IVA with payplan a question please

[Spent2much]

Hello, its a while since I came on here , hope everyone are well .
My son and his wife entered into an IVA with Payplan, they have a nine year old son , they are due to receive the £500 tax credits from government , they said the IVA want this money as it is classed as a windfall .
Is this right ?
They could do with this money for their son .
Thanks

[The Tech Clerk]

If you receive a windfall whilst you're in an IVA, you are obliged to inform your IP.

Almost without exception, contribution based IVA proposals contains a standard 'windfall clause' which legally obliges you to pay any windfall into your IVA fund.

Your IVA obliges you to repay as much of your debt as possible, even in circumstances where you have benefited from an unexpected windfall payment.

Irrespective of the reason for the windfall, so long as it is during the IVA, your creditors will insist it is transfered to the IP for their benefit.:-



Might pay to give citizens advice as personally (only my thoughts) is that this is an emergency fund by the government fir those in need, IVAs should ignore due to pandemic and the cause of such payment? sure other will respond on here??

Diana Mayhew may know or have advice?

Another avenue is complain to MP that what was meant to be a social help/need by government is being denied by creditors who will make out government handouts?? just a thought!

[The Tech Clerk]

Note:- Have sent a question on this subject to the cabinet office for response? hope they respond positively!?

[Gerry Jemitus]

This is a quote from the government website regarding the £500 tax credit payments:

The payment is non-taxable and will not affect your benefits. You do not need to declare it as income for Self Assessment tax returns or for tax credit claims and renewals.

This is somewhat different to the normal understanding of a windfall, although it is an unusual situation and so falls into a bit of a grey area. It would certainly be very harsh of an I.P to insist on taking the payment under these circumstances. This is a drawback with IVA's. There are cases where in the last year of an IVA, the IP have forced the sale or refinancing of the family home at sub prime interest rate level to release equity to be paid into the IVA.

[Warwick65]

How long has your son been in the IVA?

Debt Camel provides some great advice on IVA's and also on making affordability complaints

https://debtcamel.co.uk

Not saying I agree with all her ideas on managing debt but she does provide some good 'top level' advice on things like IVA, BR and DRO's as well as claiming unaffordability on loans, credit cards and similar. Of course reclaiming has to be thought about as it seems to me to be hard to reclaim without acknowledging the debt so not good if you are chasing SB

[Spent2much]

How long has your son been in the IVA?

Debt Camel provides some great advice on IVA's and also on making affordability complaints

https://debtcamel.co.uk

Not saying I agree with all her ideas on managing debt but she does provide some good 'top level' advice on things like IVA, BR and DRO's as well as claiming unaffordability on loans, credit cards and similar. Of course reclaiming has to be thought about as it seems to me to be hard to reclaim without acknowledging the debt so not good if you are chasing SB

three years into the IVA another three to go . I shall pass that website on to him , thank you

[Timewilltell]

Can I ask how did they find out about this payment?

[Spent2much]

This is a quote from the government website regarding the £500 tax credit payments:

The payment is non-taxable and will not affect your benefits. You do not need to declare it as income for Self Assessment tax returns or for tax credit claims and renewals.

This is somewhat different to the normal understanding of a windfall, although it is an unusual situation and so falls into a bit of a grey area. It would certainly be very harsh of an I.P to insist on taking the payment under these circumstances. This is a drawback with IVA's. There are cases where in the last year of an IVA, the IP have forced the sale or refinancing of the family home at sub prime interest rate level to release equity to be paid into the IVA.

Payplan are taking it all for the IVA, they're gutted

[Spent2much]

Can I ask how did they find out about this payment?

They got a letter saying they qualify as they get child tax credits .

[Timewilltell]

They got a letter saying they qualify as they get child tax credits .

Sorry I meant the IVA people?

[Spent2much]

Sorry I meant the IVA people?

payplan see their bank statements .

[Timewilltell]

Really, is that allowed? I don’t think I’d want to be dictated too and have my personal space invaded like that. That’s surely got to be morally wrong.
I am speechless.

[Spent2much]

Really, is that allowed? I don’t think I’d want to be dictated too and have my personal space invaded like that. That’s surely got to be morally wrong.
I am speechless.

I know I agree, we left payplan for this reason as they wanted to see our business books and the bank account statements , so we gave up the dmp . We didn't like that at all .

[Timewilltell]

Is it even legal?

[PlanB]

three years into the IVA another three to go .

Have they ever sent CCA Requests to see if any of these debts are unenforceable?

I'm definitely not suggesting they should cancel the IVA because if it 'fails' all the interest which has been stopped could come whooshing back, and the IVA provider could take their fees out of what has been paid so far etc.

However, it might be useful for them to do some background research to see if the IVA may have been mis-sold. I'm not raising any expectations but read this in the Sun newspaper to get a better understanding > https://www.thesun.co.uk/money/7363258/iva-debt-refund/

Was the IVA the only debt solution option recommended to them?

Di