I have seen this type of question asked all over the internet, usually in respect of compensation, but these attempts have not asked the question fully.
I started an IVA several years ago owing about 150k and it was written down to about 112k. I now have about 35k outstanding on the IVA and 18 months or so remaining.
I have an Employment Tribunal hearing due before the IVA expires and there is a possibility that I will receive loss of earnings for a very short period of time (as I found another position immediately after resigning/ being constructively dismissed), but I may receive substantial compensation for detriments I received, stress and injury to feelings, and this amount may be greater than the 35k I owe on the IVA.
My question is this; where I to receive an Employment Tribunal award, would any compensation for detriments, stress and injury to feelings be classed as a windfall?
I have read my IVA contract and it is very vague. It just says that 'any windfall must be paid into the IVA'. In one sense one can interpret to mean that the money is paid to the creditors but in another sense an IVA is like a bank account for the purpose of settlements, so just because something is paid into this 'account' does not cause it to become property of any party, the rules of entitlement and allocation cause this.
The contract does not describe how a Windfall payment will be allocated i.e. against the agreed payments (written down), against the written down portion, or against the write down plus practitioner costs. It seems to me that in the absence of definition in the contract, the creditors would have a hard time arguing in court how this payment should be allocated.
I would like to get an opinion on these scenarios:
- If the award was less than the amount owing, how would the IVA Company try to allocate the award.
- If the award was more than the amount owing, how would the IVA Company try to allocate the award.
