www.iva.co.uk

I have recently offered a full and final settlement. Feeling like the end was near, I was then told that in my agreement is a clause stating no changes are to be proposed in the first 24 months. any proposed variation would fail the agreement!

Even though I am offering the original dividend to creditors, my IP will fail the IVA if the settlement is proposed. Seems a little crazy as the reason I have offered the settlement, is because I can no longer afford the same monthly contributions! I feel I'm in a no-win situation here.

My question is Would the IP do this because they will lose out on IP fees if I were to settle early? Very frustrating!

daveb -

I think the "24 month variation" clause was more likely added to your proposal as a modification by a Creditor. I have the same modification in my case. Have a look at your Chairmans Report - this should have a list of your mods attached.

The modification is put in there to prevent unworkable IVAs promising unachievable dividends being put forward and then variations being proposed early doors whereby the creditors then get offered a reduction in payments i.e hobsons choice, something rather than nothing.

Given that you are proposing to pay the same dividend, can you tell me a few bits of info:

How old is your IVA?
What is the nature of the proposed change? Presumably the lump sum is coming from somewhere
Are you currently in arrears with your payments?
What is the precise wording of the condition/modification? To put an absolute bar on a variation to such extent as even to propose one constitutes failure is a bit harsh.

Let us know the above and we can have a think.

Ian

My IVA is 15 months old, I have to move out of my parents house, and will be paying more for rent etc. My parents have offered the settlement, and I have no arrears at present.

The precise wording is "No variation should be proposed within the first 24 months. Should a variation meeting be called this will constitute immediate failure of the arrangement"

But surely they wouldn't fail the IVA when I have a lump sum to offer? The creditors would then be worse off?

Hi
That's ridiculous
Your creditors would rather have their money now.
Your IP should put forward a variation to firstly remove the "no variation in 24 months clause" and then propose the full and final
Go back to them and insist that they do this and make sure that you actually speak with your IP
Regards

That was my thinking, but even if they put forward a variation to remove the clause, then that in itself may fail the agreement!? I asked who would actually fail the IVA, the creditors or the supervising company? and they said, they themselves would be the ones who would fail it, even though they know my situation! seems crazy??

Hi
I wouldn,t be happy with that answer and I'm sure that your creditors wouldn't.
Are you actually speaking to your IP ?
Ask them to speak with your creditors before arranging a meeting,to gauge their response.
If you still have no luck ask for your IPs comments in writing and then inform them that you have no choice but to take the matter to the regulatory body as you feel that your IP is not acting in your or your creditors best interest.
The clause "No variation should be proposed within the first 24 months. Should a variation meeting be called this will constitute immediate failure of the arrangement" is not one that I have heard of before,most IVAs have the no variation in 24 months clause but I've not heard of the immediate failure bit.
Regards
Regards

Mine just says -

"There shall be no variation made in respect of an early settlement within the first 24 months."

There are so many different terms used that many people think mean the same thing eg breach, termination, failure. It is arguable that the only terminal one of these is termination.

A possible way around it would be to spell out to the IP what you propose to do. The Supervisor can then put this to the creditors and convene a meeting for directions on whether or not, in the circumstances, they would wish that condition to be upheld. That is not a variation and simply seeking directions won't provoke failure of the VA.

Once the reaction has been gauged, then consideration can be given to varying the VA, if the creditors have given confirmation that they will acquiesce to it. I would strongly recommend, however, that the Supervisor gets 100% confirmation at the directions meeting, to prevent a dissenter ruining everything.

Worth a shot! .

Ian

HI
Good advice,pity your IP couldn't come up with the same.
Regards

I would personally contact the creditor who put forward this ridiculous modification to see if they meant to say what they say and find out how they would wish to see this matter addressed. My guess is that they will agree to at least review the terms of the revised offer - as it is very likely that the debt will now have been sold on to someone perhaps a little more commercial!

I spoke to my IP today, and he told me I am "stuffed". He said, it is not even possible to sound out the creditors about the proposed settlement, before arranging a variation meeting.

So I am stuck in the IVA until the 24 months is up, at which time I can then put forward a settlement offer. I Don't know what else to do other than sit tight for another year. Gutted!

I wonder if he means that he can't be bothered to try and make the call? I regularly engage with creditors on issues such as this, and have no problems whatsover. It all boils down to client service at the end of the day.

IIRC it's a KPMG mod.

Melanie is right. Putting a call into creditors or conveniong a directions meeting is not a variation. It sounds like your IP may be suffering from inertia rather than an inability to do anything.

Did the IP advise you of the implications of the modification when he marked the VA as approved?

Ian

I had a different IP to start with, and my case has been transfered twice to new supervisors. I did receive the modifications in writing at the start of the agreement. It was a condition that had to be met for the creditors to accept the IVA, so I really had no choice.