Personal Injury Claim

[LongWay]

Hi all,

I am currently 2 years in to my IVA, before starting it I informed the IVA company that I was in an ongoing battle against my ex employer in regards to an arm injury that has left me unable to work in the field I specialise in. To cut a long story short last month I won and got a payout.

2 months ago, knowing the impending court case I asked how much was outstanding in my IVA, they told me 18530.

I was awarded £30,000 but the loss of earnings could not be agreed, so I was not awarded any. I cut my losses at £30k and agreed to settle!

May seem a lot but this has been ongoing for some years.

Anyhow I wrote to my IVA, offering them £13,000 as settlement for my IVA, both I thought was a good offer.

I am self employed so I will give you the breakdown. Of why I offered 13 before people say anything.

£13000 – Early Settlement to IVA
£1200 – Arears of housing rent
£550 – Arears of council tax (which is actually £743)
£2000 – Returned to Family
£4500 – Car
£8500 – Put in to business
£250 – Much needed celebration money to get my children Christmas presents and other general items.

They came back and said the only offer that would be accepted was for 18330. Basically full payment. They said by giving that amount I would have plenty left to pay off all other debts.

This would basically leave me with next to nothing to put in to my business, meaning going forward I would sunk.

I may well be debt free, but with a family to think about this is not very good!

I was also informed that money from my wedding (married this year) should of paid it to the creditors. This was the money giving to us as a gift for our honeymoon, which unfortunately got zapped up by bills. But was £1600

These people do not seem to live in the real world. I still have bills that need paying and a future to think off. My business now in it's first year is struggling because I have no capitol and trying to sell items I get third party (drop shipping) is not exactly high profit margins!

Fumming, I understand that yes I owe money, but they also have to understand that I entered the IVA trying to sort things out and that not only does today matter but also the future.

I thought a personal injury claim was not classed as a windfall, however I understand it is a nice amount. But read the above and your understand it quickly disappears.

Thanks

[LongWay]

Just found this on my paper work as I spoke to them about my claim, this is what is on the paperwork under "exceptional items"

"Due to Mr ***** RSI there is a possibility that he will receive a payout from his employers for personal injuries, if this is the case, they would be excluded from this arrangement."

[TheArtist]

Hi Longway, as mentioned elsewhere on this forum, if you have that stipulated, I'm sure your IP cannot renege on it.

[LongWay]

LP is me also, as I also phoned up for help and they posted the other topic on my behalf.

[MelanieGiles]

I don't think that your IP is saying that the money needs to come into the arrangement, as you perhaps suggested on your other post about this subject, but perhaps the level of your future contributions equates to more than £13k, hence the higher figure they have quoted you. Best to check on what basis they have come up with the figure quoted to be sure.

With regard to your wedding gift, this should not be claimable as a windfall.

[LongWay]

My payments are only £200 a month because we have lived on the breadline for many months. So even with 200 at 36 months (as we are two years in) is almost half of £13k. But I will try and speak with my IP, though frustrating as t is trying to even speak to my "Relationship Manager" is very hard, they never return my calls.

[LongWay]

Thanks Melanie,

I spoke to my IVA company today and I asked why did they want the sum of £18330, I was informed that this was 100% of my IVA and that based on my settlement figure this was what the IP was prepared to offer the creditors.

I then reminded them about the part that was written in to my proposal and they went away and checked. Came back saying "Yes I can see that now and will go back to the IP with your offer of 13k again based on this information"

Pretty upset that when I originally sent my offer that they obviously did not read or look in to my IVA paperwork, surely that should be a must when dealing with things like this?

I am close to making this an official complaint.

[MelanieGiles]

I wouldn't go that far just yet. You have clearly pointed out their mistake, and they are looking into this for you - but I would now reduce the offer to a sum equivalent to the level of payments you are still to make.

Glad that membership of the forum has enabled you to raise this with them with new found confidence. Sharing issues is a great way of finding out information and being confident to convey your point of view.

[LongWay]

Well here is an update.

I made the offer as you advised Melanie.

Since then it was only a couple of weeks ago that a statement had been made up to be signed by myself and sent to creditors.
But when I received the statement it was full of wrong facts and very negative. Basically there was no way the creditors would of accepted it. As it stated at the next review our money payment would be increased from £200 to around £800 due to our income and expenditure.

They stated the reason for this was because although they had my bank statements they had no proof that I had left my job and could be putting my wages in to another account without them knowing? As I had not given them the P45 as I had misplaced it.

I was a bit shocked by the statement. Mine and my wife's bank statements showed that we could not even afford the £200 a month let alone £800.
It also said in the statement I refused to give the information of what and where the award monies was being used. This again was not true, I simply said because it is excluded from my IVA I did not see why they needed to know. They never requested it.

The company also took weeks and weeks to repay information to me, I made a complaint about that and it was upheld.

Now after finding my P45 they amended the income and expenditure on the statement but sent me a second one still stating my refusal to explain where the funds where going, even after speaking to someone and explaining, I would tell them had they asked. I was also told that if I did not sign the statement in 30 days it would be refused.

Again annoyed I complained, and also stated that I made an offer in December and it is now April and my creditor meeting had not even been set up because of the incorrect statements.

So we have decided to make a full and formal complaint. We also told them that until this had been looked in to that our offer was on hold.

Now the company is investigating my payout and have approached my solicitor (who dealt with the claim) asking, when I started the claim, what was the claim for, what was the monies won for ect ect.

I gave the IVA company ALL the documents, yet they continue to ask for more documents that do not exist.

I am at my witts end, and now very worried they will find some legal loop hole.

I know it's long, but really I could just cry.

[LongWay]

I have now recieved a letter from the IVA company sent special delivery saying I must pay a full £17760 as the monies is classed as a winfall.

Can they really do this as it was written in my statement that monies from the injury would be excluded.???

Help please, we no longer have nearly 18000 pounds, this will bankrupt us?

[LongWay]

This is an email I received in regards to the letter sent

"Dear Mr P,

I have been looking into your case on behalf of your insolvency practitioner, and I have sent a letter by post to you which you will receive shortly. I have also attached the letter to this email.

I wanted to explain why we have had to investigate further the lump sum your received from your employer. As supervisor of your Individual Voluntary Arrangements we are duty bound to investigate all lump sums received by you and your partner in order to assess if any funds are required to be introduced into your arrangements. We must realise all available assets for your creditors subject to certain regulations and restrictions, and therefore if any lump sums are received by you we have to do a full investigation to determine what if anything is due into the arrangement.

We have been aware from the start of your arrangement that you were likely to receive a sum of money for a personal injury claim against your employer so when you initially informed us your claim had been successful and wanted to offer a lump sum in full and final settlement, we didn’t initially feel we needed to question this further. However once we started the variation process I noted that several elements of the claim differed from what we initially expected. Namely that the claim wasn’t successful in the manner that we originally anticipated and out of court settlement was reached which of course has no breakdown.

I also wanted to ensure you did initially understand the implication of receiving and lump sums of money, in particular in regards to your personal injury claim and I note this was discussed before the IVA was proposed.

Please find the letter attached which I have sent out with full details in, and please don’t hesitate to contact the office with any questions you may have."

[MelanieGiles]

So what are they actually now telling you to do? The letter seems to be justifying the actions they have taken, but does not seek to give you any further directions with regard to the claim monies. Which firm are you with?

[LongWay]

I am with Freeman Jones and already had one complaint upheld because of the time it took them to relay information to me.

They are now telling us they require us to pay in £17670 into the arrangement.

They stated on the letter that because it is an out of court settlement, in accordance to the terms of the arrangement this is deemed a windfall and payable to the arrangement, Because it is a lump sum of money, rather than a measured amount.

As above apparently this is not what they "expected"

Even though it quite clearly states in my IVA statement

"Due to Mr Prater's RSI there is a possibility that he will receive a payout from his employers for personal injuries, if this is the case, they would be excluded from the arrangement"

As far as I am concerned this is what this payout is. Defense strongly denied that the injury caused loss of earnings and my Solicitor explained this to Freeman Jones. And also passed them the papers from court.

I got this payment in November of 2012, 6 months later they investigate and demand more than half. Obviously we just do not have that now.

The monies was used to clear our rent, council tax, buy a car and start up my business.

A clear breakdown was sent to Freeman Jones.

Another email to me stated

"In regards to the calculation of funds due into the arrangement under Insolvency Regulations you are only entitled to keep funds received for pain and suffering, as there was no breakdown to your claim we cannot ascertain a figure for this amount, however we felt that using your claim figure of £10,000-11,000 would be a fair approach. In order to repay your creditors in full a payment of £17,670 would be required, which leaves you with the £11,000 plus further funds.

Regardless of the position of the funds at this time proposals are required to introduce £17,670 into your arrangement. If you wish to discuss these proposals and what form they may take please do call the office and speak to ****** in regards to this."

I never gave a claim figure, as anyone who has been down this route will know, no one ever knows how much you will get!

But I have had countless amounts of calls, at one point they had written up a statement for us to sign with an offer to the creditors for £7000. This has been a complete nightmare and they wanted to sign a statement that did not have the correct information.

Now they investigate 6 months on, surely that on it's own is a failing and should of been done immediately?

[Sarah Jolly]

Dear LongWay

I am sorry you are unhappy with information and advice we have given so far.

When a lump sum of money is received we asses each case on an individual basis, and we will take into consideration things like, your age and ability to continue working, the value of lump sum received, what the lump sum was received for and your original proposal.

We are duty bound to balance both yours and the creditors interests equally and we will ask for proof of any change in circumstances in support of any variation.

In an IVA you agree to pay what you can afford over a certain period of time. In return creditors often agree to write off a significant proportion of what you originally owed. In this instance, had you continued with your original proposal this would have been the case.

When agreeing to an IVA you also agree that if your circumstances improve then you may have to pay more back to your creditors than originally estimated and If circumstances improve significantly enough you may repay your creditors in full.

We have assessed all of the information available from both you and your solicitor and believe offering your creditors 100p£ and leaving you with a significant lump sum after doing this is fair to both you and your creditors.

The team have written to you via letter and email on several occasions addressing your concerns and you will receive a formal and final response to your complaint in writing.

We obviously would rather work with you to resolve this and reach a successful completion of your IVA.

If I can help please drop me an email to sarah.jolly@freemanjones.com.uk and let us know when it is convenient for us to contact you.

[MelanieGiles]

If in any doubt about how this matter should be treated, legal advice can be sought by both sides and a meeting of creditors called to provide the IP with directions. I am sure it won't need to come to this, but creditors may well have the final say on the matter - and then if there is still doubt the case could be referred to Court for an ultimate decision.