Due to redundancy, I am making an offer on my IVA. I have just received the proposal from my IP which I am to sign and return to set the meeting with the creditors. On the paperwork it states that Payplan will be taking £500 + VAT out of the offer in order to set up this meeting with the creditors. This seems extortionate, particularly in view of the fact that Payplan has taken its fees for the five years out of my IVA payments, but will not refund any of them should the offer be accepted. The IVA is due to run until April 2011 so I would be settling 2 years early.
I am concerned that Payplan knocking £500 off my offer by taking admin charges will jeopardize my offer to the creditors. (I am offering £9,000 with between £12,000 - £13,000 left on my IVA.
With regard to Payplans approach to the fees - does any of this seem irregular? Also can anyone just give any objective advice on what happens should the creditors refuse the offer?
Welcome - your redundancy money in theory is a windfall and therefore should not be used to submit a F&F as it is meant to support you through the months of not working until new work has been found - at this stage the balance should then be handed over to your IP as a windfall to be given to your creditors. You may or may not be lucky in getting a F&F proposed due to this - best wishes in your chosen direction !
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I am sure that if you make a full and final that you do not pay the full five years fees to the IP.
I have heard the £500 figure banded about before. Not sure if it is reasonable or not.
If your creditors refuse your offer,then the IVA will continue as it was.
As you obviously have redundancy payment, you can use this in lieu of wages whilst you seek further employment, if you are successful, any of your redundancy left over is paid across to your IVA as a windfall.
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On the scale of things, £500 would not make a great deal of difference to the final dividend.
Hubby offered over £1000 less than the original promised dividend and it only knocked it down by a couple of pence/£. It was accepted.
Thanks for your replies - in respect to the reply from luluj and the idea of a windfall. My redundancy is voluntary. The offer leaves me enough from my redundancy to last until I can sign on, should I not find work. I discussed the situation and possible ramifications in depth with Payplan before proceeding with my application for voluntary redundancy and everything I was advised assured me that this was a proper and appropriate route to take to make a full and final settlement offer. They didn't state that this redundancy could be taken as a 'windfall' with the creditors just getting their hands on any money due to me - I hope they are right though it would not be the first time Payplan have been unprofessional with their advice.
Last edited by abcdefgh on Sat Jan 10, 2009 10:26 pm, edited 1 time in total.
Didn't mean to alarm or offend you, but there are numerous posts on the forum over the last few days all saying similar around using redundancy monies to help support a F&F and the advice from the experts has all been that could be claimed as a windfall and that it should be used in full until such time as you have found work to fund everyday living costs, and then the balance be passed across to creditors as it comes under the umbrella of a windfall - sorry if this is not what you want to here, but i am only quoting answers from previous posts of similar nature.
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There is a solution for everyone .... Just need to stay positive !
luluj - Oh no, not offended at all (sorry if you thought I was [:)]) and I genuinely appreciate you taking the time to offer advice. The idea of a windfall instead of a settlement opportunity is just something I had not been informed about by my advisors. I am very grateful to you for pointing this out and if this does turn out to be the case, then my IP has not done her job and left me in a mess as I would not have taken the voluntary redundancy if it had not meant a means to ending the IVA once and for all. Hopefully, in this economic climate the creditors won't be greedy and will accept.
Thanks again for all advice.
Last edited by abcdefgh on Sat Jan 10, 2009 9:20 pm, edited 1 time in total.
A variation fee of £500 is about average. In my f&f proposal the charge was £500 with an additional charge of £1800 as an early settlement fee. The creditors agreed with a modification that the variation fee was reduced to £300.
Good luck
Pixie
'Welcome to where ever you are, this is your life you've made it this far, welcome, you've got to believe right here right now is exactly where you're meant to be'
IVA started may 07 ended dec 08
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
They should not be charging a full five years fees if the IVA is finishing 2 years early, but I do not feel that a fee of £500 for carrying out an exceptional piece of work is necessarily outrageous.
And do be aware that redundancy money is a windfall, subject to you being allowed to retain sufficient monies to replace your income over a realistic period of time. There is no guarantee that creditors will accept your offer, but in today's economic climate, I would feel that common sense would actually prevail.
My firm only charge £250 plus VAT to do a variation and I suggest that you should ask Payplan to (a) discount the balance of their Supervisory fees (as they will have nothing to supervise) and (b) request a reduction in their variation fee. They can only say no!
A voluntary redundancy sum (or for that matter any redundancy sum) should be used to initialy fund you until you have secured new employment with balance paid into your IVA (as stricly speaking it is a windfall) which may or may not pay off your creditors in full leaving balance back to you OR can be used to suggest a F&F in whatever you and your Supervisor are happy to propose.
Good luck and let us know how you get on
Last edited by David Mond on Sun Jan 11, 2009 12:25 am, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
