Right to offset

[ivoriva]

Once a IVA has been agreed, can a bank still exercise a right to offset a debt that is included within the IVA?

[MelanieGiles]

If you are talking about a bank charges reclaim, then yes they can off-set. Bank's have a general right to off-set debts between accounts, which is derived from banking law.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[aguise]

Hi Melanie
My husband had a new card from tsb the other day. We assumed all accounts were closed it appears this one wasnt, although we have had no statements through until this card arrived . There is about £15 in their account we think, should this be given back. I have asked for it and said that we are in an iva and would appreciate it s return. I must say I am not bothered just curious as to whether they should keep or return it.

Thanks

Ang

[ivoriva]

Nope Im not talking about bank charges. I noticed the citigroup do a basic bank account that has a debit card, so I applied online and seem to have been accepted (depsite my IVA etc).
However, I have just found out they own egg and I have debts from egg that are covered in my IVA. So if I paid my wages into a citibank account, could they still take money from the account in payment towards the debts covered in the IVA?

[Adam Davies]

Hi
Once your IVA is accepted the bank can,t use money paid into one of their accounts to offset your debt,that would be preferential treatment to one creditor.
So your money will be safe.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[ivoriva]

Thanks Andy, thats all I needed to know.
I will keep people posted on whether I manage to open the account and what you get. The only problem I have encountered so far is they want me to send a £1 cheque from an account in my name to put into the new account as part of the idendity checks! Which maybe a little difficult, but Im sure they must have an alternative method so I will wait until I receive the paper work.

[MelanieGiles]

Ang - I would send the card back, as you rightly say you don't need it.

Ivor - it will be fine for you to take this account. Although both banks may have the same owner, this does not necessarily give the right to set-off, but do read the small print carefully just in case.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk