ineligible for an iva apparently

[kirsty1]

hi - yes i know about the student loan and having to repay above a certain level of income. thats part of my problem! i took a new job last year that actually left me slightly worse off every moth, due to a huge increase in my petrol costs. it also took me slightly over the student loan limit. in all it totalled about £180 a month less in income. i'm ok with paying over 7 years. i'm hoping to up my payments with every pay rise, any any bonus or extra monies I receive will also go into it.

[Adam Davies]

Hi kirsty
I think that a DMP is the right way forward for you at the moment.Your salary will probably continue to rise,year on year,and hopefully one day soon you may be in a position to mangage your debts reasonably comfortably or indeed pay them off in full
Regards

[richardparkin]

It looks as though a DMP is the best way to go. Good luck, I hope everything works out for you.

One point of general interest relating to this topic – any attempt to include a student loan in an IVA should fail because of the special position of a creditor whose claim survives the discharge of a bankruptcy order. There is legal authority that failure to recognise this is unfair prejudice.

[ianmillington]

Sorry to disagree on this point Richard but the legislation is silent on IVAs - so there is the opportunity to deal with the debt in an IVA.

At one point the Student Loan was discharged by Bankruptcy. What happened however was that a significant number of newly-qualified students filed immediately after graduation and did lowly -grade work for a year. The position then reverted (July 2004 I think) to its current position. The situation now is a relatively fair one whereby the Student Loans Company (SLC) acknowledges that it is bound by voting in the arrangements but where it calls the shots will drive a very hard bargain. My belief is that if the SLC considered itself not to be bound it would not vote and simply circumvent the IVA.

In this case I agree Kirstys only real option at the moment is a DMP

Ian

[MelanieGiles]

I shall continue to disagree that point, and have plenty of cases with student loan debts in them by way of demonstration - even where the student loans company have repaid monies to the IVA which were taken from peoples salaries post IVA.

Please send me the authority on which you feel that I am acting inappropriately, Richard.

[ianmillington]

Here's the current DTI take on the issue:

http://www.insolvency.gov.uk/
insolvencyprofessionandlegislation/dearip/
dearipmill/chapter17.htm#32.

You'll note that it merely says the debt is "not provable in Bankruptcy", which IMHO is not a requirement for admission in an IVA.

[MelanieGiles]

Ian - I'm assuming you agree with me? I have had many discussions with the Student Loans company over the last couple of years on this point, and they agree with me as well!

And perhaps another topical discussion for this evening. I shall look forward to meeting you later!

[ianmillington]

Yes I do![:)]

[MelanieGiles]

Thanks - and look forward to meeting up with you in Manchester later on.

[richardparkin]

Hi Melanie and Ian,

This is such a confusing topic, in my opinion because the legislation is silent! We also have a small number of IVA’s running where student loans are included. This though does not mean that it is necessarily 100% correct, only that no challenge based on unfair prejudice has ever been made.

It seems to make sense that if, in a bankruptcy the student loan remains payable, why, in an IVA, would they be expected to receive only a dividend payment? Based on your experiences Ian, it would appear that Student Loans Company do not realise that their position maybe made stronger by such a challenge. Melanie, I am certainly not saying that you are acting inappropriately, we are doing the same! I am surprised just how vague the legislation on student loans is in relation to IVA’s when in 2004 they specifically addressed it in relation to bankruptcy.

A concern of mine is exactly what the SLC will do when a certificate of satisfaction is issued. Arrangements of this type that we have are still ongoing. Have you guys had any that have completed and have you experienced any problems with SLC wanting to pursue for a balance? I would be most interested in this.

Thanks very much,

[MelanieGiles]

Richard

I have replied to your e-mail directly, but would suggest that as the Student Loans company have agreed to be bound by the terms of the arrangement, but submitting acceptance votes or failing to lodge a challenge within the 28 day period, that they are rightfully bound.

Furthermore, I have had cases conclude satisfactorily without challenge, have spoken to the Student Loans company who confirm that they do not believe their debt survives the IVA, and have actually been paid back money they have taken from clients salaries post-IVA in error.

Can I suggest that you give them a call directly to satisfy your curiosity.

[ianmillington]

I feel that notwithstanding the position under bankruptcy the SLC have elected to participate in the Statutory IVA scheme and by voting (on some occasions presumably preventing IVAs being approved at all)they have agreed to be bound by the outcome. If the SLC were to be outside the IVA, they would not vote at all and, indeed, would not be permitted to vote.

Having taken that stance I believe the SLC will now be estopped from acting differently from case to case, unless and until there is legislation specifically removing the SLC from the IVA process.

Same thing applies, I believe, to matrimonial proceedings. An ex-spouses claim for maintenance arrears can be included in an IVA. If the ex-spouse wishes to participate in the IVA and receive a dividend instead of remaining outside it, and other creditors don't object, there is nothing to stop that happening either.

Ian