Can my IP do this?

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shully

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Post by shully » Thu Feb 07, 2019 6:48 am
I entered into an IVA in December 2017. One of the creditors immediately disputed and filed a 262 in court. After 14 months this was eventually settled before the court hearing and part of the settlement was an agreed amount to be paid by the creditor to the IP for his legal costs. I have now transferred a lump sum to the IP for paying of the iVA as agreed. However, the IP has now decided to reduce that lump sum and use it to pay the rest of his legal costs. This means that my creditors will be getting less. Is this allowed? Especially as there is a Tomlin order signed by the IP agreeing on money received towards costs? Thanks

Foggy

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Post by Foggy » Thu Feb 07, 2019 7:50 am
It will depend on the actual agreement the IP has with creditors regarding fees and costs ... in most cases these override payments to creditors and are deducted first, before anything is paid out in dividends. This would mean that, going forward, any monies received from this creditor under the Order will need to be distributed to the other creditors, as the costs have already been covered.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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shully

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Post by shully » Thu Feb 07, 2019 8:12 am
Hi. Thanks for the reply. I think maybe I haven't explained myself well enough. I know that in normal circumstances the IP, once in receipt of monies in the IVA, can take his legal fess for administering the IVA before paying the creditors. But in my situation, he signed a Tomlin order before finalising the IVA wherein he settled for 65% of his costs to be paid in advance by the creditor who filed the unsuccessful 262. Instead of demanding all costs from the creditor, he is now taking the remainder of the costs from the lump sum provided. He made no mention of this while the Tomlin was being signed and only just sprung this on us. Is he allowed to do this both legally and ethically? Is there any way that I or a remaining creditor can challenge this as one of the creditors is saying that they are now going to be getting paid far less than they had been told when they agreed to the Tomlin order? Or has my IP found a loophole here? Thanks

Foggy wrote:
It will depend on the actual agreement the IP has with creditors regarding fees and costs ... in most cases these override payments to creditors and are deducted first, before anything is paid out in dividends. This would mean that, going forward, any monies received from this creditor under the Order will need to be distributed to the other creditors, as the costs have already been covered.

MerlinL14

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Post by MerlinL14 » Thu Feb 07, 2019 5:10 pm
I think this is something for the creditor to raise with your IP if they so wish to. I don't think this is going to affect your payments or frequency of payments.
Last Payment made 04/12/14. Completion Certificate 25/7/15. IVA company GT. No Issues
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