Can they do this ?

[misc]

I've had an IVA for three years, but didn't realise that I had to freeze my pension. I have been told that I have to do that now. I have a final salary pension, and am worried that as a lot of companies are closing down final salary schemes - this might be an excuse for my company to close my pension down. This is really upsetting me as I thought the government were trying to encourage people to make provision for their pension. Also they say that I should be able to increase my payment by £ 151 - but that is the amount that I pay into the pension and because its tax free, if it became part of my wages - it would then be taxed and I wouldn't have that amount available.

Can they do this ?

[MelanieGiles]

Hi misc and welcome to the forum

Why has your Supervisor suddenly decided to do this, and was this provided for in your IVA proposal or modified by creditors within the Chairman's Report?

Doesn't sound right to me and you should query this further. An IP should not suddenly decide to change the gameplan at this late stage without good reason. Which firm are you using?

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

[misc]

It WAS in the original proposal, but it was an oversight - but from what you are saying it sounds like I haven't got a leg to stand on. So it looks like I'll have to freeze the pension - if it was in the original proposal (and it is). Another thing that's worrying me is that in the next 12 months, I might be made redundant and I will probably have a good redundancy package of 25K+. For arguments sake lets say this happens in 12 months time, when I will need 5K to meet the minimum rate of 37p in the pound. How much of the 25K can they take ? All of it ? Its not that I'm trying to get out of my obligations - its just that I am 47 years old and might find it difficult to get another job, especially at the same rate. So I'm worried that I will have nothing left to live on.

[MelanieGiles]

What incompetance on the part of your IP to remember this three years later. Who is your IP? Are they suggesting that you pay back all of the missed contributions over the last three years as well?

With regard to redundancy packages, they are there first and foremost to compensate you for loss of earnings. So you will continue to use those monies to fund your living expenses until you find another job. Only at that time, if you have remaining money, will you need to pay this into your IVA, and if your job is lower paid, you can use the remaining money firstly to fund the shortfall. Obviously IVA contributions must be maintained whilst all this is proceeding.

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

[misc]

It's debt free direct. They picked up on it, this time, because for the first time since the arrangement was made, they've asked me for three wage slips. The pension payment was included. So far they have given no indication that they want me to fund the shortfall that has occurred over the last three years. Maybe they realise that they're as much at fault for the oversight as I am.

Your answer over the redundancy package is very re-assuring. I've been having sleepless nights over this, with all sorts of notions like I'd be chucked out on the street and all sorts. Thanks for your support it certainly helps. I should query the tax though shouldn't I ? Just because I pay £ 151 pension a month now - freezing it doesn't mean - I'll have £ 151 extra in my pay packet, because that money will now become taxable income and taxed as such - Is that correct ?

[MelanieGiles]

I am sure that they are kicking themselves as we speak! Resist any attempt to take this money from you, and let them explain themselves to your creditors. Will this affect your ability to return the dividend you originally promised?

Regarding the £151 - you should definately not pay this as you have quite rightly pointed out that you will lose tax exemptions. Get your employers to work out your new monthly salary, less the pension, so that you can let your IP know exactly how much you are going to pay in future.

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

[misc]

When you say "resist any attempt to take this money" - you mean the back dated payments ?

Thanks for your help - I am very grateful.

[MelanieGiles]

I do mean the "arrears" misc!

Good luck.

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

[Adam Davies]

Hi
What an appalling error and after three years they have just checked your wage slips ?? Its absolutely appalling and I,m sure that your creditors will be impressed with DFD[not]
I do not think for a minute that you will have to back pay this money for two reasons
A]You have not got this money and fight tooth and nail if they ask you to extend the term of your IVA to cover this
B]I guess that the original payment that was proposed is the one that you have been paying and is not affecting the proposed dividend.It is DFD mistake not yours.
You are correct in that the extra payment will be less than the £151 that you were paying into your pension due to the tax that you will now pay on it,however I have a feeling that you will have to explain it to DFD several times !!
Your case highlights the reasons for avoiding "factory" providers of IVAs such as Debt Free Direct.
Please keep this forum updated as to how you get on
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[misc]

Yes - if anything my monthly payment has gone up slightly from £ 510 to £ 550 a month. When I got the IVA, I had £ 7,500 worth of stock which I agreed to sell - but as it was reaching its sell by date, I only got a nominal amount back. However, I have pretty much paid the shortfall through bonuses and so I'm expecting to at least meet the minimum of 37p in the £ at the termination of the IVA.

I only found this site today, but I must say I find it very helpful and you are all very friendly. It can be very intimidating facing my IP with questions like the redundancy question. I almost expect them to turn round and make some sort of stipulation that I have to pay it into the IVA. Hopefully I won't be made redundant - but only time will tell.

I am very grateful to you and Melanie for taking the time to answer these questions and putting my mind at rest.

Thanks again

[MelanieGiles]

Let us know how you get on when you speak to your IP - and don't forget you can seek advice from the forum whenever you want to.

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

[misc]

Hi,

I've contacted my company about freezing my pension and await a response. Today in the post I got my Annual report to creditors from DFD. The conclusion that they came to is that the final dividend will be in line with the proposal, so long as I maintain. Some of the figures sound quite high and I wonder if they are typical. My Statement of fairs showed liabilities of £ 83,061, but creditors claims logged are £ 86,061 - is the difference between the two, interest occurring between the time I notified the balances and the IVA or does is sound like somebody has been "guilding the lilly" a bit ? In three years I've paid £ 27,080.53 . . . but there is a Nominee's fee of £ 2,500 and a Supervisor's fee of £ 2,625 - is that normal for 30 minutes work a year ? If so how do I become a Nominee or Supervisor !!! There are also "distributions" of £ 11,920.68 - is that payment to creditors ?

Do the fees mentioned come out of the 37p in the £ dividend ? I suppose although I'm on target - I still need to forego my pension ?

I'm not quibbling I just would like an independant assessment of where I am, and to understand the terms used.

[MelanieGiles]

Ouch!

IPs do more than 30 mins work per year on your case, Misc, even in the IVA factories! You can become a Nominee and Supervisor by approximately 10 years of hard work in the industry, finalised by a set of hideous examinations.

It is usual for creditor claims to increase - as there is a time delay between finalising your proposals and calling the creditors meeting - but I am suprised to see such a large increase in claims. If you are concerned, ask your IP to provide you with a schedule of the proof of debts so that you can review matters further.

Distributions to creditors are payments to creditors, and fees do come out of the 37p. Yes, you do need to forego your pension, as this should have been done from day 1 and your creditors are suffering as a result - but this is you IP's problem as he has failed to supervise the arrangement properly.

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

[Adam Davies]

Hi again just to gve my point of view from a non professional status
The fees always seem high but in your case seem more than reasonable.At the end of the day the fees are paid by your creditors and its upto them to dispute them or not.
As they have stated you are on target so just put your head down and see out the next two years.
Its a pity about having to give up your pension,not everyone has to do this ,it seems to depend on your IP.
Let us know how you get on
regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[misc]

Hi,

I've got a bit of an update. On the 18th of December (after a 90 day consultation period), I'm going to be made redundant. My IVA is scheduled to terminate in April 2009. Before tax I will receive 40k and expect to get around 34-35K net as some 27K is pure redundancy which is not taxed, the rest being notice - 3 months, bonus, holidays which are taxed.

I am 47 years old and I know there isn't supposed to be Age ism, just like there isn't supposed to be sexism !!! so I'm worried that I may never be able to work again. There is a possibility of a transfer with the same company to Australia/NZ . . . in which case I wouldn't get the redundancy, which is obviously appealing. Alternatively I could try to build my bookkeeping business with my redundancy payment.
There is a freelancing opportunity which could dramatically improve my income, but costs £ 14K + VAT and represents a risk . . . would I be allowed to buy the franchise? I'm currently paying £ 550 a month, so over the remaining 16 months (from December) to the end of the IVA I would expect to pay about 9K.
Could I make an offer around this figure ? (I have been advised that I might be able to offer 75% of the outstanding amount - is that true ?)

As I try to finance the business I'm thinking of doing bar work. I am seriously worried that any attempts I might make to pay my way in society might be hampered by my attempts to market my business which requires funds.

So what are my options realistically ?