Claiming money (tenancy deposit back) from someone into IVA / court fine

PrettyKittyKat

Any pre IVA debts are bound by the terms of the agreement, whether they are listed on the IVA proposal/chairman's report or not. A creditor would need to contact the IVA companny and follow thier procedure to be added as an additional debt (usually completing a proof of debt form). The debtor has to agree that it can be added. It is possible (although rare) for a 'person' to be a creditor on an IVA. The sticking point may be if the debtor does not agree that they owe you the money. If you are added then you will be a proportional return of the money, which depends on the p in the £ agreed for the IVA, and be expected to write the rest off. Payments would likely be sporadic, especially with a low debt as yours (£800). Any pre IVA debts not claimed as part of the IVA by the time it concludes and a set time limit passes would get no payment and be expected to write the debt off also. So waiting around isn't going to help you.

This is my understanding of the return of deposit debt anyway.

I am not sure where you would stand in terms of suing him. As if you are successful in this then presumably this would only be due when awarded and therefore is post IVA anyway.

In all honesty... it's probably not worth your time and effort.

dan201

So even if I'm legally bound by the terms of the IVA because the debt he owes me is pre-IVA, if he gets a court order to pay me this would be after the IVA, hence not bound by the terms. Is that right?

I must stress that I intend to sue him both in small claims for my deposit back, and in high court to claim 3 times the deposit amount for non-protection of my deposit.

And once again (nobody answered this), should I just wait and see the end of the IVA to claim the money, then he will have nothing to protect him from not paying it?

PrettyKittyKat

Sorry I don't know the specifics answers this. It is a very specific circumstance. I would recommend seeking advice from someone specialising in personal insolvency.

dan201

No worries, maybe someone else here knows but I should probably better seek professional advice, since my case is so specific.

dan201

Hey there, so I have been trying to get in touch with the IP of that person, but I only could talk to the receptionist who would not let me talk to the IP or give me any details about the IVA arrangement as I am not registered as a creditor.
I must admit I was unpleasantly surprised. Is this a common practice?
I feel like my best move now is to talk to him to get details about the arrangement, and if I have the permission to sue that person to court outside of the IVA or not, some things that only the IP would know it seems. But if I can't get in touch with him then I truly am in a dead end...
What do you think I should do?

mwarby

For the most part there is only 3-6 months from the start of an IVA for a creditor to lodge their  claim. I suspect that a court order would make no odds as the order relates to a pre IVA debt, if it would work many lenders would not cooperate then sue attempt to recover full amount.

i suggest you write to the insolvency practitioner explaining the situation. Try to provide all the info in this form with as much proof as you can https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/667296/14.4-Proof_of_debt_-_General_Form_-_Requirements_for_Proof.13.12.17.pdf. Note even if accepted your not likely to get much more than 20p in £ (20%) of debt

The landlord should of course have used a deposit protection scheme to either hold the deposit or insure against this

dan201

Hey guys, thanks again for all your help.
I have had a pretty significant development: I have emailed the IP who answered me this morning.

So he told me that if I get added as a creditor, as per the agreement I shall receive 13.7p/£, which amount to £110 over 5 years (if I claim £800).
But he also told me that should I get a court judgment for a greater amount (for example £3,200 would be the maximum amount should I be awarded £800 from my deposit back + £2,400 which would be 3 times the amount of my compensation for non-protection of my deposit), I can claim it in the IVA which would make it £438 at best.
Of course I am aware that getting such a judgment would incur additional costs, but is it still worth it to retrieve a greater portion of what I am owed? Or would it end up costing me more than what I will receive? 13,7% is indeed quite a small portion...

mwarby

It looks like going by small claims route you can’t claim more than the deposit. You may struggle to find someone willing to take it on no win no fee (because the defendant would be unable to pay the legal fees)

Its possible the financial issues would be used in mitigation, suppose you only got 2x the deposit, that’s £100 over 5 years

only you can make the risk reward call, but personally I’d leave it

dan201

Yes I guess it's my only option left now...

One very last thing (yes I'm very stubborn I know!), what do you think of the possibility to wait for the end of the IVA (so around mi-2024), then proceed to court as if there was no IVA at all? Because if I get into the IVA as a creditor I guess I won't be able to take any legal action after that.
I think I would honestly prefer to wait 4+ years and get up to £3,200, than to get just above £100 by the end of the IVA.

mwarby

The debt is covered by the IVA wether you know or agree to it, the debt will be written off at end of IVA whether or not you claim. The fact you’ve contacted the IP wouldn’t help either

Sorry this sucks for you, but for those who are insolvent can you imagine going through bankruptcy or an IVA (both of which involve intense financial scrutiny, worry, and stay with you credit history wise for life) only to be dragged back to court for an old debt ?