If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

Shelley.m

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Post by Shelley.m » Fri Jan 02, 2015 1:06 pm
Hi Michael,

No my husband has tried to the IP and also obtain his/her email address but the staff refused! He managed to get past front line staff to a manager but not the IP.

He also sent a lengthy email raising a number of questions and concerns and requesting a response to each point which he still hasn't had a response to!

He will be ringing again on Monday to ask for the IP's contact details.

Is there anyway of undoing a failed IVA if they've already contacted creditors?!

Thanks,

Shelley
 
 

Michael Peoples

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Post by Michael Peoples » Fri Jan 02, 2015 2:05 pm
If the IVA has been failed he could make an application to court to have it reinstated but this would be expensive. It would be better to try and get this resolved if at all possible so perhaps the IP will be able to sort it out.

If he cannot get to speak to the IP he should demand a face to face meeting which is his right and if he is still not happy he should ask for the regulatory body and go to them directly. It is urgent so you do not have time to go through normal complaints procedures and as such a direct complaint may be the only option available to you.

Ultimately if the IVA is failed he could propose another but it would make much more sense for this to be resolved with the current IP.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
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