Iva and injury claim settlement

amy2390

Hi there

I hope someone is able to help, or has been in a similar situation. I am very anxious while awaiting an outcome from my IP.

Basically I will be receiving a personal injury settlement for 11k, I started an IVA last year and have an outstanding amount of 6k to pay, already have spoken to someone at my IVA company they said they will be entitled to 'my lose of earnings' which is nearly 2k.

I want to clear of my IVA and will be hoping to make a settlement of around 4-5k (hopefully), but having read over forums their iVA companies have taken the whole of their settlement.

Would they be able to do this as I only owe from to date 6k - over 48months of repayments? Surely if I only owe 6k they can't take a whole 11k?

TIA :-)

sourcrates

Hi,

You should of kept quiet for the time being about it, and waited until you actually had the money, at that point you could of offered a full and final settlement to your creditors.

You can still do this, but you've already shown them your cards so to speak, there are fees involved with IVA`s which can amount to a fair few thousand pounds, so you may, potentially lose the lot.

Its going to be at your IP`s discretion now.

National_Debtline

Hi amy2390

Welcome to MSE. You need to bear in mind, if you have a windfall that your insolvency practitioner (IP) can claim they are not just looking at what they would have recovered had the IVA run its course. They can look at your total level of debt plus their outstanding fees. However they have already told you they will only be claiming the part of the settlement that relates to your loss of earnings.

They can put a proposal to your creditors to ask them if they are willing to settle the IVA with £2000, but it’s at your creditor’s discretion whether to agree. The IVA is legally binding so you are tied to the agreed terms and conditions unless your creditors agree to a new offer. You may need to consider whether you would rather settle the IVA by making a higher offer (using more of your pay out), or continue with the IVA through monthly payments. Good luck with it all.

Susie
@natdebtline

amy2390

My IVA company are going forward with around £6k as a full and final settlement offer with a outstanding banlance of £6k to left in the IVA.. how long do creditors have to respond? Do you think they will settle? (fingers crossed)

amy2390

It wouldn't have really worked well when they want to know where the money would have came from and you have to provide proof if a friend/family member is providing the funds for you and to how and where they have the funds from! I could have caused myself double the trouble and this would have also caused breach to my IVA! I would recommend complete honesty!

DorisTrousers

Any money received for "pain and suffering" is exempt from the IVA and cannot be claimed by the I.P. Conversely, any money for loss of earnings is an asset of the IVA and must be paid in (if it is over £500). For anyone in the future with this type of situation, it is always an option, should you choose to do so, to offer an amount as a full and final, but you cannot be forced to do so, nor forced to hand over the "pain and suffering" part of the award.

Can't agree with anyone who would say keep quiet, an IVA is, as mentioned previously, legally binding on all parties and should be treated as such.