Calculation For Early Settlement ???

bellissemma

Hello. Could anybody help me on the above?

I put an offer in (4500) to close an IVA (9750 left) and just wondererd what the process is when they say they have passed the calculation for early settlement to my insolvency practitioner. I paid all my fees up front (at least I think i did)

Nick700

Good morning,

There should not be much calculation involved if you paid all your fees up-front. It would be a simple case of the Insolvency Practitioner calculating what you have paid in-to-date plus your offer and using this to calculate the likely dividend to creditors. The IP would then circulate your creditors with your offer and they would vote yes or no. It is a similar process to your first meeting of creditors, with normally 75% in value of your creditors who vote on your early settlement needing to vote in favour of it. Assuming there are no unforeseen problems, this is a process which should take around a month, until your variation is approved, as your creditors need to have at least 14 days notice of any variation.

In IVAs, there are two types of fees - Nominee and Supervisor fees. Nominee fees are basically the fees for setting up your IVA and Supervisor fees are the fees for administering your IVA during it's life. It is possible that you have paid your Nominee's fees upfront, but it is unlikely that you will also have paid your Supervisor fees and therefore your IP will also need to deduct those from the amount you have paid in.

So to summarise, your IP should take a few days to approve your early settlement offer, and then call a meeting of creditors, if your variation is approved, then you pay in the lump sum and your IVA is soon finished and your unsecured debts discharged. If your variation is rejected, then your IVA will continue on it's original terms.

Variations are an excellent tool if someone cannot continue with the original IVA proposal, as they help allow the IVA to successfully reach a conclusion on revised terms.

Hope that helps.

Nick

bellissemma

you are absolutely right, i have just looked at my contract, and I didnt know this but the fees are £4500!!! I had no idea it was so much. £2500 are nominiees fees and £2000 are the other. Well I never!

Charco_2

That's about right, £2000 nominee and £500 per annum supervision.

It's the creditors who agree the fees with the IP, so while you're paying in say £15000 over 5 years, the banks accept that a reasonable cost to recover the debt is £4500 to £5000.

In more complicated cases, like self employed individuals, multiple assets (landlord with 15 houses for example), these fees can rise depending on how much work and hours the IP may have to put in to recover everything for the creditors.