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jellyman
Junior Member
United Kingdom
187 Posts |
 Posted - 29 March 2008 : 19:47:23
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Hi,
I'm hoping someone can give some guidance to the following.
I currently Have an IVA which I have been struggling to pay for many months.
After weighing things up I have decided to go bankrupt, I have wrote to my supervisor of my IVA to ask them to put me though bankruptcy. I received a letter with the following statement 'Unfortunately there are insufficient funds in your account for me to petition for you bankruptcy due to the lack of contributions paid to date. Please note you can either file your own petition at your local County Court or I can fail your IVA and your creditors can file for bankruptcy on your behalf.'
I am hoping there is someone who has had a similar experience, I need some advice - what are the pros and cons of the offers made by my IVA company??
Will I get the same outcome if I go it alone or if my creditors file for my bankruptcy will they have more control over my income and expenditure?
Thanks
John
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 30 March 2008 : 16:06:22
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Hello jellyman
welcome to the forum
I am sorry to learn that the IVA has been a struggle.
It would be useful if you could advise us what you do for a living,if you own a house or a car and the relative values of these. It would be good for you to know the impications of bankruptcy on these.
Thee is also something called an Income Payment Agreement which may apply to you in bankruptcy - this is where you pay a contribution towards your debts for a period of 3 years. This is however a percentage of your disposable income. To give you an outline of the possibility of this happening and the contribution please indicate your monthly IVA payment.
In terms of the bankruptcy court fees - 495 from April 6th - The supervisor has said that there are insufficient funds from your IVA contributions to pay for this. Unless you have a house with equity it is also unlikely that the creditors would want to spend more money with the liklihood of seeing nothing back.
Therefore if you are to go Br it is probably that you would have to find the funds yourself. Naturally you can save for this over a few months and depending upon your situation may be entitled to a small reduction of up to 160.
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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melanie_giles
Senior Member
1191 Posts |
Posted - 30 March 2008 : 16:31:30
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| How much have you paid into your IVA and how much was the nominee's fee? The reason I ask this is because the Supervisor is supposed to retain funds to meet the cost of petitioning for your bankruptcy in the event that you default, and these funds are to be made available out of your contributions once the nominee's fee has been paid. |
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jellyman
Junior Member
United Kingdom
187 Posts |
Posted - 30 March 2008 : 19:14:03
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Hi Paul,
Thanks for your speedy reply. I will now try to answer your questions.
I am a cash register engineer, earning 20K/year before deductions.
I do not own a house, I am in rented accommodation.
I do not own a car – I drive a company car for which I pay personal mileage.
I have no assets whatsoever.
I have completed a bankruptcy expenditure form (which I downloaded); the results show I have a monthly income of £1,100 before overtime and commission. My expenses are £1236. Just from this you can see it is impossible for me to continue to pay the IVA.
You mentioned an Income Payment Agreement – please could you tell me more about this?
My monthly IVA payment in 2006 was £283.00/month. This figure is variable – 50% is taken from any overtime or commission. The payments now are £340.00/month.
Looking forward to hearing your comments – Jellyman.
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jellyman
Junior Member
United Kingdom
187 Posts |
Posted - 30 March 2008 : 19:19:40
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Hi Melanie,
Thanks for your speedy reply.
In answer to your questions:-
The nominee’s fee was £2,500.
Total paid so far is £4,859.
Total unsecured debt as at 31st March 08 - £34,829.
Looking forward to hearing your comments – Jellyman.
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melanie_giles
Senior Member
1191 Posts |
Posted - 30 March 2008 : 20:51:35
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| Was it a single or a "joint" IVA? |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 30 March 2008 : 21:02:31
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Hi jellyman
The Income Payment Agreement is an opportunity to contributw towards your debts ( and the costs of administering your bankruptcy)while you are in bankruptcy.
It is usual for contributions to start once you have a disposable income of 90 per month or more. A percentage of this disposable income is deducted and this contribution starts at 50% ( it increases if your disposable income increases).
From the figures you demonstrate it is highly unlikely that you would be subject to one.
Also from your job and asset overiew you will be fine ( please double check your emplyment contract ).
Something else to keep in mind is that during the financial year - assuming you go Br after 6th April - your tax code will change to an NT ( NO TAX ) tax code. Your tax will not be deducted as source but rather paid directly to you and you will need to forward this sum to the official receivers agent.
melanie has a point regarding the supervisors responsibility so hopefully you can answer this and M can assist further.
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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jellyman
Junior Member
United Kingdom
187 Posts |
Posted - 30 March 2008 : 22:01:52
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Hi,
I have a single iva.
thanks
John |
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melanie_giles
Senior Member
1191 Posts |
Posted - 30 March 2008 : 22:19:15
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| Hmm - I think you need to check the terms of that agreement again, because your IP may be responsible for paying for the cost of bankruptcy. |
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jellyman
Junior Member
United Kingdom
187 Posts |
Posted - 31 March 2008 : 14:28:44
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Hi,
I have contacted my ip again and they still maintain that there are insignificant funds available for them to make me bankrupt. I can’t find the original terms I signed so I can’t check if they are responsible.
So it looks like its back to the same question, is it best for me to make myself bankrupt or should I let my creditors make me bankrupt?
Thanks John
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melanie_giles
Senior Member
1191 Posts |
Posted - 31 March 2008 : 23:11:56
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| Get the IP to send you copies of the papers as you should not just accept what they are telling you. It may well be that they have drawn fees they are not entitled to, instead of holding back money to pay for your bankruptcy. |
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jellyman
Junior Member
United Kingdom
187 Posts |
Posted - 02 April 2008 : 22:41:29
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Hello,
I have just been e-mailed a copy of my original proposal by my ip.
This is what is in the terms.
12.7
In the event that the amount I have paid into the Voluntary Arrangement is greater than the total of
(a) The Nominee’s fee and
(b) Any costs incurred by my Nominee or Supervisor,
the Supervisor shall arrange for a bankruptcy petition to be issued against me should I be in default of any obligation under my proposal for any reason whatsoever. The Supervisor will retain sufficient funds to petition for my bankruptcy and such funds are to take priority over the Supervisor’s fees.
12.8
In the event that insufficient funds to cover the Nominee’s fee and costs of the costs incurred by my Nominee or Supervisor have been received at a time when the Supervisor would otherwise wish to petition for my bankruptcy, she shall advise the creditors of this, and shall issue a Certificate of Non-Compliance.
It looks like if they say there is 'insufficient funds' they can get out of paying for the bankruptcy.
Can anyone clarify this?
Thanks John |
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melanie_giles
Senior Member
1191 Posts |
Posted - 02 April 2008 : 23:25:59
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As I thought - the clause says that the requirement to retain funds to petition for your bankruptcy takes priority over the Supervisor's own fees.
You have paid in £4,859 and the nominee's fees are £2,938 (including VAT) which leaves £1,921 for bankruptcy - maybe slightly lower as they will have paid for bordereau and registration as well.
You should now ask them for a detailed receipts and payments account to see how your money has been spent. I would put money on it that they have drawn some supervisory fees! |
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jellyman
Junior Member
United Kingdom
187 Posts |
Posted - 03 April 2008 : 14:19:00
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Hello,
I have just been sent via email an up to date receipts and payments account here is what they have said:
ASSET REALISATIONS
16,980.00 Debtor Contributions 5,182.00
Bank Interest Net of Tax 12.14
Overtime & Bonus's 244.00
Total 5,438.14
COST OF REALISATIONS
Specific Bond 19.00
(2,500.00) Nominee Fee 2,500.00
(4,500.00) Supervisor’s Fees NIL
(185.00) Office Holders Expenses NIL
DTI FEES 15.00
(1,138.00) VAT Irrecoverable 437.47
(2,971.47)
UNSECURED CREDITORS
(36,442.00) Unsecured Non-Preferential Creditors 2,047.99
(2,047.99)
(27,785.00) 418.68
REPRESENTED BY
Current Account 418.68
Hopefully you can understand this. Basically they are saying there is only £418.68 left and they need over 1,300.00 to proceed with bankruptcy.
Regards John
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 03 April 2008 : 16:30:41
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Good luck Jellyman. I went BR a year ago after my IVA failed and I had to fund the BR application myself as I had made insufficient payments to allow my supervisor to do it.
Regarding the IPA, I found that the OR was a lot more generous in my allowance than when I was in my IVA. I am paying less than half of what I was.
Where there's life there's hope! |
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melanie_giles
Senior Member
1191 Posts |
Posted - 04 April 2008 : 01:41:49
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| They should not have paid creditors without providing a bankruptcy fighting fund - so I suggest you be bullish about this and demand at least sufficient funding from them to pay for a debtor's petition. You have a strong case here - so fight on. |
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Topic |
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Bankruptcy Proceedings
