Getting out of an IVA?

[Gingerheid]

Originally Posted by bill-k

1. There must be a lower limit, otherwise every penny I acquire goes to the creditors. I originally thought £1,000 was reasonable, but I have heard just £200 as the threshold. I would still like to know for sure. I am currently trying to chop my claims up into less-than-£200 chunks to get them below the radar, but it's a pain in the a$$ - and the big claims have to be left for now.

Your agreements might specify a limit - I've seen £250 and £500 in England. Failing that I think the limit is 1p, as modified upwards by what the IP thinks it's worth his time claiming. I think IPs usually get a 15% cut, so depending on the relative efficiencies of their offices and how much work they have, more than a few hundred seems about right. I doubt they'd want to recalculate distributions to a number of creditors for any less than £30.


Playing devils advocate, not trying to wind you up or anything, just giving you the arguments I'd expect you would receive...:

Originally Posted by bill-k

2. Could certain acquisitions be exempt by their nature ? Bank charges are money which we previously had earned and paid tax on, before it was "snaffled" unlawfully. If we subsequently have that returned to us, then it is not additional wealth, as in a "windfall" - it is simply restitution of our previous wealth by those who drove us to the Trust Deed in the first place. Had we not had this cash taken, then we would not have had to take out the TD, and both us and our creditors would have been better off. The villains here are the creditors, it seems, and that to my mind makes it a little less simple for them to claim our previous wealth. Veiled threats of damages claims seem a possibility here, to encourage them to be a little "magnanimous."

Playing devils advocate, money that has been earned and paid tax on is also the money that you would otherwise have used to pay your creditors. So in theory, there isn't a loss to you in this regard if the money you reclaim goes that direction, whether through a set off or via the PTD.

You've also recognised that these payments due to you do indeed represent previous wealth. Previous wealth is something I presume you declared on the PTD proposal, to the extent that you were aware of it. If you had been aware of these potentially lucrative rights of action you would have declared them, and they would have been taken into account by creditors in considering the proposal.

In addition, it is also previous wealth that would have been realised through lower debts, which is exactly the position today to which GreedyBank Plc have restored bill-k.

Originally Posted by bill-k

1. They took this money from me UNLAWFULLY - years ago, some of it - and they have kept it all this time.

So it can be claimed back. The directors of GreedyBank Plc have already done this (to the closed account).

Originally Posted by bill-k

2. In doing so, they played a big part in forcing me to take out the TD.

If you can prove this it would be interesting.

But my fear would be that you can't, you will only be able to show that your position would merely have been better shade of bad. Most people, even those that 'don't have debt problems' live their lives technically insolvent.

If the charges hadn't been made, would you be able to maintain the contractual repayments on your debt today?

Also, many of us are adept at minimising charges by juggling debts, and I usually see people that don't actually suffer that many charges on their credit cards until close to the 'end'. Bank accounts can be different as they are perhaps harder to manage.

I don't know whether the fact that it would probably be hard to identify an individual institution responsible would be a problem (unless you had a lot of different type of debt with the same institution.

I'm also not sure what you'd say the consequential loss as a result of the insolvency was.

My recommended route to go about looking to see if you can evidence that creditors were to blame would be to establish, for each month,

1 > Your income

2 > Your essential expenses (PTD proposal probably relates)
3 > Regular non essential expenses (ie extra DDs and SOs you had before but not now)
4 > The money you spent on top of this (ie all spending less 2 less 3)

5 > The payments under contractual loan obligations in that month, less interest on unlawful charges and the parts of minimum payments relating to accumulated unlawful charges
6 > The unlawful charges in that month, plus the interest on unlawful charges and the parts of minimum payments relating to accumulated unlawful charges

You would then have to look to see what patterns could be established.

You would be looking to show that taking 6 out the calculations, your financial position would have been viable, or that it would have become viable if you excluded 2 + 3.

In England you'd also be looking to show that you did everything possible to minimise the loss, so I'd be expecting to see signs of the efforts to make 3 + 4 fall a bit as 6 rises.

In addition to the above, to show that you would otherwise be able to repay your debts you'd want to work out what your debt repayment would be if the charges had been lawful, and that on your income and the level of expenses the PTD allows, you'd have been able to pay these.

There would be a lot of work in this, but you could do a few sample months and see if the picture was looking pretty.

Originally Posted by bill-k

3. The TD was taken out LAWFULLY, and with their agreement, whereas the penalty charges were NOT.

And... it lawfully snaffles windfalls, with your agreement. This was the proposal you made to creditors out of your own free will. You could have put to creditors a proposal that allowed you to keep windfalls, but you chose not to.

You may also propose to creditors an amendment to the PTD to allow you to keep windfalls, and they would be free to chose whether to accept or not.

Originally Posted by bill-k

4. I believe that I am entitled to legally claim money UNLAWFULLY taken from me, regardless of who took it.

You are. The directors of GreedyBank Plc are not trying to stop you. The question is who is entitled to what you reclaim.

Originally Posted by bill-k

5. I believe the banks are entitled to legally claim money LAWFULLY owed to them, which is their TD dividend.

Absolutely. A dividend which is based on the debt as reduced by any valid right of set of exercised, and which includes a fair distribution of any windfall pro rata to the claim in the insolvency.

Originally Posted by bill-k

6. I do NOT believe the banks have a right to keep the penalty charges they UNLAWFULLY took from me.

GreedyBank Plc are not trying to keep the money they took from you, allegedly unlawfully.

They are lawfully setting it off against the money you lawfully took from them

[bill-k]

Thanks for that link to Dolfos, Gizmo. One heck of a story (I've just flitted through the lot !!)

As well as the IVA discussion near the start, there was a single lonely post by Bong that caught my eye, which no-one appeared to respond to:-

http://www.consumeractiongroup.co.uk...st-322005.html

[Gingerheid]

dolfos - my thoughts are that imagine you didn't have an iva and you were reclaiming the money. would the bank be entitled in that instance to set it off against the business loan?

Definitely I'm afraid. Absolutely yes. As long as they are with the same company. Add the things is of course... they do have an IVA.

I wouldn't have thought so - but maybe that's just my way of thinking - surely banks can't start helping themselves to money in other accounts to repay themselves?

They might struggle to swipe your salary against your defaulted credit card arrears if you weren't in an insolvent arrangement purely in terms of loss of face, by the T's and C's for my current account do actually say they can!

now bring back the iva into the picture, I would say that the money doesn't fall into the iva pot - unless there are very specific provisions in the proposal/agreement for this.

Which there always are, unfortunately.

this was money that always belonged to you, that you didn't know you had a legal claim over until after the iva was set up, so it is not technically I believe a windfall - just my thoughts.

If it's not a windfall then it even more definitely falls into the IVA unfortunately. You were very aware that you had to declare assets you had. Not knowing about a right of action you had as at that date doesn't stop it falling into the arrangement. If you never knew your premium bonds had come up, the winnings would still fall into the agreement.

I think the reason that your ip hasn't been able to give you a clear answer is that the insolvency legislation doesn't (or didn't used to) provide for all the different things that can happen during the course of the iva, that all has to be taken care of in the drafting of the proposal. and if its not, and there is a grey area I think you may be able to get your supervisor to agree to let you keep the money.

I think the IPs answer was pretty spot on, if not perhaps possibly even generous in allowing it to be treated as only a windfall!

If the creditors didn't like the way the proposal was drafted they had their chance to get it changed before they voted on it. at the end of the day though I think you need your supervisors blessing to use the money but if you can get some free independent legal advice it might stand you in good stead.

But the proposal will have been drafted to claim it. I don't know about PTDs, but one thing I do know is that IVAs always are.

[7givenchy]

Hi Bill

Thanks for your input, I have had a read through your thread on Trust Deed. There is so much to consider, and we are certainly in a similar postition. I had thought about giving up as I thought it seemed that I was the only person in this position. Reading through the posts has made me feel like continuing the fight. Would it be all right to PM you

Regards!

[bill-k]

Kelly - sorry to hijack your thread while you get back to Gizmo with the answer to her question. I hope this is all of use to you !!!

Gingerheid - Thanks a million indeed for all your time and effort on this - it is much appreciated !!
There is no limit set in our TD docs., so if I want a set figure, I will have to try and get my IP to commit himself to one, I guess.
FWIW I was not aware of the previous wealth when I took out the TD, otherwise I might well have not taken it out and attempted to reclaim my money and avoid the TD.
Also, I was not aware that I had any choice with regard to altering the terms of my TD to enable me to keep windfalls. But I guess the fact there is that, had I tried to get my creditors to agree to that, then I would have found they objected and the TD would have not become protected.

I have to tell you, good sir, that I totally dislike just about everything you said back there !!! But then that is the thanks the Devil's Advocate gets, isn't it. However, I would much rather you told me all that stuff now (as you so kindly and painstakingly have done), than find some barrister with the smell of blood in his nostrils telling me the same in court.

So, of course, that doesn't make me a happy chappy, Gingerheid, but I sincerely do thank you for all you have said here.

I guess we are at the mercy of our IP's (and thus creditors), because we chose to throw ourselves there. Our only hope, therefore, if we wish to do anything other than what our TD says on the tin, seems to be to negotiate with our IP, and be very very nice to him/her.

Thanks again, matey !!

Bill.

[bill-k]

Originally Posted by 7givenchy

Hi Bill

Thanks for your input, I have had a read through your thread on Trust Deed. There is so much to consider, and we are certainly in a similar postition. I had thought about giving up as I thought it seemed that I was the only person in this position. Reading through the posts has made me feel like continuing the fight. Would it be all right to PM you

Regards!

A trouble shared...

Thanks for asking first, 7givenchy - please do.