IVA & student loans

[frazzled1234]

Hi All,

I am in the process of looking over my IVA proposal.

When I had my first meeting I was told my student loan would be included and now when i have my proposal it is being excluded.

I was told that student loans wont accept a proposal that is any less than 65p in the pound!

Has anyone else ever got a student loan accepted? Dont get me wrong an IVA would releive so much stress and worry without the loan being included but just wondered what had happened to everyone else in regards to student loans and IVA's

many thanks

[ianmillington]

This is a funny one as there are arguments both ways. Whilst the law clearly says that it's excluded from bankruptcy it's totally silent on IVAs. As the Student Loans Company votes in all cases, however, that would infer that they are bound by the IVA.

If your student loan is likely to have less than 25% of the vote then your it ought to be included and the amount you pay under the SL should be added to your contribution.

If, however, they have the power to block (my understanding is they want 90p in the £) then there are grounds to exclude them and for any deductions treated as an I&E expense. So long as the rationale is set out in the proposal, the major voting agencies don't have a problem with it, so long as the proposal otherwise makes sense.

Ian

[MelanieGiles]

Ian is correct at the 90p in the £ hurdle rate, and I completely concur with his interpretation which is how I deal with these debts in my own practice.

[flowerpot]

I've just had an IVA accepted and the student loan was excluded from the agreement. From what I understand, it depends on when you took out the student loan, if it was in recent years then the repayments are income contingent, you pay back a very low amount over a very long time according to the leve of your income.

I was given varied information along the way regarding my student loan and in the end I called the student loans company who advised that in my case (as it was a recent loan) that they would stand outside the agreement (opt to exclude themselves). If they were included in a proposal they always vote against and expect 90p/£1 dividend.

In the end I went with Cleardebt as they seemed to know what they were on about from the start.

hope this helps
flowerpot

[MelanieGiles]

That is not correct flowerpot - there is no difference in the treatment of Student Loans on their age - just a common belief in my industry that there is!