Finished IVA - oh no its not......

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fullstop

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Post by fullstop » Wed Sep 08, 2010 4:36 pm
I made my last payment to an IVA with payplan in April this year. After hearing nothing for two months I rang them and they told me I had a short fall in my divident. I explained my IVA was for £450 x 60 months yet after 10 months I got promotion and my payments went to £495 for the remaining 50 months (which I paid in full) along with £10000 one off equity release.

I argued the case and they said they would write to the creditors to request a 'paid to date' end to the IVA (basically saying, look you have had 60 months pay at a higher rate lets let the guy go).

This week I get a letter saying I owe nearly £3k and they have no knowledge of asking the creditors to end the arrangment. (They assure me they will now but unlikely to get a positive result).

It turns out that proven debt went up from the estimate by 2k (so only adds £500 to the arrangment) and that the creditors had asked that they (PAYPLAN) get 20% of the income rather than the estimated £5k in the original proposal. Why would the creditors ask for an amendment that would cost them more than the proposal asked for???

Now I look back at the chairmans report and it states Debt £115400,

Estimated total for distribution £25475

Minimum dividend £25%.

Clearly no one (including me) picked up on the fact that 25% of £115400 is a lot more than £25475.No one at the time of the creditors meeting told me this would result in a shortfall.

How can they let the IVA run its course before anyone spots the error, especially as I have paid 50 x £45 more than the original agreement. The reason it is short is because of PAYPLANS fees but I am not sure if I beleive them that the creditors asked to give them 20% rather than estimated £5k.

For the record PAYPLAN say if ultimately I dont pay the extra (and the extra fees this will generate to them) They will fail my IVA.

I WANT TO SCREAM[:(!]
 
 

liamjames

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Post by liamjames » Wed Sep 08, 2010 4:55 pm
I feel your pain- it's really unfair that this wasn't made clear to you.

I didn't realise that it was common practice for an IP to increase his fees as a result of modifications - our practice does not do this, and I can't see how this could possibly be in the best interests of the customer.

Hopefully your variation will be accepted and everything will be okay, but if not, then you should check all previous correspondence to see if and when Payplan mentioned this to you. The figures should have been present in all of your annual reports at least- if not, then I would feel that this is a reasonable cause for complaint.

I'm sure that your IP will allow you a reasonable amount of time to realise the additional funds, if it comes to that.
Take care,

Liam James
Varden Nuttall
http://www.vardennuttall.co.uk

Read our reviews here: http://www.iva.com/iva_companies/Varden_Nuttall.asp
 
 

MRBLUESKY

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Post by MRBLUESKY » Wed Sep 08, 2010 5:34 pm
hi full stop does it say in your terms and conditions that the equity release is part of the minimum dividend,if so according to my calculations,allowing for payplan to take 20% of all paid in monies you have paid 27% dividend to your creditors.which is above the minimum 25% required.whether i,m right or wrong i think you have been poorly treated here.
Last edited by MRBLUESKY on Wed Sep 08, 2010 8:15 pm, edited 1 time in total.
 
 

kallis3

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Post by kallis3 » Wed Sep 08, 2010 8:23 pm
It's all down to each individual proposal and should be taken up with Payplan.

If fullstop can't get an answer from the case officer, an email to the IP is the next step via this link:

http://www.insolvency.gov.uk/fip/
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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MelanieGiles

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Post by MelanieGiles » Thu Sep 09, 2010 1:15 am
This is appalling - there is no way that this should be being raised at such a late stage. I suggest that you demand a meeting with your IP personally for him to explain why this was not highlighted at a much earlier stage of the game. If the IVA term has expired - they may have absolutely no legal standing to demand any more money, but in turn that could actually jeopardise the successful conclusion.

Let us know how you get on.
Regards, Melanie Giles, Insolvency Practitioner
 
 

fullstop

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Post by fullstop » Thu Sep 09, 2010 10:05 am
I also have to pay £2000 + vat nominees fee and disbursments which was over £1000 (estimated £500) and all their fees are plus vat so they effectively take 23.5%

Which leads me to another question, if an IP worked on behalf of the individual but charged the creditors rather than the individual, the creditors would recover the VAT and thus, on a typical 20% cut the creditors could receive another 3.5p in the pound - any reason it is not done this way???
MRBLUESKY wrote:

hi full stop does it say in your terms and conditions that the equity release is part of the minimum dividend,if so according to my calculations,allowing for payplan to take 20% of all paid in monies you have paid 27% dividend to your creditors.which is above the minimum 25% required.whether i,m right or wrong i think you have been poorly treated here.
 
 

fullstop

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Post by fullstop » Thu Sep 09, 2010 10:12 am
** update**
I have checked all correspondence and have had nothing from them to warn of the short fall other than the most recent letter.

I have checked the anual report of which they send me a copy and the very last line in the report says estimated dividend..% as follows

Year 1 23%
Year 2 23.84%
Year 3 23.82%
Year 4 23.86%
Year 5 23.72%

The last report was not quite the end of the arrangment as I was allowed a couple of months 'holiday' during the plan but all payments have been made now.

One last question for the forum (which I would like to thank for their help),

Concidering the details above and in your experience, what is the likely chances that the creditors will agree to complete the IVA and a 'paid to date basis' ?
 
 

Adam Davies

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Post by Adam Davies » Thu Sep 09, 2010 2:12 pm
Hi
I would think it is very likely and you need to press Payplan to arrange a variation meeting to this affect.
Sounds a nightmare situation and very frustrating for you
Regards
Andam Davies
 
 

liamjames

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Post by liamjames » Thu Sep 09, 2010 2:33 pm
The fact that they have waited until the end of the IVA to do this is outrageous, and I would certainly follow Melanie's advice and ask to speak to your IP personally.

I have tried to answer your VAT question in your other thread- I hope it's clear enough.

Best of luck, and please keep us informed.
Take care,

Liam James
Varden Nuttall
http://www.vardennuttall.co.uk

Read our reviews here: http://www.iva.com/iva_companies/Varden_Nuttall.asp
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