Friend is in an IVA which should lead to 100% payout with a bit left over. His home has now been sold and the proceeds are with his supervisor ready to distribute to his creditors.
However one creditor has suddenly upped their claim wiping out the potential surplus. About a year before entering the IVA a Tomlin Order was agreed for £18,000 against which £3,000 was paid. This arose from Personal Guarantees given to a bank for 2 companies.
Bank are now claiming the IVA makes the Tomlin Order void and are trying to claim a significantly higher amount (£28,000) in the IVA.
His supervisor hasn’t got a clue and he is so broke he can’t afford to get any legal advice.
Are bank correct, or does the Tomlin Order prove the debt amount?
""After conducting a thorough investigation into the above customer's account we have confirmed with our Litigation team that due to Mr XXX XXX entering into an IVA, the Tomlin Order would actually become void, as the terms were not adhered to so we cannot enforce the Tomlin Order, thus rendering the Tomlin order’s enforceable amount obsolete”
Surely this is just an administrative matter, not one that changes the previously agreed amount of the debt, witnessed by the court making the order.
It is by some twisted logic that the bank is concluding that they can "void" a court order, ignore previous negotiations and reintroduce figures which were disputed in the first place.
I would say the answer is in the Tomlin Order - if it stipulates that an IVA voids the deal then the Bank may well be correct.
Having said that do the Bank really want your friend to make a claim to the Ombudsman about this...?
It's not your friends problem to sort, Like it or not the Supervisor needs to make the decision when it comes to accepting creditor claims for dividend purposes so they need to get some legal advice if they're not prepared to make the decision themselves.
Perhaps the Supervisor will be prepared to reduce their fee by the same sum...?!
Did the IVA propose that statutory interest be applicable? Perhaps this can be waived?
Also does your friend have anything left? I.e at end of the day if the IVA hinges on this decision and Bankruptcy ensues will that be beneficial to anybody?
How much is the surplus due to your friend - they may well want to get their own legal advice to challenge the Supervisors decision - I can recommend specialist solicitors if needed.
Tomlin order silent on matter of IVA or anything else. Either party can apply to the Court to enforce the terms, no order as to costs, no provision for interest or anything else. Schedule to Tomlin Order point 1 says pay £18,000 at the rate of £300 per month, 2 says if in default claimant can enter judgment for £18,000 less amount received. That’s it nothing else.
Your point about the Supervisor’s obligation contradicts what my friend has been told. He has been told to get legal advice, but thanks for that point it makes perfect sense, I’ll pass it on.
I’ve not seen the IVA agreement so don’t know about interest in that.
Friend was hoping to come out of this with about £15,000, bank have upped their claim by similar amount which leaves him nothing.
Difficulty for friend was Solicitor wanted a £750 deposit to even talk to him, he can’t afford that.
I’m going to see him this evening, so will ask to see the IVA agreement.
Would any legal cost be recoverable from Bank if he won?
I can put him in touch with solicitors who won't charge that much up front to have a look at it.
DM me if interested.
It does sound on the face of it that the claim is £15k.
I suspect it might be the Supervisor your friend brings any claim about, not the Bank as it will be the Supervisor that determines the amount for dividend purposes.
Even the threat of this might sharpen the IP up a bit!
