Could you tell me what happens when an IP breaches an agreement?
My proposal states that the IP should inform 1 week before the IVA is due to finish that he intends to extend it. My finish date was months ago but he is saying it is still open, despite the fact that he hasn't notified me.
I was hoping to have a chat here before approaching the IP. If any of the experts could comment, that would be great.
My belief is that it's a full and final but it doesn't use that term in the IVA. It just says that I intend to make a one off payment, not sure if thats the same thing.
A "one-off" payment based IVA is often referred to as a full and final. But running an arrangement for just two months is a brave decision on the part of your IP - as it does not give much time for claims to be agreed and paid.
Aha - I remember your case now. It is unworkable to put forward a 2 month proposal knowing there is a HMRC claim to agree. There is no way to buck this system I am afraid, and for self-employed persons it makes the idea of a quick settlement almost impossible.
It depends upon the terms of your IVA - I find it unusual that he would need to give you notice, but it depends upon the terms written into the proposal. If it says he should do, and he hasn't, that is a breach on his part - but what motivation is there to make an issue of this? The IPs hands are tied up with HMRC rulings, and a complaint is not likely to achieve anything.
My proposal refers back to the standard conditions produced by the IVA forum (not sure if you know them). para 5(1) states that any extension notice must be sent 7 days before the end of the IVA.
The reason this is a pain is because there are clauses that cover windfalls and earnings while the IVA is open. I haven't had either so far but I might between now and next April. The whole point of the full and final was that I would be free to move on once the payment was made, now I find myself almost as stressed as I was before the IVA.
Last edited by Andy101 on Wed Oct 28, 2009 9:19 pm, edited 1 time in total.
This should have been discussed with you prior to the IVA commencing, as every good IP will know that the HMRC claim will take time to agree. If the IVA is deemed to have failed, because proper notice has not been given - you will be back to square one and the IP cannot close the IVA with an unagreed claim.
This is unfortunate, but the way I would look at it is that if you do get a windfall in th meantime, your creditors will end up getting paid more - which I am sure was the intention when you borrowed the money in the first place.
Make sure you submit that 09/10 tax return as soon as you can, but don't be suprised if it doesn't take another few months for the claim to be agreed.
This should have been discussed with you prior to the IVA commencing, as every good IP will know that the HMRC claim will take time to agree. If the IVA is deemed to have failed, because proper notice has not been given - you will be back to square one and the IP cannot close the IVA with an unagreed claim.
This is unfortunate, but the way I would look at it is that if you do get a windfall in th meantime, your creditors will end up getting paid more - which I am sure was the intention when you borrowed the money in the first place.
Make sure you submit that 09/10 tax return as soon as you can, but don't be suprised if it doesn't take another few months for the claim to be agreed.
When you say back to square one, does that mean the money I've put into the IVA comes back to me (for putting into a different IVA) or does the IP keep some or all of it?
The money will be held in trust for the IVA creditors - to be distributed on a pari-passu basis once all claims have been agreed. And the IP will deduct his fees as well from those monies.
You do raise a very interesting point here Andy, and I am going to discuss it further with colleagues tomorrow as it is something for all IPs to be very mindful of when deadlines for closure are looming. I suspect we have all been guilty of falling foul if this one occasionally.
