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Hi

I am in year four out of five of my IVA and a family member has offered to loan me £6,500 on the condition it is used to end the IVA early.

I have notified my IVA Manager who has now sent a draft circular for me to sign in order that a meeting of creditors can be called.

I am really nervous that the creditors will turn down this proposal. I will include some details here and would really really apreciate a comment on whether in your experience this has a reasonable chance of acceptance or not.

The substance of the initial proposal was that I would pay the supervisor £281 over a period of 60 months - a total of £16,860 over 5 years.

The proposal contained an estimate that after the costs and expenses of the supervisor had been provided for, there would be a dividend to creditors of approx 21 pence in the pound.

In the 37 months since the initial meeting of creditors, I have forwarded a total of £9,552.30

The loan of £6,500 will make the total I pay back £16,052.30. I am worried because the total I am offering is less than the total initially agreed but my family are not in a position to offer more than £6,500.

The circular also states

"Whilst it is entirely a matter for creditors to decide whether or not they will agree this amendment, we would comment that it is estimated that following the payment of outstanding fees and expenses of the Supervisor, creditors could expect to receive 15 pence in the pound in full and final settlement of their liabilities. In addition, there will of course be a far earlier distribution to creditors than if the arrangement continues, as planned, until August 2009."

I am concerned that the initial estimate of 21 pence is now 15 pence.

I would appreciate any comments you have as I don't want to get my hopes too high if there is only a slim chance this will be accepted - thank you in advance for any comments.

Not sure if it makes a difference but the large creditors are:

Egg - 32%
Student Loans Company - 15%
Max Recovery Ltd - 34%

Have you checked the amount of creditors that the Supervisor has agreed and compared this to the original amount of debt that you had? This might explain the dilution of the dividend,

the only other possibilty is that your Supervisor has charged much more than was originally provided for.Going back 4 years its entirely possible that the IP's fees were based on time costs and were not fixed, allowing him to charge more than was anticipated.

Regardless of all of that it is still a good offer based on where you stand today, but increased IP fees and extra creditors could undermine it.

Hi
Catullus is right.You are only £800 short of the original amount agreed and this should not make a 6p dividend difference.It is more than likely IP fees based on the open cheque book[sorry,time costs]charging of the IP.
You may find that the creditors will cap the IP fees at the variation meeting.
However I feel that your offer will be accepted as you are contributing,give or take,the original amount and creditors do seem to favour early settlements.
Good luck
Please let us know how you get on
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

The up and coming creditors meeting is obviously very important to me and the possibility I could be debt free within a month is just an amazing feeling. However, because of the importance of this to me, anxiety that something will go wrong is very high.

Do you think I should be more proactive in finding out why the amount has gone down from 21p to 15p?

I feel like I should sign the circular and return 1st class becuase that will enable the creditors meeting and the possibility of a successful completion within a month.

On the other hand if there is a reasonable chance the offer will be rejected as a consequence of this reduction, maybe I should investigate the course of this before signing the papers.

I would really appreciate your view on the way forward on this one.

I would also like to say what an invaluable resource this site has proved to be. Thank you

I certainly think that you ought to be aware of why the dividend has dipped so much Richard. Can you not talk to your IP tomorrow to find out what has happened before you sign the documents? To be honest you and your IP ought to be working together on this matter and not in isolation.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

Thanks for your advice Melanie. I contacted my supervisor today and as has become standard practice they were very short with me and I get the feeling they think I'm a bit slow.

Eventually I found that the decrease was due to an increase in the amount of debt at the initial meeting and the £800 I am short.

I am now extremely nervous that this offer will fail as the supervisor painted a very negative picture and I am now convinced it's not even worth making the offer.

I have signed the forms so fingers crossed I get a yes but at the moment it's not looking great and I feel I have gone from it nearly all being over to another 2 years of payments.

Anxious times and all caused by previous stupidity I know

Thanks for all of your earlier comments

It is very worth making the offer Richard - do not let these people put you off - after all it is up to your creditors and not them. If they had done a better job of verifying creditors claims at the start of the IVA you would not have such a difference now.

Keep positive.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp