Hi, I have been observing the forum for a couple of weeks now and have been impressed with the wealth of information to be found.
I would like your opinion on the following:
In general, how are creditors likely to react to an IVA proposal requesting that a caravan or other luxury asset is to be excluded on the basis that the cessation of the hire purchase agreement secured against it would increase the amount owed to the unsecured creditors? If the contracted hire purchase payment is in excess of £300 and the probable shortfall is, say, £5,000, would the voting creditors be of the opinion that the return of the asset would be in their interest as a higher dividend could be achieved in the IVA?
Speaking from personal experience.....our caravan had to go back to free up more money for the creditors. The shortfall was just added to the IVA.
I would say that your creditors would think it in their better interest for you to return or sell the caravan to free more money up thus giving them a better return.
I think the creditors would request that it was either handed back or sold.
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
I've deleted your other topic Born2Draft as it was a duplicate of this one.
Just in case you wondered what had happened to it.
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
Hi
£300 per month over the 60 month IVA will be 18k extra for your creditors, less the 5k shortfall that still leaves an extra 13k in the pot.
Can't really see them agreeing for you to carry on with the HP I'm afraid.
Regards
On the assumption that the asset was returned and re-sold by the hire purchase company, leaving a sizeable shortfall, that is what I would have expected.
If the hire purchase agreement secured against the asset had, say, 24 months remaining, with no balloon payment, and a potential re-sale value, would the creditors be more likely to request that the asset is surrendered upon approval or that the hire purchase agreement is completed, the asset sold and the funds introduced when available?
I successfully retained a caravan on HP for one family I was acting for, as they had a severely disabled son and it was the only way they could provide a holiday for him, but generally this will be viewed as a luxury and creditors will expect it to be returned.
If the caravan was your home (we have had several cases where it has been) then no problem in keeping up the payments (like rent). Whether it ultimately has a value in year 5 is a mute point and possibly could be dealt with as the usual equity clauses on property.
However if it is a luxury caravan cannot see creditors accepting that you continue make contributions - as Andy says it freezes up more money for all creditors
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.
