DMP or IVA HELP NEED ADVICE

Charco_2

Just to prepare you:

Your creditors MIGHT ask your father in law to step aside for the purposes of the dividend.

He will of course be allowed to vote in favour of your IVA. This requires 75% of your creditors to agree but, if there is a dissenting vote from any of your other creditors (since your father-in-law is an associated creditor) there will then be a second vote that your F-i-L does not vote in. This second vote will go ahead as long as 50% of your creditors dont say no! (to be rejected, 50% of your creditors MUST REJECT!)

If this second vote goes ahead your creditors might require that your F-i-L steps aside and that all money paid into the IVA goes to your non-associated creditors... the assumption being that at some stage you will get around to repaying your F-i-L anyway.

Your F-i-L can of course refuse to step aside and the IVA can go ahead as long enough of your creditors haven't dissented!

debtiva

Hi, how i understand it from payplan is................the expenditure which includes £300 a month for my f.i.l leaves £330 ish for the creditors.

they said i will pay my f . i .l for 47 months and after that i will have £300 extra surplus so i will then be paying £630ish until the end of the iva.

Thats what payplan have told me when we first spoke on the phone and went threw debts/wages/expenditure.

i don't think they are putting my father in law in the iva, they have classed him as our expenditure

Charco_2

I would have thought that thats illegal! It's whats known as "preferential" - preferring one creditor over another

It's not the first time I've seen it (wasn't Payplan the other time) but it's basically telling all other creditors to whistle for it while you repay another creditor in full.

Could you imagine telling mbna, capital one and mint that they're going into an IVA Snd will probably get 40% of their money back but that you like Bank of Scotland - the cashier was always so nice - so you're going to repay them in full!?

Charco_2

I've just checked:

Illegal preference unless disclosed...

I cant see it being accepted or allowed by other creditors but I do wish you good luck!

debtiva

well god knows, i am new to all this can only go by what am told...........................

we have to pay back f.i.l in full there is no two pays about it, so i will find out full details when i give back forms tomorrow, because if its the case that he will get a small slice of the pie then it will have to be a crappy dmp for 15 years ...............got complete brain ache from it all now, have read too many posts and just confused again now, i woke up feeling possitive and that an iva was the right way to go as long as we kept up the payments we would be debt free in much lesser time than a dmp and not have hassle from creditors while in iva.

am fed off to bed now for another sleepless night !

Charco_2

I am sorry Debtiva, it was not my intention to scunner you. I know this process is hard enough!

FoggyBrain_2

I know it is all confusing Debtiva ,, but best to go in with eyes wide open. A few weeks ago I was just floundering in debt problems. After reading around the forums I have al least some knowledge, am minutes away ( as I type) from the creditors meeting, and, hopefully, will soon be on the road to recovery (sounds like AA!).

You will get a lot of help from the members here and loads of good advice. Keep at it -- all will get better as the fog clears :-)

dancingfairy

With a dmp I feel you will have similar issues - again you can't expect to split 330 a month between your creditors when you are repaying in full the 300a month to your fil - they aren't exactly going to be happy - the only way I can see it working is to take the 660 a month surplus and split it proportionally between all your creditors, including your FIL (this is for a dmp).
I totally understand that emotionally it is not that simple though - good luck sorting it all out.
With a dmp though you do your budget and set yourself a reasonsable amount for food ,clothes etc - at the end of the day though - if you can feed your family for 500 and then you manage to really pull in the reins and feed them for 450 instead then that would free up an extra 50 a month which you can use to save for full and final settlements, an emergency fund etc. Same for clothes - 100 a month might be reasonable but again you could maybe clothe them all from a charity shop/hand me downs so any extra you saved could be put to another use- it might be worth posting an SOA on the dfw board as they know all about dmp's.
df

FoggyBrain_2

Interesting Dancingfairy ..... I take it from your post that, if you can save from allowances, that can be offered as F&F in due course ( assuming you save enough ). Is that so for an IVA ? I thought any F&F ( apart from an enourmous windfall big enough to cover the whole debts) had to be third party funds ( relatives, rich mates etc.) .

Can see being able to save that sort of money from allowances ... but it could yield enough to add to third party funds to tip the balance and get it accepted.

Charco_2

A full and final doesn't HAVE to be third party funds.

It obviously more often than not has to be unexpected so not already accounted for in the IVA. A recent example (twice) on here concerned conditional money... the money would only be available if the person changed their circumstances but there was no obligation to change, the debtor was only willing to change then if it meant they could end their IVA with an F&F.

Another example might be where someones circumstances change so drastically that their current IVA is impossible... in extreme circumstances, if the debtor is unable to pay a single penny more the creditors might even be willing to accept that what they have already received is now the F&F offer!

However if you are trying to engineer a situation whereby you could offer a F&F then most commonly the money would come from a third party.