Receiving monies from crash whilst on an iva

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A relative has asked me what happens to the IVA when receiving cash from both the cost to replace motorbike and then cash from injuries sustained.

Basically 3 years into a 5 year plan with some kind of year extension

The insurance company has paid out 3K for bike replacement and the injury claim still ongoing

The injuries were substantial and payment of upwards 50K could be paid out

His question to me was what does he have to tell the IVA company and when?

Cars and bikes were taken into consideration at the outset and allowed as below 7K and required for work
Year 2019 (1,700/£17000mortgage repayment)Overall mortgage (71,400/165568) (44
.1%) (42/100) payments made. Total paid 2019 year £1,700

Total paid 2017 year £15,300Total paid 2018 year £13,600

Comments

  • milliemonster
    milliemonster Posts: 3,708 Forumite
    I've been Money Tipped! Chutzpah Haggler
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    He has to tell the iva company what's happening, the compensation to replace the bike is just that and the iva company will allow him to replace the bike with the monies given, some may want to see the receipt to prove that the entire sum has been spent on the purchase of a bike (and some of it wasn't just pocketed if he buys a cheaper bike for instance) but some IP's won't bother with this, just depends who you're with.

    As for the compensation for injury, it's a moot point until a sum is awarded, compensation for injury is usually allowed to be kept as it is to make up for wages lost, adaptations to lifestyle, etc etc, but again he would have to check with his IP.
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  • UpToMyNeckInIt
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    There has been advise on other forums regarding this subject:

    Many private sector IP's (though not all) take the view that compensation for pain and suffering should be treated as it is in bankruptcy and that you be allowed to keep it. (As opposed to compensation for loss of earnings, which is payable into the IVA).

    Apparently however, the following is an account from a Stepchange customer:

    ‘I phoned and spoke to my IP (advisor) today and unfortunately I will not be able to keep any of the compensation. I found this hard to believe as none of the money is for loss of earning (I was on full sick pay after the accident), it was for injury compensation only.

    In my view if it’s for personal suffering then it shouldn't be paid to creditors, but Stepchange seem to take a different view.’


    No surprise sadly, to see Stepchange yet again putting the creditor’s interests over those of the customer. (I also wonder if this was advise from a case worker, not Stepchange's IP).

    Bottom line is that you definitely need to disclose this to your IP, and check your IVA agreement (I suggest a personal letter to your actual IP, NOT a case worker), to see where they stand in this issue.

    I also think that you have a very good case if you will need any money to help with you future living costs due to the accident, and any resultant disability etc.


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