iva & student loan

dan_brum

Hi
My iva is now complete, though in the last year i found a government document that said pre 1998 mortgage style student loans can be included within an iva.
So i sent this to the IP who duly replied (after several chase emails) stating the the student loan is now included within the agreement.
Sounds good, i chased for a revised list of debtors but never got one.

Unfortunately the SLC had sold one of the accounts to another company, and kept hold of the rest, and it turned out that the IP included only the student loan from the sold off account. Leaving the rest untouched.
After chasing several times for clearer details all i got back were emails saying "yes the student loan is included. Again sounds good until i get the completion certificate showing a payment for the single account but nothing for the others.
The IP even incorrectly sent a cheque to the SLC which was returned to me and i forwarded on.
So I wrote to the IP complaint dept listing all the correspondence including those stating that its included and that i expect them to remedy their error.

The reply I got back, was the obvious no, they said they made a mistake and should not have included any of it. They point to a clause that says 'this iva is prepared without a clear understanding of current student loan legislation', and that to include the SLC would have required a debtors meeting.
Well I fully expected them to do that.

If I was to take the complaint further, would I have a chance of success ? or am i just pushing my luck?

Thanks for reading

mwarby

As I understand it an IVA is binding on all creditors except those specifically excluded. The creditors meeting reffers to all known creditors,not all creditors

edit - just found 'All of your creditors are bound by an approved IVA, so it is important that you have accurate records of all your creditors’ names and addresses so that they can be contacted. If a creditor is missed out (an unknown creditor) they are still bound by the arrangement.' https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/454823/Alternatives-to-Bankruptcy.doc

Do you know what proportion of total debt was SLC ? if it is\was less than 25% there is an argument that they would have had a very limited say at the creditors meeting(they couldn't block it, without support from other creditors).

It does sound odd that it wasn't included from day one. Your IP should have clarified whether it could be included or not. In my case the loan was listed, but listed as excluded(post 1998 loan)

I would raise a complaint with the IVA company, that the SLC are trying to enforce the debt. Hopefully this will clarify the position between the IP and SLC. If the SLC are in the wrong I'd expect your IP to sort this. If your IP is in the wrong and they can't or won't sort it you may need to complain to thier regulator(https://www.gov.uk/complain-about-insolvency-practitioner)

mwarby

the 'IP complaint dept' is this a department of your IVA company, the SLC or one of the bodies in the link I provided ?

fermi

A quick Google suggests that this came into force in 2010

http://www.legislation.gov.uk/ukpga/2009/22/part/12/crossheading/student-loans

which assuming this is an old mortgage style one, as those are the only ones 'sold' so far.

258 Student loans under the 1990 Act: IVAs and bankruptcy

(1) Subsections (2) to (5) have effect in relation to the Education (Student Loans) Act 1990 (c. 6) to the extent that that Act continues in force by virtue of any savings made, in connection with its repeal by the Teaching and Higher Education Act 1998 (c. 30), by an order under section 46(4) of that Act.

(2) In Schedule 2 (loans for students), in paragraph 5(1) for “or 310” substitute “ , 310 or 310A ”.

(3 )In Schedule 2, after paragraph 5 insert—

“5A(1) This paragraph applies to a sum by way of public sector student loan or subsidised private sector student loan that a person (“the debtor”) receives or is entitled to receive before or after a voluntary arrangement under Part 8 of the Insolvency Act 1986 takes effect in respect of the debtor.

(2) The sum is to be ignored for the purposes of the voluntary arrangement.

5B(1) Part 8 of the Insolvency Act 1986 (individual voluntary arrangements) has effect in relation to a student loan debt with the following modifications.

(2) A student loan debt is to be treated as not included among the debtor's debts.

(3) A person to whom a student loan debt is owed is to be treated as not being one of the debtor's creditors.

(4) A “student loan debt” is a debt or liability to which a debtor is or may become subject in respect of a public sector student loan or subsidised private sector student loan.”

fermi

It has been public policy to exclude Student Loans from insolvency, including bankruptcy, DROs, IVAs etc.

There is no doubt that is now the case for any new IVAs, but I think here it is just a question of whether the changes for IVAs apply to this one which must have been started 5+ years ago and so must fall somewhere around the commencement of those changes for IVAs, assuming the above are the applicable ones?

dan_brum

Thanks both.
The IP (insolvency practitioner) complaint depth, is the IVA company.
I've had their final reply, which basically says #ugger off.

The student loan account started 1997, and is of the mortgagee style loan, which I found a document that states these types are valid for inclusion to an IVA. The total debt was less than 25%.

So I'm left wondering if ill get anywhere pursuing a complaint to the regulators.

As soon as I learned the S. Loan could and should have been included I contacted them, and after chasing they agreed and said they would include it.
The issue is they only processed the single one that had been sold on, and not the remaining. So when the completion certificate was issued the SLC was not listed and I am now being chased to begin repayments.
All dividends have been paid so its up to the IVA company to make payment from their own insurance for their mistake, which is why they've said no.

mwarby

If you told them about the student loan from day 1 and you are sure it should have been included, I'd complain to regulator that the IP was negligent.

Your IP is paid to deal with insolvency law and should have included it if they knew about it and it was legal to include it, it's not or you to know whats debts can and can't be included.

If you didn't tell them from day 1 that you had a student loan, then its less clear cut