F&F suggested not an offer????

[psbmids]

Hi to all. I've been following this site for a few months but never contributed until now. A very puzzling (and worrying) situation has arisen. I have an IVA - 20 months into it and my new partner has offered to stump up the cash for the F&F settlement. So far so good... I'm very lucky.

However, on reading this site I have learned quite a bit about offers etc and wording and thought that would be the way to go. On contacting my IP it was suggested to 'hold on' and she'll ask the creditors for their settlement figures... So I did.

I then get a figure of £18K (after chasing her for about 3-4 weeks). I was flabbergasted as the figure was a good £20K lower than I thought it would be. I accepted in a flash - as you would expect - but then she came back saying that another creditor had responded and that their figure added to the original suggestion was now £24K. I was still pleased, as to be honest, I'd thought it was a mistake at first anyway... So my partner wrote a 2nd letter, offering the £24K.

We then get another email saying that that should be OK but one last creditor hadn't responded and if they did the figure would be nearer £40K !! We only owe £36K if we stayed the distance......

On reading this site, it seems to me that offers to repay early usually are 'discounted' a little to take into consideration lower IP charges. What do we do now. Do we revert to the original thought and go in with an offer of £32K, or do we hang on and have the variation meeting, with the last creditor (Barclays) being able to add on more.

I want to do what's right. I just need to get out of this fast as I'm about to lose my job and my ex-wife won't move out of house that I'm still paying a mortgage on too.... Any suggestions?

[MelanieGiles]

What a curious set of circumstances. You have been in your IVA for over 2 years, but your IP still does not have confirmed creditor balances? How does that happen? She has either agreed claims or she has not! Sorry but something doesn't sound quite right here. How much are you paying into your IVA per month, and insist that your IP agrees all creditor claims before preparing a variation request on your behalf.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[kandh]

Would you be able to tell us how much your original debt was for and your monthly contributions (also proposed dividend)?

We have just had a F&F offer accepted and we roughly worked out that we had made 27 payments so had 33 left. We just took our monthly contributions and multipied them by 33. This would enable us to meet the creditors expected dividend as if we had gone the 5 years. This was the maximum we would have to offer in the F&F. What we actually offered was £1500 less (IP fees for remainder of years).

Do you have anything in your proposal or yearly review reports stating that there are still outstanding claims?

Kerri [:)]

[psbmids]

Thanks for both responses. Firstly, let me come clean. I am the partner of the person who has the IVA, but thought that it would read better to be written in the first person. Apologies. Therefore my partners original debt was for £182K with an agreed IVA to pay of £56K, which includes IP charges. He was to pay £924 per month for 24 months and then this would reduce to £650 per month, as his mortgage is due to go up about that time. Started the IVA in December 2005, so just under 2 years have been paid. There is also a 4th year property revaluation thingy, but as he has a 95% mortgage, with a loan from a friend of £25K and the property in 2 1/2 years from purchase is only valued at £5K more now (bought a new build property and the area is awash with them), there won't be anything in it to remortgage (this has been generally accepted).

I would come up with the difference, which we worked out to be around £35K, but thought that we would offer £32 possibly. When we rang, the assistant there said to hang on a bit and she'd have a word with the IP, who you can NEVER get hold of. We eventually got back to her and she said that she'd written to the creditors (some were different than the original ones, due to the debt having been sold). The amount to pay for the F&F would be £18K !! Yes, thank you.... Then she said another creditor had responded and that the allowable amount would be £24.5K. We said, OK and wrote anothe letter accordingly. Then she emailed him and said that this was fine, but if Barclays came back then the amount to pay would be another £14.5K on top, if the 25.6p is to be adhered to. - about £39K in all, and we've paid this months £924 also, making nearly £40K !!

We now don't know whether to go back and just make them an offer, or to just bite the bullet. HE can't get on in his life with this around him.......

Thanks again.

[psbmids]

Re-read your queries again and missed some info out. The original debt had been agreed at the time of the IVA. There are no other creditors listed, just the ones originally dealt with at the time of the IVA. Therefore, no outstanding claims.

[MelanieGiles]

Well the creditors claims will be whatever the creditors claims will be - but I still find it incredible that they have not secured a claim from Barclays after some two years. Or that they would give settlement figures out without checking the status of creditor claims.

There is no harm in making an offer of settlement, and do remember it is your partner's right to put forward a variation to their creditors and not at the discretion of the IP - although an IP's recommendation always helps!

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[psbmids]

Hi again. I have now found out more as further information has come to light today. In fact, it seems that there were a few points that weren't clear to either of us. Firstly, the total amount originally owed was £186K. However, this was made up from 6 creditors, one being Barclays @ £58K the largest creditor. When the IVA was first put in place Barclays never made their claim BUT their amount was put on the statement of Affairs. They didn't claim, they didn't vote, therefore their claim was put down as nil.

I won't repeat the above, but suffice to say that we have had this explained to us in more detail and now understand it that if when we put our variation offer to the creditors at 25.8p in the £, Barclays could come back with a claim at that time. THerefore, it explains the two figures. We will have to pay £24,800 if Barclays continues to be silent, or we will have to find another £15K (nearly) if they stand up and shout.

Does this make more sense and is this more normal.

[Adam Davies]

Hi
Your IP will have to write to Barclays at the variation meeting with your offer and I,m sure that they will then respond.I would be very surprised if they failed to stand up and shout.
A very strange situation,what does your IP advise you do ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[psbmids]

She's just explained the above. She's tried and tried to write, fax and call Barclays, but unsure whether she means recently or at the time of setting up the IVA. Anyhow, we have a very good situation of only paying £24,800 if Barclays don't shout, out of the total of £38K odd remaining, so if Barclays do shout, then their £15K would put us in about the same position as if we'd paid it over the 5 years.

I'll write again with what happens next, but we're now just waiting to hear about a date for the variation meeting. Many thanks again.....

[MelanieGiles]

Sorry I am getting confused - and am either being thick or there is something strange going on with this debt.

You say it was included in the statement of affairs at £58k, and that they have not yet claimed or voted. Now, two years after the event, your IP has decided to give them a rattle to see if they are still interested! Sorry, but this should have been sorted out ages ago, and a final deadline for claims given in accordance with Rule 11.2 of the Insolvency Rules 1986 (sorry for being techie!), failure to submit by that date effectively excluding them for dividend purposes.

What has been happening to the dividend payments made to date - presumably nothing has yet been paid to Barclays?

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[psbmids]

Yes, you're right. Nothing to date has been given to Barclays. I can see it seems strange to you, but of course to us, we don't know the rules, just go along with what the IP says. She's contacting them again, because we've been told that they should be due to a variation meeting. Are you saying that if they didn't put in a claim the first time round, they're not entitled to claim now, even at a variation meeting - just because they're on the statement of affairs?

We have asked the IP to send us a spreadsheet of her workings out, just so we can look at it....

[aguise]

Hi there
It seems to me that Melanie is saying that they missed their chance and your company is under no obligation to include them now, I would speak to to your IP and ask them about rule 11.2 1986 and see what they say. Look the rule up yourself before hand .

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[psbmids]

Hi to all again.
I thought I would just bring you up to date with latest news. My partner has had a successful variation meeting and we can't believe it's all going to be over. The upshot was that Barclays never claimed or voted so the meeting went ahead with their claim as 'nil'. That meant that we paid £24,800 for our F&F.

What's interesting here, is that as his original debt and IVA was set up with Barclays included, if he'd paid the whole of the 5 years, then of course, the 'extra' money which had been paid for Barclays would, I presume, have been split between the other creditors.

Seeing though, that we offered to pay it off early (just over 3 yrs early), we paid the remaining creditors what they were due but Barclays never claimed, therefore we didn't have to pay that amount? Not sure if that was what happened really as don't fully understand how it is all worked out, but nevertheless we paid the £24.8K instead of a remaining £38K if we'd gone to the end of the term.

Thank you all for your help the other month anyway. Just wanted to bring you up to date.

[Lisa2009]

Sorry to be thick but what is Rule 11.2 of the Insolvency Rules 1986 ?
I have tried to look it up but cant find it.
The reason i ask is, as you know my hubby has made an ofer for F&F 2 years early and still after 3 years Lloyds tsb still havent made a claim. Does this rule mean that now they shouldnt be eligible to claim and should be excluded?

[psbmids]

Well, I'm no expert and to be honest I asked exactly the same above. I am presuming the following: Your situation with Lloyds is the same as my partner's situation with Barclays it seems. He had put his debt of Barclays on his Statement of Affairs, so it was included in his overall debt. The IVA went ahead with this full debt in mind, but Barclays NEVER put in their claim or voted.

Now that my partner wanted to do a F&F settlement we contacted his IP. They said that instead of us offering an amount, they would write to the creditors asking them to restate their claims in light of the probably offer to settle. A letter/phone calls/faxes also went to Barclays at that time of course.

The responses from all claiming creditors came back and amounted to £24,800, but that DID NOT include Barclays as they remained silent. So, we were told that to settle the claims it would be the £24.8 but if Barclays decided to claim then it would be nearly £15K more (which amounted to about what we'd pay over the remaining term anyway).

I understand that claimants, are entitled to claim up to the 5years, as I understand it, but the 11.2 rule says not afterwards - or something like that. And generally the IPs try to get all claims finalised within the first 12 months, or so I read on these blogs.

However, and this is just our assumption, if we had paid the whole amount over 5 years, then we would have paid the original and agreed pence per pound dividend which includes the Barlcays debt, but if they never claimed, the excess would be distributed to the other creditors. Then if the F&F is accepted, as it was, then the pence per pound would be for each individual claim, leaving Barclays with nothing if they continued not to claim.

In the end, we paid 3 years and 2 months early. The amount remaining was just about £37K, give or take a few hundred. (including full IP charges). We paid the dividend for EACH claim, and it amounted to £24.8K. Our IP showed us the calculations and had also put forward to the creditors that by getting their money early they would receive interest and they put that into the calculations to show what they'd get overall.

Hope that helps. I know it's wordy but it's a complicated business. Good luck.