Offered a full and final figure based on the sale of our house

[Bexlou79]

Hi everyone.

We started our IVA in June 2020 with Payplan and the total debt we owe according tonthem if we settle now is including interest and fees is around £68,000.00.

The reason for our needing to end the plan early is our 9 year old has been talking about suicide related to school and suffering with severe anxiety about me not being there. I have cut down my hours at work to home educate him whilst we wait for assessments for autism and ADD its been an awful time and I just need to be home at the moment.

To be fair Payplan have been great and think we have a good chance of a full and final offer being accepted based on our circumstances.

We are currently repaying at £347 per month and the outstanding amount still due to be paid into the IVA including the extra year as homeowners is £17,697 from my own calculations.

We would potentially receive £124k profit from the sale of our house but obviously we need to start again with minimal monthly outgoings or we would end up worse off than we are now. Ideally I need not to have to work while we are sorting my son's issues out.

Payplan said the creditors are likely to want as close to the debt figure of £68,000.00 as we are gaining such a big amount from the sale but we have asked our IVA company to put forward a full and final offer of £17,697 which is all they are likely to receive if we don't sell the house. Payplan have said the supervisor is looking into it to decide if it can be offered.

What do you think our chances are in this situation of the offer being accepted?

Any advise is also welcome.
Thanks.

[Foggy]

It is not up to Payplan to decide what can be offered --- it is YOUR offer, not theirs. I would couch the offer in these terms: You are willing to consider selling the property to enable the offer of £17k to be put on the table. If creditors are not minded to accept then you will not sell the house and will let the IVA run as originally proposed, in which case creditors will still get the £17k, but over a longer time period as a release of equity is unlikely and they will, potentially, only benefit from the extra 12 months, which has been included in the offer.

[kallis3]

I am so sorry to hear of your problems with your son and hope he can get the help he needs soon.

I agree with Foggy that it is your offer and Payplan have to put it forward.

As regards the house sale, you will have to get Payplan to remove the restriction on it at Land Registry

I wish you the best of luck.

[Bexlou79]

Thanks so much for the replies.

We are going ahead with the offer but its a lot more after Payplan worked out what was remaining to be paid into the IVA - £25,537 so now waiting for them to arrange the variation meeting.
I'm hoping we are approved. Totally unsure about the process but assuming similar to the initial start of the IVA a certain percentage of our creditors have to agree. Slightly anxious as Watch Portfolio are a big chunk now of our creditors and heard bad things about them being difficult.
Keep your fingers crossed for us.
Thanks again.

[Foggy]

Good luck with your offer --- but I wonder where Payplan got this figure from ... have they given you their calculation ?

[Bexlou79]

Hi Foggy,

Calculation below copied from email from my case manager.......


I have looked at the figures again for you and your payment levels are proposed to increase to £357 for yourself and £127 for Sam once the HP ends in June.

For yourself

March – May £256

June – March 25 - £357

April – May 25 - £256 (2 payment breaks added to the end due to covid)

39 payments remaining totals £13418

For Sam (husband also has an IVA)

March – May £91

June – March 26 - £127 (Sams IVA is for 72 months so his initial end date is a year later than yours)

April – May 26 – 91 (2 payment breaks added to the end for covid)

51 payments remaining totals £6297

Combined payments of £19715

If you were to base your offer on the potential of also 12 additional months for Equity of £357 and £127 it would be a further £4284 for yourself and £1524 for Sam which gives you an overall total of £25,523

That was the email she sent above. The house is only in my name but as Sam my husband has lived here for past 15 years they assume he has rights?
We were surprised Sam's IVA was over a longer term as we did not know that or understand why. We started our IVA in March 2020 but because covid hit we didn't actually start making payments until June 2020

Becky.

[Foggy]

Ah, right. I see --- yes, with the "built in" expected increase these inflated figures are those the offer should be based on. Could the 'extra' 12 months on Sam's IVA have been put in place instead of equity release (as his interest in the property could be argued against in the circumstances). If so, they cannot expect to take a further 12 months payments into account, so you could knock that £1500 off the offer. However, the extra time could be due to the fact that Sam's payment is on the low side. Anyway -- worth checking the reasons for a 72 month base term.

That all said, the amount you offer is up to you, not Payplan. Oftentimes the outstanding payments are the base figure, which can then be discounted for time and admin costs saved. Obviously the higher the figure, the better the chance of acceptance (although, still not a 'done deal' at the full amount). Much will depend on how the IP presents the offer to creditors and, it would seem that Payplan would prefer the higher figure and will be more likely to present it in a positive manner.

In view of your reasons for wanting the IVAs concluded early I would imagine this is a fight you could do without and assume you are going to go with Payplan's figures. I wish you the best of luck with the offer and going forward afterward.

[Bexlou79]

Thanks Foggy,

I'll check on the extra with Sam for sure but yes we wanted to offer the best amount we could to get them to agree considering in their eyes we walk away with £100k from selling the house and could pay the full amount but that would leave us worse off!
Hoping we get the answer we hope for but will update you.
Thanks so much for the help.

[luluj]

Fingers crossed ot works out for you and you are able to move forwards as a family and your son feels stronger as a young man.

[Bexlou79]

Hi guys,

So after confirming via email on 11th March with Payplan that we wanted to go ahead with the full and final offer from selling our home we are still waiting for documents to sign and for the variation meeting to be called.
There was a few days delay as they wanted a copy of my mortgage redemption statement and some written proof of house valuations.

My case worker is lovely and very understanding of our situation but we are living in limbo right now and it's horrendous.
I recently chased up when we could expect to get an outcome and she said by the end of May.

This was her reply on 4th April;

"We are progressing your meeting request, we are currently in the phase of having the fee sheet calculated which provides us with all the figures to input into the meeting paperwork for the benefit of your creditors.

Once this stage is done we will be drafting your meeting paperwork to send for you to read, sign and return and then we will circulate the same paperwork to creditors and book a meeting.

I would say 2-3 weeks approx worse case for meeting date to be confirmed and I am optimistic for you to have the meeting outcome before the end of May (we have to give creditors 28 days minimum notice for voting purpose)."

Is it normal to take this long from 11th March when she confirmed that "the specialist team have started the process"?

Thanks
Becky

[kallis3]

I was with Payplan and it took three months from the time I made the full and final offer until the creditor meeting.

[Foggy]

The whole process, from offer to creditors meeting, is usually around three months. They are expected to produce the offer to creditors within 21 days of receiving everything required (which is an easily moveable feast) and, as they say, to then give 28 days notice of the meeting date.

Unfortunately it is all to easy for them to delay. I would counsel patience ( even though the waiting is horrendous ) as you do not need to alienate those Payplan staff who are being sympathetic. Payplan itself went through a massive internal reorganisation before Covid hit, which caused it's own issues, and then, Covid put a bigger spanner in the works and they are still recovering !

Hang in there. Hopefully not much longer now.

[luluj]

As frustrating as it is in the delay, there is progress and they are working towards it now. Hang in there for the that light in the tunnel is getting brighter x

[Bexlou79]

Hi guys,

So after the long frustrating wait our variation meeting deadline is tomorrow 15th June at 1pm. However we received an email from Payplan yesterday stating that they had received a rejection vote for our full and final offer of £25,533 from a "voting agent acting for several of our creditors". I'm guessing they make up a large chunk for her to be concerned.

The voting agent wants us to offer more as they see we stand to make potentially £110k from the sale after we have paid the mortgage and the IVA off (if they went with the offer.)

They haven't said how much more they want but Payplan have asked us to confirm/outline our plans for the money regards a new mortgage deposit and also how much will be spent on seeking the much needed diagnosis and counselling for our son which is one of the main reasons we are doing this. We have provided this information to her and she has passed this info on to them today and asked them to reconsider our offer.

I have asked her to stress that we are now on Universal Credit and have applied for DLA and if we don't complete now the IVA may fail long term with me having to give up work fully to care for our son due to his self harm risks while we wait for NHS counselling/diagnosis/treatment of which there is an 12 - 18 month wait! Hence why with the funds from the sale we can access these things privately within days!

Anyone have any experience of this situation?

I'm very aware the deadline is tomorrow but Payplan have said we can adjourn up to 2 weeks whilst negotiations take place.

They seem reluctant to say which creditors have voted against but I know Watch Portfolio have many of our debts now so it could be them with their history of being difficult but I am speculating.

Thanks for reading this far!
Becky.

[Bexlou79]

Just as a note the £25,533 offered is what the creditors would have received if the IVA kept running to the end as it stands now including the extra year PLUS we are still making payments as normal until the house is sold ON TOP of this so we haven't offered less in fact they potentially are getting more but I believe because of the large amount of equity in the house this is the sticking problem.
The issue is for us with my husband being the only earner and our now damaged credit history we need a large amount of cash to get back on the market.