Personal Injury Claim

[sonny100]

Hi there,

My wife and I are just in the process of applying for an IVA, and expect this to start in the next month or so.

I was involved in a car accident in June last year, and should be receiving my personal injury compensation in the next few months, this should be around £3000.

This will hopefully cover some medical treatment that I need, as well as pay back my brother who lent me some money to buy a new car after the accident.

Will I have to give 50% of this payout to the IVA?

[kallis3]

Have you mentioned this to your prospective IP? I'm not sure what happens with claims like this.

One of the professional experts will be able to advise you about it.

[MelanieGiles]

Make sure that your IP specifically excludes the amount that you need to pay for the medical treatment. I am afraid that you will be unable to repay your brother, as that would be preferring him over your other creditors. The remainder of the money will be deemed to be a windfall, and you will need to check the terms of the IVA to see how this is dealt with. If it is proposed under the terms of the IVA protocol, you will be allowed to retain the first £500.

[David Mond]

Well if you are not in an IVA yet and you do pay back your brother it is strictly not a windfall BUT in your proposal it should be stated that you had an accident and your brother who lent you money to pay for medical expenses and new car was re-paid - I don' think you will have too much of a problem - yes you are preferring your brother but you have not yet gone into your IVA and as long as it is mentioned I don't think creditors would be duly unhappy as to why you did this. It certainly would be different if you were already in an IVA.

[Skippy]

I thought that once you were aware you were insolvent that any payments should be pro rata as otherwise you were preferring one creditor over another?

[kallis3]

I thought that as well Skippy.

[MelanieGiles]

Correct ladies - and as the debt is due to the poster at this point in time it is already an asset, which if dissipated in an inappropriate manner gives rise to further investigation.

I have seen the OR's office pursue preferences of as low as £1,000 from family members in the past.

I suspect that the point David was making was that so long as the transaction is fully disclosed to creditors, they can vote accordingly. Am sure he will be back on line later on to put his own mark on this.