Receiving incorrect information from my IVA company

JamesMckk

I started an IVA in October 2020. 
Unfortunately, I became unemployed in late 2021 and decided to take this employer to an employment tribunal. 
In October 2022, I reached a settlement agreement with that employer before the date of the tribunal hearing. 
I immediately informed my IVA company and disclosed full details. I was told this would be treated as a redundancy and I would be allowed to keep a small amount (around 7% of the settlement amount). I disputed this as it was not a redundancy.
They then called this a windfall.
I questioned this with the IVA company for clarity.
They then called this compensation and stated the following:

"Compensation is caught under the ‘after-acquired assets’ clause of the standard terms and conditions. The concept that general damages (for example, pain and suffering) are not considered assets whereas special damages (for example loss of earnings) are considered assets"

I had 5 claims to my tribunal case, 4 were general damages and 1 would have been special damages. As this was settled out of the court, my claims were not settled individually so there would be no way of seeing how much that 1 special damages claim would have received compensation from the courts. I questioned the IVA as to how we could work out the compensation for that 1 claim.

I wasn't being unreasonable, they could have the money but I wanted to know what part of my IVA policy this followed. It felt like they couldn't place this settlement agreement amount under any reason it must go into my IVA. There is no mention of settlement agreements or such in my policy.

I then received an email stating:

"They will need to call a meeting of creditors to explain that you have received compensation but cannot tell us how much due to a confidentiality agreement and is refusing to pay any of the funds into the IVA. Creditors are therefore asked to decide if the IVA should continue".

I contested this and said I do not wish for this meeting to go ahead with this incorrect information which could cause the IVA to fail and potentially petition for me to become bankrupt. I have disclosed all information and I have never refused to pay these funds into the IVA, but they have not been able to tell me what part of the policy they are following. 

This has been ongoing for nearly a year now and I'm getting no direct answers to my questions

I've asked them if any of these issues would cause the IVA to fail and if not, I would need that in writing. 

I have now been told this is being dealt with by management and I will hear back from them soon. 

I have since received a tax rebate and informed the IVA immediately.  They are fully entitled to this but I have asked about the failure of the IVA due to the other issue as that has been left unresolved.  If they have already failed the IVA and are unwilling to tell me then why should I give them any of the tax rebate money?

I've been chasing this with the IVA company for nearly a year and it's going nowhere and I keep being told it's with a manager. I've attempted to get some insolvency legal advice but the assessment alone would cost £750.

Any advice on what I should do or where I can go from here?

sourcrates

How much debt did you have prior to entering the IVA ?

One option is to let it fail, you won`t be made bankrupt, after a while, collection activity will start again, settle each debt with a full and final offer, or make monthly payments, depends how big your debts are.

Keep your windfall.

fatbelly

Only just noticed this. The problem lies with how poorly regulated IVAs are, so when there is an unusual situation like this, there is no independent body who can rule.

My inclination is the same as sourcrates - see if you can just get a termination, and do settlement offers to whoever comes out of the woodwork.

The slight danger is of a statutory demand either from the ip or a creditor. If you are a homeowner with equity (and if not, why did you do an IVA?) then that could be a real threat

JamesMckk

I received their final response to my complaint. A letter from the supervisor that mentions "In accordance with the terms of your IVA any windfall or lump sum you receive " and referred me to a couple of paragraphs in my policy.  My policy states "windfall or inheritance" not lump sum! 

The money I received was not a windfall, they define windfall as unexpected and lottery win, but this was neither. It's definitely not inheritance.  It is a lump sum but no part of my policy states that a lump sum should be included. It's absurd they have misquoted my policy and then used that misquote to conclude their investigation

I'm going to take this to the financial ombudsman as I'm just going around in circles with the IVA company.

fatbelly

The FOS cannot consider complaints about IVAs. It's what i mentioned earlier about how poorly regulated these things are.

In theory you can refer their final response to the IS complaints gateway

https://www.gov.uk/government/publications/insolvency-practitioners-guidance-for-those-who-want-to-complain/insolvency-practitioners-guidance-on-how-to-complain-about-an-insolvency-practitioner

JamesMckk

Sorry, I did see that you mentioned it.  I chose to ignore it at that time as it wasn't something I wanted to hear (I know, dumb, but at least I am being totally honest about this) but your comment was nagging at the back of my mind as I was trying to look a bit more into this.  
So the financial ombudsman wouldn't be able to help at all?

What is the point of the IVA company providing me with links to the FOS.

Would the Insolvency Services replace the FOS?
Would they help at all?

sourcrates

JamesMckk said:

Sorry, I did see that you mentioned it.  I chose to ignore it at that time as it wasn't something I wanted to hear (I know, dumb, but at least I am being totally honest about this) but your comment was nagging at the back of my mind as I was trying to look a bit more into this.  
So the financial ombudsman wouldn't be able to help at all?

What is the point of the IVA company providing me with links to the FOS.

Would the Insolvency Services replace the FOS?
Would they help at all?

The insolvency service is an executive Government agency, it can only deal with complaints about the service you receive from that particular department.

It cannot consider complaints about private sector Insolvency practitioners.

Fatbelly provided you with the link to the IS complaints gateway above.