Is 30p in the £1 an acceptable amount

the_bright_side

Looking at IVA figures with my IP and they have mentioned that 30p in the £1.00 may not be accepted, I thought that was an adequate amount, is that correct?

I owe £143,000 and was offering £50,000 over 60 payments.

FoggyBrain_2

I have seen dividends as low as 18 p / £ accepted (and, indeed, as high as 70/£ rejected!). Mine is 33/£, and was accepted with no problem. It all depends on the creditors, at the end of the day, not the IP. They might move to have the proposal amended so that the IP gets less in fees, which will increase the dividend to the creditors, which seems to be happening more and more these days.

Charco_2

It's not up to the IP to accept or reject your proposal... It sounds perfectly reasonable to me (sounds like your IP just wants more)

If you feel that £50k is as much as you can afford then that's how much you should offer... Your creditors might come back with a counter-offer (which you will have to decide on whether you agree or not) but that's just part of the negotiation.

30p is a reasonable dividend (and as Foggy says, this could rise when the creditors start to question the fees your IP will charge).

The counter-offers can include things like uplifts or extensions.
An example of an uplift is where you have put down £570 as your expenses for food and toiletries for a family of 5, but your creditors come back to say that they feel £500 is more reasonable and that you should pay the £70 difference into the IVA.
OR if you have £35 for your monthly gym subscription they may say "run the streets instead"
(Tis negotiable!)

An extension (usually if Northern Rock are involved) might be that your IVA would run for 72 months (6years) instead of 60 (5 years).

dbt3mummy

We've almost finishing paying ours and our creditors will get 43p/£
Our IP is a bit rubbish and did try to blame their lack of basics maths skills on us and tried to push for an extension - - meaning another meeting we would have to pay for.

We managed to do a few sums before them and came up with a way of stopping the extension.

The next 8 payments cannot come quick enough!!

Good luck

strugglebunny

Hi - it may help you to know that my IVA was accepted last week at 20p in the £ and modifications to the proposal were for the IP fees only.

When I received the proposal for this amount, I did question whether this was likely to be accepted and I was told that creditors tend to accept 17p and above, so I dont see why your 30p in the pound would not be acceptable. As the knowledgable posters have already mentioned its down to the creditors to accept or reject, not the IP.

Hope it all goes well for you!

the_bright_side

Thanks for your replies. I am awaiting a revised agrement now. I will keep you all informed.

Charco_2

JazzyJeff, you are right to a certain extent in what you say but in this scenario (£143,000 debt against £50,000 repayments) the figure of "30p in the £" IS realistic in that it already includes IPs fees in the region of £7,000.

Not entirely unreasonable and in line with the 15% of realisations the banks are pushing for as remuneration for the work carried out.

If the fees are unreasonable, your creditors (or creditors representatives) will slash them in the creditors meeting.

30p in the £ is a reasonable return if realistically this is what you can afford... if you can afford more you should pay more, if you can only afford less then only offer less!

the_bright_side

Thank you for your replies, I looked more closerly at the figures and it was close to 20p in the £ after all of the IP costs which is roughly £9200.

Charco_2

Still a perfectly reasonable amount to be offering, IF that is what you feel you can afford to offer. You shouldn't hold back unreasonably, neither should you over-extend/commit yourself...

I would wager that when it goes to the creditors meeting that those fees will be slashed... if you're offering £50,000 the fees will likely be cut to around £7,500 or so! (but that wont affect you, that part is between your IP and his creditors)

If you feel you may be being pressurised by your IP to offer more than you can afford, stand your ground or find an alternative IP!

Devon_Sailor

Hi,
First post, first time looking at the site properly, so please be kind!

I am in the process of doing an application with PayPlan for a DMP, because I have been very nervy about the whole IVA process and its implications. I owe £66000 and PP have initially calculated, or proposed, monthly payments of about £750pm, but you guys are talking about IVA offers of 30p per £, which by my basic calcualtions seems as though I am being hung out to pay WAY over the odds???

Is this right or am i getting the wrong end of the stick? Should I be challenging them and saying I want to put in an offer at 30-40p per £, and effectively slash my proposed repayment figure by half?!!?

Any thoughts are much appreciated!

FoggyBrain_2

Hi Devon Sailor. In a DMP you are attempting to repay ALL of your debt (and hoping that the creditors stop adding interest and charges). At the rate PP propose this will take you just over 7 years. You cannot offer a reduced amount in a DMP.

In an IVA the IP will calculate what you can afford to pay each month, multiply that by 60 and you get the total you can afford to repay. During the course of the IVA you will still owe the total debt ( but interest and charges will definitely be stopped, by law). However, assuming you pay on time, at month 60 anything left unpaid from the total debt will be written off.

This is on the assumption that you have no equity in property to be dealt with, which often is addressed by extending the IVA term by another 12 months, when equity cannot be released. Equity under £5k (at 85% LTV) is usually ignored.

What are the particular implications with IVA that concern you?