had a letter sent yesterday that my IP has noted that my liabilities have exceeded 10% of the estimated value ? what does it mean, he says he is currently reviewing the increase in liabilities for the purposes of proposing a variation to the arangement -confused ? anyone help explain before they get back to me
mistakingly put this on social forum - might get an experts view on here!!
Hi, when I draft an IVA that clause usually means that if the liabilities exceed by over 10% the amount stated on the Statement of Affairs, annexed to the proposal, then I would call a meeting (done by post) to ask the creditors if they will agree to include these or fail the arragement. A recalculation of the dividend must be done so if creditors were expecting 45p/£ and now they will only get 23p/£ this may amount to a default or failure. Hope this helps Sam
It really does depend upon the wording of your own IVA. If your IVA follows the IVA protocol, and eventual claims exceed by 15% or more the figure originally estimated, this constitues a breach - which is generally rectified by asking creditors to accept the increase and thus a reduced dividend. Perhaps your own arrangement makes specific provision but just at a lower percentage.
If the IVA is fully researched prior to its presentation, and creditor balances independently checked, this should reduce the possibility of falling foul of the breach provisions.
