Our Creditors variation meeting was yesterday and has been adjourned, presumably due to rejection of our offer of completing in Feb.
Our IP has suggested that because David is off on long term Sick due to a Pulmonary Embolism and also that he has now been made redundant, that will propose a lump sum based on David's redundancy payment.
Our original suggest was to make payments to Feb which would have been 60 months and this would have been £2635 for David and £1000 for myself. David's redundancy was only £2860, so quite a bit less than the original offer.
Also reading the annual reports it appears that our IP fees will be in excess of £10000 each, when they were stated as £5875 for David and £2996.25 for myself.
Considering David had a minimum dividend of 71 pence in the £. Now with the increased fees and putting the offer forward of £2635 as full and final we will be looking at best 28 pence in the £. without the increase in the fees it would have been 35 pence in the £. I can see why the variation was denied.
My dividend was estimated at 86 pence in the £. Again with the increased fees the dividend would 11 pence in the £ but without the increase in fees it would have been 46 pence in the £.
I am now worried as there is no way my Husband can even try to secure a job and our income will not allow us to continue paying into our IVA's past Feb (that will be when David's Redundancy will have been all used)
Any suggestions please because I can not see the creditors accepting such a small amount.
We will have paid in £29312 to David's and £11200 into mine.
I don't understand why your IP fees are so high. Were they fixed either in amount of percentage of realisations at the date of the creditors' meetings?
It seems very unfair that, given your husband's health, you cannot find a sensible way to exit the IVAs - especially as your husband appears unlikely to be able to work for some time. And how does a relatively small lump sum offer give a better return to creditors than the one you have already put forward?
Has you IP advised you of the reasons why creditors have rejected the offer? And which creditors have submitted rejection votes as a matter of interest?
Sorry to hear you are having a tough time. I would find out why the IP fees have increased but also question your IP about why the new offer is preferable to the one already submitted. Do they realise the redundancy payment was relatively small?
Creditors are usually sympathetic to illness and other circumstances beyond our control so the adjournment seems a bit out of character. Do you have any particularly tricky creditors?
Good luck with the next step and hopefully you'll get a more sensible result.
No there is no given reason and no idea who has rejected. I have copied the email I sent requesting the outcome of the meeting and also her reply. Also with the fees they were estimated cost but in the creditors report the fees were said to be for extra work involved. this occassion is the only time we have requested a variation. everything else was just updates on our situation but no alterations.
Email copies from me
Hi Sue,
Our Creditors meeting was due to take place yesterday and I was wondering how it went.
We have had another setback in that David has now been made Redundant and is also still recovering from his Pulmonary Embolism, he will not be able to to obtain employment until his GP signs him fit for work, which to David's annoyance the GP will not do.
He is to receive a small redundancy package and I have crunched the figures and we will still be able to make the payments that you have proposed.
Sorry to have to bring more complications.
And from IP
Hi. I have had to adjourn the meetings whilst I negotiate further with your creditors. Creditors always prefer an immediate lump sum. Would it make sense to use the redundancy monies for this purpose rather than dripping it to the creditors? Regards. Sue
When notifying clients of rejections to either original proposals or variations, IPs must clearly ask the reasons why of creditors and communicate these quickly to their clients - as if all parties were actually at the meeting as was the intent of the insolvency legislation.
Is your IP asking creditors to now agree a higher level of fees? And which firm are you with?
I am with J Casey and co. The fee increase was in the year 4 review. and is as follows "Under the terms of the arrangement, my remuneration is to be paid on a realisation basis. At this stage, no fees have been drawn. A breakdown of my costs arising over the first four years of the arrangement is enclosed, together with a schedule of my current charge out rates. Due to additional work which has been performed and annual increases in charge out rates, it is likely that my actual time cost to closure will exceed £10,000, which is considerably higher than my original estimate.
As I said before this is the only variation we have requested, though all other set backs we have continued to manage the agreed contributions.
We have not been notified of anything except the email I posted
I think that they are just saying that their actual costs based on time spent are more than they are allowed to take. They cannot draw more than the percentage of the assets they realise. Most of my IVA cases would fall into the same category, but the time spent is largely irrelevant in these circumstances, and creditors are not likely to agree to higher fees without good justification.
Thankyou Melanie, that make me feel slightly better.
Broke of England, sorry for not replying earlier I missed your post. With regard to a difficult creditor my Husband has Amex and they insisted on the minimum dividend of 71p in the £. but now it will only be about 35p in the £.
I have no idea Melanie, but they were the ones who insisted on a minimum dividend. I have emailed my IP suggesting the redundancy payment as full and final and have also said we are trying to raise the difference from that to the original suggestion of 5 more payments. The only route offered to us after I think would be bankruptcy in which after fees they would get nothing.
