I have started to apply for an IVA and have been going through Swift Financial Services. On doing an income and expenditure with them I told them about all income I recieve as a full time lone parent student. They told me at first that only the Grants I recieve being: Lone parents learning allowance and special support grant. Would be used in the income and expenditure allong with: tax credits, maintenace, Child bennefit and any help I receive towards my rent while at university.
I did tell them about the maintenance loan I also recieve, but they said that the loan should not be included as this is a loan for my course and the costs related to being on it...words to that effect.
It worked out that from the income and expenditure they took me through, not including my student loan as income, or expenses for my course i.e hardware, software, books and materials etc. On sending them all evidence required in documentation i.e. proof of income including my student finance england entitlement letter, they began asking questions about my loan and grants and how often I recieve them etc. I explained that I receive the grant and loan together at the start of each term and that this has to last me for a total of 10 months before I recieve any other type of income. They then said oh we need to speek to the IP to see what we can use as income... They seem to have changed there tune now that they have seen there is money involved in my student loan that could bump up their fees to however they charge. The IP is Harrington Brooks who will manage the IVA.
My question is: Is it correct that an IP can not include any student loans as income towards an IVA? I know that student loans do not count as income re: payments under bankruptcy... is this also the case in an IVA ?
factual advice would be greatly appreciated please.
My understanding is that all income would be disclosed but any expenditure in relation to the course would be listed in expenses to offset all/part of this.
Thanks for replying. This does still however seem very vague to me.
I checked Harrington Brooks out and they do not appear on the Insolvency Practioners Directory held by the Insolvency Service accessable on the dirct gov website. Cn they then act outside of government guidlines?
I have been informed that under government guidelines under section 57.3a Student Loans in relation to an IVA of IVA July 1997. 2010 ammendment that:
"Any sum payable to an eligible student will not be treated as part of any IVA. Also any debt or liability in respect of a student loan will not be included in the student's IVA when:
- The student was entitled to recieve the sum wich the debt related after the approval of the IVA for IVAs approved before 6 April 2010.
- The IVA was approved on or after 6 April 2010. "
As Swift Financial Solutions and Harrington Brooks are not listed to signing up to the list held by the Insolvency Service, can they then act outside these guidelines?
My second point here is that they want to charge up front fees. I am not happy with this since talking to Step-Change IVA team and as I am confident that Step-Change and any IP they would refur my case to would be listed on the IP service directory and be bound to act under its guidlines.
I have signed an Authority to Act and paid a nominal fee to Swift Financial Solutions and emailed them docs regarding income and expenditure etc... I have not paid the full fee and have not yet signed an actual IVA agreement if I am correct in thinking. They said that there would be a cooling off period once I had signed the Authority to Act. This was signed Monday. I have read through the Authority to act information emailed to me, but there is no mention of the cooling off period. It has now, so far, been 4-5 working days since I signed. Can I change my mind and go with an IP who will act within above mentioned guidelines and use a service which will not charge upfront fees?
My interpretation is the guidelines are meant to exclude the Student Loan from being written off as part of the total debt owed to creditors at the time of applying for the IVA (resulting in the Student Loan being written off with other debts after 5 years) and not necessarily meant to be excluded from the debtors' income in the annual Income and Expenditure for the purpose of contributions. The issues might be treated seperately.
Last edited by hwima on Sun Aug 25, 2013 2:41 am, edited 1 time in total.
*IVA started Sept 2010
*Last Payment Taken August 2015
*Completion Certificate Issued November 2015
The debt cannot be written off in bankruptcy or IVA but it is an income. I do agree with Andy that the income will be used for expenses so effectively excluded in the same fashion as DLA. Perhaps get a second opinion from a different firm particularly one that does not charge for advice. Most IP firm give free advice so see what you would be expected to pay elsewhere before you commit and especially before you pay any more money unnecessarily.
I agree with Michael, your student income should be included as income and off set against your educational expenditure so will not count towards you disposable income.
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I am one of the IPs at Harrington Brooks IVA, which is a trading style of One Advice Limited and part of the wider Harrington Brooks group. I can be found on the register of Insolvency Practitioners maintained by the Insolvency Service under my personal name or the actual company name of One Advice Limited.
Andy, Michael and Kelly are all correct when they say that all income must be disclosed but student loan or grant income will be offset by the corresponding expenses, so that none of that income is counted towards disposable income available for the IVA. Furthermore, as Michael has also said, a student loan is not a debt that can be included within the IVA.
I hope this helps to reassure you and I will be speaking to Swift to ensure that they also fully understand this.
Hi Mark - the area of student loans can be confusing but hopefully the input you have had from the other experts has cleared things up for you.
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