A bit of advice needed

Pegasus80

Hi. I am new to the forum and just wanted some advice or any opinions on the following scenario....In 2011 my IVA failed (at my own request). Basically I allowed my house to be repossessed (at my request) and to be honest I thought the Debt management company was rubbish. The company I was dealing with (a well known Debt Management company) sent me a letter in 2012 confirming a breach and implied they would end the IVA within 30 days and I would be back at the mercy of the creditors. Over the last 3.5 years they have continued to send my supervisors reports (with claims I had not cooperated with them) and an endless stream of PPI claims stuff. I have never had PPI though did fill out an authorisation form. Basically over the last 3 years I have been waiting for something to happen. Not heard form any creditors (and the original debts have began to drop off my credit file). Out of the blue in August this year I was served with a BR petition from my friends at the Debt Management company (no warning). I have actually been unemployed for last 7 months so IVA would have failed anyway. The cite the lapse of my IVA and non-cooperation. I immediately took advice from a solicitor and in a nutshell (with the help of a loan from a family member) offered full and final settlement of the debts (roughly 60% of the original IVA). Their solicitor has responded and said they are prepared put this offer to the creditors and seek adjournment of the hearing IF I pay their legal fees of £2.5k - which is approx 50% of my settlement offer and they want this ON TOP of my original offer. This seems outrageous - especially in light of the fact they are seeking my BR and supposed to be acting in the interests of the creditors. I would welcome any views in particular whether they would be able to claim this if it went to court. I am literally 2 weeks now into a new job but this could be at risk if I went BR. I think realistically I could be subject to an IPA of £200 - £400 pounds - though to be honest I am not sure it would be worth my while working as I have round commute of 100 miles each day. I have no other assets.

debt_doctor

Hi,
As they have actually served a petition then they have incurred the costs of the deposit and court fee as well as some legal costs - so they are 'out of pocket' to some extend - probably at least £1500.


Never think that insolvency is about getting a return for creditors, it's mainly about the government and (especially) Insolvency Practitioners gaining lots of money for little effort.
The IP (like all IP's) want to win and win -
If they don't make you bankrupt they want you to pay for their fees and to take all the genuine full and final monies at least in part as further 'costs' involved with the IVA.


If they do make you bankrupt then they will be appointed (if they wish) as your trustee in bankruptcy - so will be in receipt of 3 years worth of IPA payments (if you stay in work). This money would go to the government (case management and Secretary of State fees, and IP fees - highly unlikely that the creditors would see much of that.


They have petitioned for your bankruptcy, and whilst you may well have some argument about the level of their fees, they have incurred some fees -as I said at least £1500 ish.


Sadly I don't see much of a bargaining position because they are not bothered whether they make you bankrupt or not - they have spent their money - and they want a return from you paying the fees plus full n final monies OR they want the 3 years IPA monies (or part of).


It will ultimately be down to haggling, the courts won't really come in to it as the negotiations on whether to settle and withdraw the petition are outside the scope of the petition itself - it's a side show going on in the background.


Sorry I can't be more positive.


DD

National_Debtline

If you need to prevent a bankruptcy in order to keep your employment then (as the debt doctor says) you are realistically going to need to pay what they are asking. If that is not possible and they will not renegotiate their fees then it would be very likely the bankruptcy would go ahead (especially if they have taken the time to serve the petition and not just the statutory demand).


Once you are bankrupt it is exceptionally difficult to reverse so if you really don't want it to go ahead you should get full telephone advice asap about possible tactics you can use. Good Luck Pegasus80


Laura
@natdebtline

Pegasus80

Thanks Debt doctor - I agree with all your points - its all a cynical money making scheme for the IPs. The scary thing these idiots are also allowed to manage your estate post BR. They reckon they did not contact me for 3 years as the wanted to avoid BR, the truth is the wanted to squeeze every last fee they could out of the IVA (foremost PPI) and then cynically go for BR for more fees. Alas they may come unstuck in my case as if I don't lose my job because of BR, then if I get lumbered with a big IPA it won't be worth my while working. I personally think the Insolvency laws need a complete overhaul to offer more protection for those who find themselves in debt. The BR law is a joke though the biggest jokes are the Debt Management companies!!

Pegasus80

I am using a insolvency solicitor who is negotiating for me (though not sure if he is any good as he does not seem that proactive) but was interested in the opinions of others on here . I only have myself to blame in a sense letting it get this far. It just amazes me they are able to try recover such huge fees for people who they know are in serious debt. The biggest joke of all is that I went to these clowns in the first place for help!!

Pegasus80

One other question - was exactly is a statutory demand? Should I have had one? They sent me an IVA breach letter in 2012 and then nothing since. The first I knew of BR was when a private investigator appeared on my doorstep and served with the BR petition.

debt_doctor

Pegasus80 wrote: »

One other question - was exactly is a statutory demand? Should I have had one? They sent me an IVA breach letter in 2012 and then nothing since. The first I knew of BR was when a private investigator appeared on my doorstep and served with the BR petition.

An IP can go directly to court to begin bankruptcy proceedings. A Statutory Demand is a 'pre warning' of bankruptcy by a creditor that they may decide to make you bankrupt.
The terms of youR IVA already pre warned you that failure may result in bankruptcy, so no requirement for further warning.


- and by the way, I agree with everything you said too!


DD