Proposal Negotiation

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dbni

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Post by dbni » Sun May 09, 2010 2:09 pm
Hi, I have recently prepared a IVA proposal for creditors 41p/£ versus 12p/£ (£400pm). The balance is £108,000 which includes a £25000 associate creditor within my family. The associate creditor is prepared to waive rights to any dividend subject to acceptance of the IVA in its current form. The problem I have is that 2 creditors are pushing for +£250 and +£300 to the offer by cutting my expenditure which I agree is a little higher than what CFS deem as reasonable household expenditure. Eg £200 for cigs which is 20per day/ £853 for shopping and so on. I am worried that by increasing my payment, it would leave me short during the plan. I am both employed and self employed, so a portion of my income is made up of trading my way out of the debt. I have 2 Adults and 4 dependants. Given the current economic climate and the tax pains about to be inflicted on us, I am concerned to increase payments at the outset and rather enforce the opportunities of additional payments following each review. Any advice on dealing with this would be helpful. Thx DB
 
 

Skippy

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Post by Skippy » Sun May 09, 2010 2:18 pm
Hi and welcome to the forum.

Can you justify to your creditors why you need £853 for shopping? If you can justify it your IP should make a case to creditors to accept it.

I don't think that the creditors are being unreasonable about the smoking cost - £200 is a lot of money which they will want to be paid into the IVA. Some companies will put a smoking allowance into the IVA, but not that high.

What company are you using?
 
 

kallis3

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Post by kallis3 » Sun May 09, 2010 2:33 pm
I agree with Skippy.

You will need to justify shopping costs and I doubt you will be allowed a smoking allowance of £200 a month.

Bear in mind you should be trying to pay back what you can to your creditors.

You need to speak to your prospective IP about what will and won't be allowed.
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.
Bob Marley.
http://kallis3.blogs.iva.co.uk
 
 

dbni

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Post by dbni » Sun May 09, 2010 2:43 pm
Thanks Skippy, and for an excellent portal...

I am using Moore Stephens in Belfast as the IP. I am concerned about changing the expenditure at this point and how this affects credibility. I am prepared to compromise at around £450-£500max but def couldnt afford £200-£300. I wondered if the current cost of cigs at £6.30per 20 is fact today at £200. Also my personal circumstances are at separation process, but we have both agreed to this IVA to get rid of the debt. Also for sake of the kids etc remaining in their home, an agreement has been reached with my wife to allow her expenditure to be considered in the IVA. Note the IVA is in my name only. The meeting should have been held on 6th May, now adjourned until 20th May. I have a 13yr old child who is taller than average and wears adult clothes now. Justification on shopping? I live in a rural area in Northern Ireland, no bus services, so rely on my car for all transportation. I have a company car that when used for personal use requires private fuel.

Should I try and justify the current expenditure first, await a reply, then look to change or should I change things now and increase? For me it is all a projection> Until I am actually in the IVA and see the results, its a worry for me to increase anything.

I am also wondering if my personal circumstances should be conveyed to creditors or would this be counter productive? In a nut shell, this IVA is the end game. No IVA - No Personal agreement, Divorce... (12p) Agreed IVA, A Stable outcome (41p) There is not really another option considering I am stuck in the middle. D
 
 

dbni

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Post by dbni » Sun May 09, 2010 2:51 pm
Thanks All.
To clarify... £200 for cigs. Creditor 1 suggested -£100 / Creditor 2 is at £-70. Would I get away with -£50? It is my main form of stress control given the circumstances.

Also the company car is an additional vehcile that requires private fuel.
 
 

Julie

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Post by Julie » Sun May 09, 2010 3:02 pm
Hi - I would submit your expenses as they are and be prepared to justify them. You may have to reduce some but see what happens. Your IP should go through everything with you and I would advise you to be perfectly honest with your IP about your circumstances.
 
 

Shining

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Post by Shining » Sun May 09, 2010 3:56 pm
Hi I'm with the others say what you spend exactly and honestly and talk it through with your IP and see what they're prepared to put forward, bearing in mind these may be reduced. All the best. x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
 
 

dbni

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Post by dbni » Sun May 09, 2010 4:21 pm
Thanks All... Onward with the justification process. Let you know how I get on.
 
 

Adam Davies

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Post by Adam Davies » Sun May 09, 2010 4:28 pm
Hi
I think a fair compromise would get your IVA accepted and you down the route to a debt free future. I guess it is fair for creditors to ask you to reduce your smoking cost and food costs, given that they will be writing off over half of your debt.
Affordability is the key to a successful IVA so you are right to consider the creditors demands carefully
Good luck
Regards
Andam Davies
 
 

MelanieGiles

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Post by MelanieGiles » Sun May 09, 2010 4:43 pm
Your IP should have alerted you to the guideline expenditure that most of us have to work with these days, and £200 was never going to be accepted for cigarettes.

You would be kidding yourself if you allowed yourself to enter into an IVA you knew you could not afford, and if you are unable to accept the lifestyle changes your creditors insist on then I would look to other options.

I practice in Northern Ireland and would concur that the public transport system is dreadful, unless you live in one of the major towns.
Regards, Melanie Giles, Insolvency Practitioner
 
 

dbni

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Post by dbni » Sun May 09, 2010 6:47 pm
Thanks Melanie, Andy.

Am I stuck with their demands or can I use the adjournment period to negotiate on the cigs as well as showing justification for what I deemed a fair compromise and affordable? Given the volatile nature of the personal balance, which my IP is aware of, it has not been mentioned in the proposal. I am thinking I should be making all creditors aware of my personal circumstances. I am just wondering if it would be taken into consideration?
 
 

kallis3

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Post by kallis3 » Sun May 09, 2010 7:02 pm
I can't see them letting you have such a lot as a cigarette allowance. You may be told to cut back on other things to fund any extra as the rest of us have to do with such things as Sky if we want more than the basic package.

You can try, but at the end of the day it is down to the creditors to agree or not.
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.
Bob Marley.
http://kallis3.blogs.iva.co.uk
 
 

Skippy

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Post by Skippy » Sun May 09, 2010 7:07 pm
I agree with Jan, you can try to negotiate but I really can't see your creditors agreeing to such a high cigarette allowance when they will most likely be writing off a large amount of money.

If you can make cutbacks from other areas then you can spend that on cigarettes etc.
 
 

dbni

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Post by dbni » Sun May 09, 2010 7:08 pm
Is it possible to agree a start point, for instance my proposal at 41p and at the first review take a look at the figures, if surplus then pay more and up the monthly payments?
 
 

Skippy

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Post by Skippy » Sun May 09, 2010 7:11 pm
All of your surplus income must be paid into the IVA, and if your surplus has increased at your annual review your payments will increase accordingly, after taking into account any expenditure increases.
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