Do you think a debt management scheme would be a good option?
An IVA is agreed, bankruptcy is annulled, IVA includes the estate payout and pension. IVA fees expected to be £5500.
1 month later the £38,000 cash injection is paid to the supervisor. Would you expect the debts to be paid off immediately? or would you expect the IVA to remain active awaiting the pension to be included?
what should be the priority for paying the creditors?
in such situations can an IVA be fulfilled before the 5 years?
This is all dependent in the individual terms agreed within the proposal, which can vary.
I can't understand why the insolvency practitioner didn't do a lump sum IVA? They knew the lump sum payment of the estate would probably cover the debt but they made the IVA 5 years and included pension paid in monthly.
We were not given lump sum option or debt management plan option.
When they recieved the lump sum they paid their own fees of £9000 Nominee and supervisor. But did not make any payment to the creditors HMRC.
Would you say this is negligent?
The only information it included was that they would prioritise their own fees above creditors
But my question is do they have duty to make a fair proposal and pay the creditors?
They received a lump sum of £39000 one month into IVA which would have paid off debts especially if they negotiated interest reduction.
They seem to be the main profit on this situation. They prioritised their own fees and systematically applied each month time cost fees. Fees now £30000+
I do not understand the need to have made pension payments diectly, it is usual for them to go into your bank, as with any otherincome, and for you to then transfer the funds by dstanding order or direct debit.
They can only charge fees as agreed -- check your papwerwork for the agreed terms.
Lisa Thomas wrote:I presume as the Bankruptcy was annulled all of the Bankruptcy costs were paid off in full?
Assuming yes then would the £39k have paid off all the IVA creditors, interest and IVA costs and was it paid?
Apart from the fact they billed for £9000 fees when they quoted £3500.
Debt total was £36150 including their fees. They pushed up the fees and prioritises themselves. Buy that still leaves £30000 to give to creditors.
The only way to annul a Bankruptcy that has already been paid for by creditors is to give them a better return that they would get in Bankruptcy. This especially applies to HMRC, who are very patient in waiting for their payout where property is involved. HMRC don't like DMP's at the best of times, and would never agree to one in these circumstances.
A lump sum one off payment, minus costs, would give them a lesser return so was never going to get accepted. The logical way is to pay the lump sum, plus a monthly payment as well to pay 100% back, plus all costs. Never an ideal scenario as a starting point, but had it had worked then the property was safe.
The cost of I.P. IVA fees are also far less than the cost of I.P. fees when acting as Trustees in a property case. An outside I.P. appointed as Trustee will almost certainly sit on the property for 2 and a quarter years with potentially very high ongoing fees during that period, and their fees are preferential as well. This will leave much less in the pot when the asset is realised, if anything at all.
All in all, an IVA to annul a BR is perfectly feasible, I've proposed hundreds, but the key is to get it right at the outset or there may be a terrible price to pay later on.
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