2nd year review part 3

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JustPlainStupid
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by JustPlainStupid » Mon Aug 07, 2017 8:12 pm
Hi all

I've been asking some questions at my 2 year review and got some figures back...

There's a column marked SofA. The total is £55624.
There's a column marked Claim. Some of the amounts have jumped quite a lot between these. For example, one of the Lloyds ones has gone from £2000 to £5600 - I have asked why. Anyway, the total of this column is £67468.

Fees on top are £13784 giving a total of £81263.

This means that I hit 100p in the pound with my new payments at month 63 - 3 months after the 5 years, but 9 months before the end of the 6th year if they'd forced that instead of getting me to take equity.

Any thoughts on what I should be thinking/doing? Should I just accept the proposed new payment? Should I be pushing to finish at 5 years and getting them to accept less than 100p in the pound?

Also, I think I'm getting confused with this statutory interest thing.

Let's say I get to month 59. So, by then, hopefully I will have paid back £6000 (ish) short of 100% of the debt plus fees. Let's say I get a £20k windfall. Could they take the 20k AND make me finish the IVA payments on the basis that they haven't added SI in to date?

Cheers
Andy
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Foggy
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by Foggy » Mon Aug 07, 2017 8:34 pm
If S.I hasn't been excluded then, yes, they will take whatever amount is needed to cover the debt, fees AND S.I -- If they intend to add this in. If they do not intend to add S.I the IVA will stop when you ghit debt and fees, whether that be a month before the end or a year before the end.
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Lisa Thomas
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by Lisa Thomas » Tue Aug 08, 2017 11:51 am
JustPlainStupid wrote:
Hi all

I've been asking some questions at my 2 year review and got some figures back...

There's a column marked SofA. The total is £55624.

Sof A stands for 'Statement of Affairs' This is the figure that you estimated was due to your creditors.

There's a column marked Claim. Some of the amounts have jumped quite a lot between these. For example, one of the Lloyds ones has gone from £2000 to £5600 - I have asked why. Anyway, the total of this column is £67468.

This is the actual claims that creditors have submitted to your IP. It will rarely agree to the SOA figure exactly. The Supervisor will adjudicate claims before paying any dividend to creditors.

Fees on top are £13784 giving a total of £81263.

I presume this is fees to date and will only be relevant if the creditor claims total is correct and if a payment in full becomes available.

This means that I hit 100p in the pound with my new payments at month 63 - 3 months after the 5 years, but 9 months before the end of the 6th year if they'd forced that instead of getting me to take equity.

Any thoughts on what I should be thinking/doing? Should I just accept the proposed new payment?

What new payment are you referring to?

Should I be pushing to finish at 5 years and getting them to accept less than 100p in the pound?

You have to pay over what you can afford - if you don't you are at risk of breaching and failing your IVA.

Also, I think I'm getting confused with this statutory interest thing.

Interest only applies if there are enough funds available to pay off the total debts, costs and interest in full.

You can sometimes ask creditors to waive their entitlement to interest.

Let's say I get to month 59. So, by then, hopefully I will have paid back £6000 (ish) short of 100% of the debt plus fees. Let's say I get a £20k windfall. Could they take the 20k AND make me finish the IVA payments on the basis that they haven't added SI in to date?

Yes if the amounts paid in are not enough to cover the debts, costs and interest then they can take the windfall too.

Cheers
Andy
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JustPlainStupid
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by JustPlainStupid » Tue Aug 08, 2017 1:21 pm
"Fees on top are £13784 giving a total of £81263.

I presume this is fees to date and will only be relevant if the creditor claims total is correct and if a payment in full becomes available."

This is on the statement they just sent so I'm assuming this is fees for the term of the IVA

"Any thoughts on what I should be thinking/doing? Should I just accept the proposed new payment?

What new payment are you referring to?"

The proposed new payment from the 2nd year review

"Should I be pushing to finish at 5 years and getting them to accept less than 100p in the pound?

You have to pay over what you can afford - if you don't you are at risk of breaching and failing your IVA."

I'm not suggesting anything else. I'll hit 100% at 5 years and 3 months. I can see 3 possibilities based on the probable fact that I won't be able to re-mortgage to release equity:

1. They'll play nicely and finish the IVA at 5 years based on almost 100%
2. They'll want me to do 5 years and 3 months to hit 100%
3. They'll push for 6 years on the basis that the payments to date don't cover SI
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Lisa Thomas
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by Lisa Thomas » Tue Aug 08, 2017 1:44 pm
JustPlainStupid wrote:
"Fees on top are £13784 giving a total of £81263.

I presume this is fees to date and will only be relevant if the creditor claims total is correct and if a payment in full becomes available."

This is on the statement they just sent so I'm assuming this is fees for the term of the IVA

If this is a statement to date then it is likely fees for the period in the report only. i.e excluding future fees.

"Any thoughts on what I should be thinking/doing? Should I just accept the proposed new payment?

What new payment are you referring to?"

The proposed new payment from the 2nd year review

I presume this is an increase to your regular contributions. As long as the calculations are correct you don't have a choice about accepting it unless you are prepared for your IVA to fail.

"Should I be pushing to finish at 5 years and getting them to accept less than 100p in the pound?

You have to pay over what you can afford - if you don't you are at risk of breaching and failing your IVA."

I'm not suggesting anything else. I'll hit 100% at 5 years and 3 months. I can see 3 possibilities based on the probable fact that I won't be able to re-mortgage to release equity:

1. They'll play nicely and finish the IVA at 5 years based on almost 100%
2. They'll want me to do 5 years and 3 months to hit 100%
3. They'll push for 6 years on the basis that the payments to date don't cover SI


1. Only if creditors waive their right to SI. Failing which you will continue paying until all paid off or the end of 6 year term whichever comes first.
2. Only if your calculations are correct but I think you will find future costs and interest will apply.
3. Agreed.
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JustPlainStupid
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by JustPlainStupid » Tue Aug 08, 2017 1:56 pm
This is what HB have come back with:

1. On the basis that your voluntary contributions remain at £1,595.00, you would be required make payments for the existing term.
2. The predicted date to complete is December 2020.
3. The debt in the arrangement is £67,479.37.
4. The total arrangement costs are estimated at £13,784.60
5. As the receipts are from know assets no statutory interest would be applied. If any windfalls are received during the term this may be applied.
6. If 100p/£ is achieved then the equity release would not need to be completed, however we would still require you to provide the requested documentation 6 months before the end date in case there are any changes to your circumstances in the future which would mean 100p/£ would not be achieved.

I still feel like they're not giving me full answers in some cases.
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Foggy
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by Foggy » Tue Aug 08, 2017 2:13 pm
I feel their approach to the application of statutory interest is .... inventive ? Unique ??
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Michael Peoples
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by Michael Peoples » Tue Aug 08, 2017 2:31 pm
In fairness to HB I think they are correct and trying their best to clarify the situation. Many proposals have been written whereby SI applies to windfalls but not where the debts are repaid in full over time. The thinking behind this is that it would penalise a debtor repaying in full and provide an incentive to keep the return below 100p.

Our cases exclude statutory interest in all occasions as part of the proposal but a creditor can modify it back in. When this happens it normally again only applies to windfalls and not contributions.
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Foggy
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by Foggy » Tue Aug 08, 2017 2:51 pm
Michael Peoples wrote:
In fairness to HB I think they are correct and trying their best to clarify the situation. Many proposals have been written whereby SI applies to windfalls but not where the debts are repaid in full over time. The thinking behind this is that it would penalise a debtor repaying in full and provide an incentive to keep the return below 100p.

Our cases exclude statutory interest in all occasions as part of the proposal but a creditor can modify it back in. When this happens it normally again only applies to windfalls and not contributions.



Interesting. I must admit that I have not come across this distinction before in my, albeit limited, experience but have seen a few mentioned on here where they go into S.I., having met the debt and fees from routine contributions. I wholeheartedly agree with the wish to avoid penalising a debtor for paying the debt back in full and. personally would like to see S.I. completely removed from the equation.
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JustPlainStupid
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by JustPlainStupid » Tue Aug 08, 2017 2:56 pm
Our cases exclude statutory interest in all occasions as part of the proposal but a creditor can modify it back in.

This is what gets me down about the whole IVA model. Someone said that they're not supposed to be a punishment. But it's like the rules and expectations are just vague enough that you're kept with this sword of Damacles hanging over you for as long as possible. So right up until the eleventh hour, 59th minute and 59th second they could add it back in. Is there anything that prevents a creditor doing it just because it's raining outside? I'm not talking about "generally, they don't do it". I'm talking about a rule that they have to adhere to.

But the dirty debtors are kept in their place by being made to feel grateful that we've been allowed to do this; like the creditors loaned the money out of the goodness of their hearts without understanding the risks.

When this happens it normally again only applies to windfalls and not contributions.

See, this seems like a fair treatment.
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Michael Peoples
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by Michael Peoples » Tue Aug 08, 2017 3:13 pm
Any modifications can only be proposed at the meeting of creditors and not later on. You should know at the very beginning your entire obligations as otherwise it would be really unfair.

Adding SI to contributions is totally wrong in my opinion as you could have a situation whereby one debtor repays 99p in the £ and the IVA completes whereas if they repaid one more penny their IVA could be extended to bring in SI. That would be perverse.
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Foggy
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by Foggy » Tue Aug 08, 2017 4:00 pm
As Michael says, they cannot add it back in at their whim. Debtors, creditors and the IP alike can only act within the agreed terms of the IVA and these things should be sorted out and laid down at the outset. Unfortunately most debtors are unaware of the ramifications and, frankly, probably at the end of their rope at this time and it requires a Nominee to act fairly on their behalf, as McCambridge Duffy do. Sadly there are some firms who are more creditor centric.
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JustPlainStupid
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by JustPlainStupid » Wed Aug 09, 2017 9:45 am
Just spoken to HB. They've confirmed that there's just no way that the creditors will add SI unless there's a windfall. Because I'll be very close to paying 100% at the 5 year point, the won't look for the equity release, and it MIGHT even be that they'll complete at 5 years even though it won't quite be 100%. I had a payment break which I then made up over 10 months, which they'd not factored in. So it looks like 100% will be 5 years and 1 month.

Their PPI investigations are still ongoing, which I find odd. It's been 2 years so I would have thought they'd have this sorted. If there is any PPI then this will bring forward completion a bit more.

All in all, I'm starting to feel ok with this. I'll end up paying back more, but I'll be free a year earlier than I thought which is better in my mind.

Cheers for your help, all!
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Foggy
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by Foggy » Wed Aug 09, 2017 10:37 am
The problem with PPI is that the banks are still trying to get out of refunds that are properly due, so the ombudsman says to resubmit previously refused claims. So far some claims have been resubmitted several times before the bank finally owns up.

I will say nothing about the morals of the banks in this matter !!
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Michael Peoples
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by Michael Peoples » Wed Aug 09, 2017 11:13 am
I think HB are doing their best for you and you will be out of your IVA before you thought. Creditors paid in full, HB receive a decent fee for their work so there have been benefits all round.
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