Variation to IVA

[peter.s]

I am thinking of making a F&F via money from my brother. If that fails I will have to put forward a variation to reduce my payments due to a change of career due to job uncertainty and greater flexibility of working arrangements due to my mother's deteriorating health.

My IVA provider are considering extending the term of my IVA by a further approx 24 months [:(] due to the lower payments via a Variation meeting.

Is there a cost for this meeting which will reduce the amount paid to my creditors from the total amount paid?

Also, if the IVA provider's fees are capped per my IVA at 35% max, does that mean that any additional fees from a Variation Meeting will not reduce the dividend to my creditors if the total fees already amount to 35%?

[MelanieGiles]

I do not like the sound of you extending for a further 24 months - that makes this a 7 year arrangement.

Ask your IP to provide you with alternative figures on a 5 year basis and their reasoning as to why they think that you should extend. This should not be done with just their own fees in mind.

[peter.s]

As part of my IVA my dividend must not fall below 40%, as per the modification put in place by HSBC. That was the reason why the IVA would be extended 24 months.

[MelanieGiles]

So why don't they try and modify that term out as well!

[peter.s]

I didn't know they could do that. I thought that was a default of the arrangement.

It was the advice of the admin person rather than the IP himself.

Should I propose this directly in a letter? Or should I assume that the IP will amend the proposal when he gets it from admin?

[ianmillington]

In a variation any provision can be removed, so long as both you and 75% (in value) of voting creditors agree. You could even propose a variation to change Supervisor [;)]

Take a long hard look at what you realistically can afford. I agree with Melanie that a 2 year extension isn't a reasonable change.

Ian

[peter.s]

That's good to know.

So if I return my Income & Expenditure form how do how do I prevent my IP from proposing an increase in my term? Will the proposed variation be sent to me for authorisation first?

Also, I was made aware that HSBC would only accept 40p in the pound for them to approve my IVA. I am now really worried that because the variation will bring it below that they will not approve it and my IVA will default.

[peter.s]

Forgot to say that HSBC have more than 25% of my debt by value.

[ianmillington]

Hi Peter

The 40p in the £ was HSBCs reaction to how they perceived the industry to be acting (or at least some of the industry).

My guess is that if you need to reduce your contributions the creditors will go with it so long as it is the very best you can do and it doesn't trash the dividend prospects.

And to answer your original point, if the total "pot" goes down so, potentially, do the IP Fees.

Ian

[MelanieGiles]

Peter - it is your variation and not the IP's. Within reason, the IP has a duty to present whatever you say you wish to vary the arrangement to. That does not always mean that it will gain the IP's recommendation, but creditor will often make their minds up on commercial grounds in any case.

With regard to HSBC - do make sure that the debt is still with them as they do have a tendency to sell their debts on after an IVA has been approved and therefore the 40p in the £ rule may be a non-issue.

[peter.s]

Ian, Melanie, thank you both once again.

How would I find out if HSBC still owned my debt?

[MelanieGiles]

Ring up your IP and ask them.