www.iva.co.uk

I am currently having an IVA proposal drafted that will return about a 45-50p dividend. I am hopeful it will be accepted but I have the great bugbear MBNA as a major creditor (about 15% and the largest in value).

My IVA proposal includes a large lump sum that will be available in 5 years time and this will reurn about 10p as a dividend (included in the 45-50p above).

Like a lot of other people I have had offers to negotiate with MBNA outside the IVA.

What I would like to know if would it be acceptable to other creditors if I excluded MBNA from the IVA and lowered the monthly payment available to other creditors in the IVA. To sweeten this I would not let MBNA have any of the lump sum in 5 years time.

This would mean the other creditors would get a higher dividend overall (as the lump sum would be shared between less of them).

All subject to agreeing a sensible repayment with MBNA (they seem to be totally against all IVA's at the moment) but what does everyone think about this?

Thanks

Ack, here's my 2p worth.

The only reason MBNA want to talk to you is to secure themselves a preferantial deal. I expect they would be very interested to find out if you had assets, especially property - are they trying to get you to take money out of property for them ?

As a general rule in any debt solution you have to be seen to treat all creditors equally so you shouldn't negotiate deals with one creditor to the exclusion of others. I'm pretty sure you wouldn't be allowed an IVA on that basis.

However if MBNA is only 15% by value of your debt, they should be outvoted, so will have no choice but to fall in with the IVA.

You might try asking MBNA how they propose you deal with your other creditors !

New to the forums - but not to debt !

This will not work ackeryi.

It may be possible to negotiate with MBNA outside of a proposed agreement, if you have a lump sum offer - based on cash being immediately available - and are paying them less or equal to what is on offer to creditors within the IVA. In which case, the other creditors will benefit from the MBNA saving, but so long as you make MBNA aware that a higher or similar offer might be made which they could benefit from then that is for them to consider.

Go 4 broke is right - MBNA are only owed 15% of your overall debt. Your IP could therefore work hard to pull in sufficient votes to outvote their certain rejection.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thanks G4B.

Lump sum is in shares that I cannot sell for 5 years by law so MBNA can't get their hands on them and have no other assets.

MBNA would be getting less than other creditors so if they accept it then I assume it would be their problem and others would benefit.

Although they only have 15% of the vote my creditors are numerous (about 20) and I'm concerned many won't vote. As it is 75% of the ones that do vote in the creditors meeting that are needed, MBNA could be a much bigger fish if they vote against.

I suppose all I can really do is wait and see what happens at the creditors meeting at this stage and hope they don't bother voting.

One question for anyone else reading this - from a legal point of view if a creditors meeting is held and approves the IVA can a creditor object if they didn't vote or say they didn't receive the proposal etc.

The answer to you last question is technically no. But your IP must ensure that all creditors are properly circulated, and sign a Certificate of Posting as evidence of this.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Ack,

The MBNA logic does seem strange and I wonder what it is.

Perhaps they are working on the basis that 'A bird in the hand is worth two in the bush' or whatever the saying is. A lot of IVA's (I forget the exact figure) don't make full term ending in bankruptcy, but in that event they would get nothing from any external arrangement either.

A more sinister reason is that any deal you do with MBNA outside of, say, an IVA, is an unregulated agreement and they could change the terms at any time.

Unfortunately, as Melanie says, there seems no way you can realistically pull this one off.

However it seems unlikely that your IP would have taken on the case if they didn't think there was a more than fair chance of getting it through ?

Best -


New to the forums - but not to debt !

Thanks for the advice everyone - just thinking out loud really!

Don't have a creditors meeting date yet anyway but I always think it's best to get my thoughts on the forum to put my mind at rest.

Melanie - I will discuss this with my IP (Accuma) asap. I'm sure they are aware of the way MBNA are handling cases at the moment.

Hi Ackeryi

Yes I can confirm that Accuma are aware of the MBNA problem and I'm sure you will be given the appropriate advice specific to your case from your IP.

Hope this helps



AccumaGroup - A large insolvency practitioner service based in Manchester.
www.accumagroup.com