www.iva.co.uk

Hi
We have just received our annual report and don't understand the first page! It says that the dividend is one pence less than the supervisor's estimations, 'however this is subject to change upon receipt of outstanding claims from creditors.' 'The present decrease in dividend is due to an increase in claims from unsecured creditors.' and 'it is proposed that an interim dividend of 10 pence in the pound be distributed within 36 months of the effective date.'

Well none of it makes sense. We have compared this new report with our existing report and there appear to be NO increase in claims from creditors, however what there does appear is one creditor MBNA (Credit card £6,500.00) who was accounted for in the original pence in the pound but who appears have not put in a claim, which is odd because they are linked to Alliance and Leicester who are our second biggest creditor. Does this mean at any time during the five years they can decide to take an interest and want to be part of the IVA? Also, has the pence in the pound originally set up took MBNA into account, I can't understand why creditors are getting a pence less in the pound, and we definetley don't understand this about the ten pence in the pound - what exactly does this mean???
Thanks - very confused Kitney

Hi Kitney

I think that you are just getting a little confused with the content of the Supervisor's report.

Firstly, it is usual for creditor claims to increase, from the time your IVA is accepted to the time of the creditors meeting. They continue to charge interest to that point after all!

The 10p interim dividend referred to simply means a first dividend (I assume) - but I am rather suprised that this will take 3 years to effect. How many years has your IVA been running for?

The MBNA debt is included in the IVA, but it is possible that they have not yet submitted a claim. I am sure they will eventually, with perhaps some chasing from your IP.

Some of my comments are made on assumptions, so the best thing to do is call your IP and ask them to clarify these points. I don't think there is anything to worry about though!



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

HI

Just thought I would mention that on my iva proposal it states the first dividend will be paid at 36 months in, the balance at the end. This is with Grant Thornton. It does seem a long time for the creditors to wait for anything back at all. Does the IP get to keep any interest accrued on payments we make to the iva? probably!
Best regards
Dawn

Hi
The IP does not keep any interest,it is distributed to your creditors.At the moment it is normal for creditors to not receive any dividend until the second or third year.This is because the IP ensures that their costs are paid first,however this looks as if it is soon to change with creditors and IPs having to share the income on a regular basis.
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

I would not favour this method of payment. There should be no reason why IP's cannot effect a distribution at the end of each year, at the time they are reporting to creditors. This is one of the key things creditors are unhappy about at present.

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