pari passu principle?

psrlva

hi, I have written to all my creditors to share out my assets on a pro rata basis. They all get a certain percentage no matter the amount I owe them so everyone is treated fairly and no one gets more than their fare share. One of my creditors says this is against the pari passu pricnciple that I must adhere to but everything I read says that this is exactly the pari passu principle! This is a legal team who are saying this so you would think they were correct . Can anyone explain this principle and how it differs to pro rata?

sourcrates

Are you currently Bankrupt ?

If your not, I will move your post to a more appropriate forum.

psrlva

oh sorry no Im not...just teetering on it!

sourcrates

Ok, moved it for you.

"pari passu" means equally shared, so payments are divided equally.

"pro rata" means in proportion, so a payment in proportion to what is owed.

Are you contemplating a debt management plan, or what is your current situation ?

Sandtree

psrlva said:

hi, I have written to all my creditors to share out my assets on a pro rata basis. They all get a certain percentage no matter the amount I owe them so everyone is treated fairly and no one gets more than their fare share. One of my creditors says this is against the pari passu pricnciple that I must adhere to but everything I read says that this is exactly the pari passu principle! This is a legal team who are saying this so you would think they were correct . Can anyone explain this principle and how it differs to pro rata?

As always, when people try to sound clever by using latin legal terms, get them to explain what they mean.

Pari passu would be that all creditors are treated equally but that assumes that the creditors are equal but this may not be the case if some are secured debts or HMRC is one of your creditors etc

psrlva

Sandtree said:

psrlva said:

hi, I have written to all my creditors to share out my assets on a pro rata basis. They all get a certain percentage no matter the amount I owe them so everyone is treated fairly and no one gets more than their fare share. One of my creditors says this is against the pari passu pricnciple that I must adhere to but everything I read says that this is exactly the pari passu principle! This is a legal team who are saying this so you would think they were correct . Can anyone explain this principle and how it differs to pro rata?

As always, when people try to sound clever by using latin legal terms, get them to explain what they mean.

Pari passu would be that all creditors are treated equally but that assumes that the creditors are equal but this may not be the case if some are secured debts or HMRC is one of your creditors etc

Thank you, that now makes more sense. This creditor is trying to become a secure creditor 6 weeks after I have written to all my creditors to offer them a settlement offer. Some have already accepted my offer, so I beleive I was acting fairly at that point in time. 

psrlva

sourcrates said:

Ok, moved it for you.

"pari passu" means equally shared, so payments are divided equally.

"pro rata" means in proportion, so a payment in proportion to what is owed.

Are you contemplating a debt management plan, or what is your current situation ?

Im trying to manage it all myself and have sold everything I own and am dividing it up between all my creditors

EssexHebridean

Whoah - back the truck up, who on EARTH has told you that the best way of dealing with debt is to sell all your belongings and go straight to full & finals? Thatis not what a DMP is at all - have you had any advice on your situation as yet? 

Might be a sound idea to put together your SOA (Statement of Affairs) if you haven’t already - post it in here and let us see what suggestions we can make, perhaps.  You’d be surprised how often poking in from the outside we can see solutions that might not have occurred to you. 

psrlva

EssexHebridean said:

Whoah - back the truck up, who on EARTH has told you that the best way of dealing with debt is to sell all your belongings and go straight to full & finals? Thatis not what a DMP is at all - have you had any advice on your situation as yet? 

Might be a sound idea to put together your SOA (Statement of Affairs) if you haven’t already - post it in here and let us see what suggestions we can make, perhaps.  You’d be surprised how often poking in from the outside we can see solutions that might not have occurred to you. 

well the experts said to do a lump sum iva, im just trying to do the same thing without the iva part being associated with my name. Ive had enough of all the threatening letters and feeling ill and stressed with it all. I accept I owe this money so I want to pay back as much as I can and walk away. The debt is all from my business. 2 PG's that I cant get out of and some other smaller loans. ive done the hard bit of selling my family home, I just want to share out the money and draw a line under it. I am talking about a lot of debt here.

RAS

I'd suggest you ditch the "experts" and talk urgently to one of the debt charities like Stepchange.

Since you've sold the house, there's unlikely to be anything on which the creditors can secure a debt. And an IVA is a poor idea, unless you are a provider who creams off the first couple of years payments as fees before your creditors get anything.

Even then, there are other debt solutions many creditors will accept.

So ring a debt charity for starters.

Pixie5740

I’d suggest Business Debtline in this instance as there are personal guarantees from businesses. 

@psrlva if you’ve sold the family home what is this creditor going to secure the debt against?